Alert! This TSX Stock Can Be Canada’s Beyond Meat (NASDAQ:BYND)

Maple Leaf Foods Inc. (TSX:MFI) stock surged after its second-quarter 2019 results showed that its plant-based proteins products have performed well.

| More on:
Profit dial turned up to maximum

Image source: Getty Images

Beyond Meat (NASDAQ:BYND) has been a massive success story since its initial public offering (IPO) in May. In late July, the stock had extended its gains to over 700%. It is not just the stock that is inspiring confidence. Beyond Meat’s products are hitting menus across North America, and they are also filling shelves at supermarkets.

After its IPO, I’d discussed its potential and the popularity of plant-based meat alternatives. Consumers have grown more health-conscious over the past decade, and this is drawing many away from meat products. There has been a significant increase in U.S. and Canadian citizens identifying as vegans and vegetarians in recent years. Beyond Meat boasts that it offers the taste of traditional meat products with the health benefits of a plant-based diet.

The California-based company is drawing eyeballs, but it is not the only player in this high-growth space. In fact, right here at home, a Canadian staple started to pivot to plant-based proteins in 2017. In February 2017, Maple Leaf Foods (TSX:MFI) announced that it would acquire Lightlife Foods, a leading manufacturer of plant-based protein foods. This strategic push into this growing market was one of the reasons I’d remained bullish on Maple Leaf even in a turbulent 2018.

Shares of Maple Leaf shot up 12% on August 1. The company released its second-quarter 2019 results on the same day. Maple Leaf achieved double-digit growth in its plant-based protein sales, which fuelled 12.5% sales growth in the quarter. However, the company still recorded a net loss of $6.3 million, or $0.05 per share, due to fair-value changes on balance sheet items that totaled $60.7 million.

Maple Leaf announced that it would seek an aggressive growth strategy in the plant-based proteins space, which should come as no surprise in this current environment. The Lightlife Burger is directly competing with the Beyond Burger at Canadian grocery stores and restaurants. Investors should take interest in how Maple Leaf goes about marketing itself against Beyond Meat going forward, as it appears to have a distinct disadvantage in that arena right now.

Mordor Intelligence, a global market research and consulting firm, recently forecast that the global plant-based protein market would grow to $9.5 billion by 2024. This would represent a CAGR of 7% over the projection period (2019-2024). North America was the largest segment studied and continues to be heavily weighted in terms of market share relative to other continents in this growing global market.

There is a lot of excitement around plant-based proteins right now, and Maple Leaf wisely broke into the market in 2017. However, this space will only grow more competitive with time. I’d like to see more active marketing for its Lightlife products as we look ahead, or the company risks being largely overshadowed by its U.S. counterpart. Still, Maple Leaf has produced impressive sales due to its push into this space. That is reason enough to consider buying today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned.

More on Investing

grow dividends
Investing

Don’t Look Now, But These 3 TSX Stocks Look Poised for a Nice Rally

Three TSX stocks are rising amid the elevated market volatility due to rate-cut uncertainties and geopolitical risks.

Read more »

Close up shot of senior couple holding hand. Loving couple sitting together and holding hands. Focus on hands.
Dividend Stocks

Here’s the Average CPP Benefit at Age 70 in 2024

Canadian retirees can supplement their CPP payout by investing in blue-chip dividend stocks such as Enbridge.

Read more »

woman data analyze
Tech Stocks

1 Stock I’d Drop From the “Magnificent 7” and 1 I’d Add

Tesla (NASDAQ:TSLA) stock is part of the Magnificent Seven, but Shopify (TSX:SHOP) is growing faster.

Read more »

Gas pipelines
Dividend Stocks

Is Enbridge the Best Dividend Stock for You?

Enbridge now offer a dividend yield of 8%.

Read more »

tsx today
Stock Market

TSX Today: What to Watch for in Stocks on Thursday, April 18

Rising metal prices could lift the main TSX index at the open today as focus remains on the ongoing geopolitical…

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Coronavirus

2 Pandemic Stocks That Are Still Rising, and 1 Offering a Major Deal

There are some pandemic stocks that crashed and burned, while others have made a massive comeback. And this one stock…

Read more »

Supermarket aisle with empty green shopping cart
Investing

CRA: Will You Receive a Grocery Rebate in 2024?

The grocery rebate was introduced as a one-time tax credit for low-income Canadian households to offset higher prices.

Read more »

question marks written reminders tickets
Investing

BCE Stock’s Dividend Yield Hits 9%—Is it Finally Time to Buy?

BCE (TSX:BCE) stock has a super-swollen dividend yield right now as it passes 9%.

Read more »