Some of the best investments on the market are those that offer a necessary service that we often take for granted. Incredibly, we often interact with these businesses on a daily basis. A great example of this is food stocks. Here are several tasty food investments to consider for your starved portfolio.
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The next time you order a slice, think of this investment
Everyone enjoys a good slice of pizza. And when it comes to Pizza Pizza Royalty (TSX: PZA), investors will absolutely love it. Pizza Pizza Royalty is the name behind the Pizza Pizza and Pizza 73 brands.
The company operates an impressive network of over 720 stores across the country. Pizza Pizza has consistently grown its network over the years, averaging 2% growth each year.
As an income investment, Pizza Pizza really impresses. The company offers an appetizing monthly dividend that works out to an impressive yield of 6.02%. Additionally, Pizza Pizza has provided investors with handsome upticks to that dividend over the years, including three increases over the past year.
That factor alone makes Pizza Pizza a food stock that is hard to ignore, but there’s still more.
Prospective investors should note that during market slowdowns, consumers will gravitate towards fast-food outlets as a more frugal and quicker meal solution.
That’s reflected in Pizza Pizza’s results. In the most recent quarter, the company saw same-store sales grow by a whopping 16% over the prior period. This is reflective of the reopening of businesses following the pandemic, which only further enhances the appeal of the stock.
Seafood is just good for you and can bolster your portfolio
Investors looking for another food stock that is hard to ignore should consider High Liner Foods (TSX: HLF). High Liner is one of the largest frozen seafood suppliers in North America.
As an investment option, there are several intriguing points that most investors may not even realize. Apart from its namesake brand, High Liner also sells products under several other brand names. This permits the company to offer a variety of different products in different markets, catering to different tastes.
In all, the company sells over 30 different types of seafood. Adding to that, High Liner’s products are not only sold in the frozen food aisle of your grocery store. High Liner also markets its products to big-box stores and provides a supply of seafood to restaurants.
In other words, High Liner has an advantageous position in the market and casts a wide, defensive net around the north American seafood market. And that envious position is evident in the company’s results.
In the most recent quarter, High Liner saw sales surge 26.6% to $271.2 million over the same period last year. The company earned $10 million, or $0.28 per diluted share, representing an 8.7% increase.
Turning to income, High Liner offers a quarterly dividend that pays a respectable yield of 3.64%.
This stock owns a dizzying array of brands
A third food stock option that is too hard to ignore right now is Premium Brands Holdings (TSX: PBH). For those that are unaware of Premium Brands, the company has both manufacturing and distribution arms.
Premium Brands boasts a dizzying area of 40 food brands that are distributed to markets in Canada and the United States. That list primarily includes meats, pastas, seafood, and specialty products. This makes the company a well-diversified pick for hungry investors.
In the most recent quarter, Premium Brands reported record revenue of $1.62 billion. This reflects an impressive 21% increase over the same period last year. Much of that improvement was fueled by the resumption of normal business following the end of pandemic-related closures.
Turning to income, Premium Brands offers investors a 3.03% yield. The company has also provided investors with a series of healthy annual bumps to its dividend going back nearly a decade.
Food stocks that are too hard to ignore
No investment is without risk, and that includes the three food stocks mentioned above. Fortunately, all three of the options noted above offer investors some defensive appeal and growth opportunities in their respective fields.
In my opinion, one or all of the above would do well as a small part of a larger, well-diversified portfolio.
