The S&P/TSX Composite Index was up 10 points in early afternoon trading on July 11. Food prices have been a key driver of inflation in the early part of this decade. Today, I want to focus on three TSX food stocks that are worth your attention in July 2023. Let’s jump in.
Image source: Getty Images
This TSX food stock looks dirt cheap in the first half of July
High Liner Foods (TSX: HLF) is a Nova Scotia-based company that processes and markets frozen seafood products in North America. Its shares have dropped 1.4% month over month as of early afternoon trading on July 11. The stock is still up marginally so far in 2023.
This company released its first-quarter fiscal 2023 earnings on May 16. High Liner put together a strong quarter, as it posted sales growth of 11% to $329 million. Meanwhile, gross profit jumped 10% year over year to $68.4 million. EBITDA stands for earnings before interest, taxes, depreciation, and amortization. High Liner reported adjusted EBITDA of $31.2 million — up 10% compared to the previous year. Adjusted net income climbed 8.6% to $16.4 million.
Shares of this TSX food stock currently possess a very favourable price-to-earnings (P/E) ratio of 6.7. High Liner last paid out a quarterly dividend of $0.13 per share. That represents a 3.7% yield.
Should you ride the wave in Premium Brands?
Premium Brands (TSX: PBH) is a Vancouver-based company that manufactures and distributes food products primarily in Canada and the United States. This TSX food stock has increased 5.3% over the past month. Its shares have surged 26% in the year-to-date period.
In the first quarter of fiscal 2023, Premium Brands delivered revenue growth of 14% to $1.43 billion. Meanwhile, adjusted EBITDA increased 15% year over year to $110 million. These both hit record levels in the first quarter of fiscal 2023. Adjusted earnings per share (EPS) climbed 27% to $0.64. Premium Brands’s sandwich group opened a new 67,000 square food state-of-the-art sandwich plant in Edmonton, Alberta. Moreover, it boasts a promising pipeline that spurred the company to reaffirm its sales and adjusted EBITDA for the full year.
This TSX food stock is trading in attractive value territory compared to its industry peers. Premium Brands last paid out a quarterly dividend of $0.77 per share, which represents a 2.9% yield.
Why I’m still bullish on this TSX food stock for the long haul
Maple Leaf Foods (TSX: MFI) is the third and final TSX food stock I’d look to snatch up, as we approach the midway point in July. This Mississauga-based company produces food products in North America, China, Japan, and around the world. Shares of Maple Leaf Foods have increased 2.6% so far in 2023.
Investors saw this company’s first-quarter fiscal 2023 earnings on May 11. It delivered total sales growth of 4.3% to $1.17 billion. Maple Leaf delivered Meat Protein Sales Group growth of 5% to $1.14 billion. Meanwhile, its Plant Protein Group achieved sales of $37.4 million — up 60% compared to the previous year. Plant-based alternatives have gained major ground in recent years. This group has huge potential over the long term.
Shares of Maple Leaf are also trading in favourable value territory compared to its competitors. It offers a quarterly dividend of $0.21 per share, representing a 3.2% yield.
