Over the past few days, a number of states have been stalling plans to reopen the economy as coronavirus infection cases are surging by the day. Moreover, with no effective vaccine in place, the world has plunged into a great deal of uncertainty. These factors are compelling people to dine at home in order to maintain social distancing.
Working from home and having home-cooked meals have now become the “new normal” amid the coronavirus outbreak. As a precautionary measure, people are avoiding dining out or ordering in. Apart from being a safer option, people are finding home-cooked meals way less expensive than outside food. Moreover, staying indoors has helped individuals discover new sides to them, prompting the development of varied interests. Naturally, people are indulging in activities like cooking, home styling and other household chores along with work and online entertainment.
In fact, people who have rarely cooked at home prior to the pandemic are now plating extravagant mealsto fulfill the “restaurant-style” food cravings. At-home celebrations have also increased and families are trying out new food recipes to uplift their mood. At times of course, consumers crave to binge on some quick meal options like snacks or ready-to-eat meals.
Per a recent survey conducted by HUNTER, 54% of the Americans have been cooking more when compared with the pre pandemic levels. The study goes on to suggest that 51% of Americans who are cooking more now will continue to do so.
We note that a number of companies in the food space, especially those dealing in packaged foods, have been benefitting from increased at-home cooking and consumption. Also, with the coronavirus cases constantly rising and social distancing still being a practice, such trends are likely to stay. Certainly, a number of companies in the food industry stand to gain from this.
We have shortlisted five rock-solid stocks that belong to Food – Miscellaneous industry on the basis of a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
5 Prominent Picks
Medifast, Inc. MED is a leading manufacturer and distributor of clinically-proven healthy living products and programs. This Zacks Rank #1 company whose shares have more than doubled in the past three months offers products like puffs, oatmeal, bars, bites, pretzels and cereal crunch products, among others. The company has a trailing four-quarter earnings surprise of 14.8%, on average.
B&G Foods, Inc. BGS manufactures, sells and distributes a portfolio of shelf-stable and frozen food, and household products. This Zacks Rank #2 stock has been witnessing an uptick in demand since the second half of March 2020, thanks to coronavirus-led stockpiling and higher at-home consumption. B&G Foods has a trailing four-quarter earnings surprise of 5.4%, on average. Moreover, the Zacks Consensus Estimate for current-year earnings has been revised 2.3% upward over the past 30 days. The stock has surged 40% in the past three months.
The Kraft Heinz Company KHC which has returned 18.8% in the past three monthsis witnessing increased demand from retail customers owing to greater at-home consumption amid the coronavirus, especially in developed markets. This Zacks Rank #2 company offers food and beverage products like condiments and sauces, cheese as well as dairy, meals, meats, refreshment beverages, coffee, and other grocery products. Moreover, the Zacks Consensus Estimate for its current-year earnings has moved up by a penny in the past seven days. The company has an expected long-term earnings growth rate of 6%.
Kellogg Company K is another promising pick. Carrying a Zacks Rank #2, the company offers ready-to-eat cereals as well as convenience food like cookies, crackers, toaster pastries, cereal bars, fruit-flavored snacks and frozen waffles. The company has been of late benefiting from the coronavirus-led stockpiling. The company has an expected long-term growth rate of 3.8%. Also, shares of Kellogg have gained 5.9% in the past three months.
Nomad Foods Limited NOMD, a leading frozen food provider,also deserves a mention. The company, whose shares have gained 5.6% in the past three months, carries a Zacks Rank #2. The company has been seeing great demand for its range of frozen food since early March. Nomad Foods has a trailing four-quarter earnings surprise of 10.7%, on average.
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