Beyond Meat (NASDAQ:GOOGL) started out as a food stock that had at least upside potential. In the meantime, however, the growth story has broken. After all, there has been little growth in the meantime, pricing power is probably in short supply, and even larger partners have ended the collaboration.
Time for some more defensive class when it comes to top food stocks? Instead of relying on Beyond Meat, we can Kellogg (WKN: 853265) and General Mills (WKN: 853862) continue to be prime alternatives. Let’s take a closer look.
Forget Beyond Meat: Kellogg has lots of potential!
By the way: Like Beyond Meat, Kellogg now has a company that focuses on vegan alternative products. But rather than let this sink into the overall group, management eventually decided to split its own overall group into three separate companies. This should enable more focus on such growth opportunities.
But Kellogg has one thing above all: a functioning core business centered around Pringles, pop tarts and Kellogg’s breakfast cereals. It’s the overall quality of this defensive top dividend grocery stock that also gives the overall group pricing power in times of inflation and means it now has moderate growth potential on the earnings and revenue side.
Kellogg has already done what Beyond Meat probably would have done decades ago. With a current price-to-earnings ratio of 17.2 and a dividend yield of over 3%, the fundamental valuation target remains attractive on the cheap. Foolish investors can certainly take a closer, long-term look at this top food stock.
General Mills: Top grocery store!
General Mills is a second-best grocery dividend stock that, unlike Beyond Meat, has an established core business. Vegan alternatives are not so present here so far. Although there is still a first cream cheese and experiments towards this growth market.
For the moment, however, the management has chosen another growth market for itself: animal feed. In this business area, management recently increased sales to over US$600 million per year. quarter. There is also pricing power in this business area, where management can even push through prices that are a quarter higher. In the core business, there was a cross-sectional price mix of around 15%.
Overall, however, General Mills is also a top food stock currently capitalizing on its operational strengths. A portfolio of over 100 different brands is diversified. Breakfast products and other everyday products are in the foreground. With a price-to-earnings ratio of 17.3 and a dividend yield of just under 3%, I also believe that there is solid, long-term oriented return potential here.
Forget Beyond Meat: Top Food Stocks I’d Rather Invest In The article first appeared on The Motley Fool Germany.
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Vincent owns shares in Beyond Meat, General Mills and Kellogg. The Motley Fool owns shares of and recommends stocks by MercadoLibre.
Motley Fool Germany 2022