5 US Food & Beverage Stocks Displaying Strong Growth - The Smart Investor

Growth stocks can help you to build and grow your investment portfolio to better prepare yourself for retirement.

The good news is that there is a wide assortment of growth stocks to be found in the US.

With food being a necessary staple, investors can sift out interesting food and beverage (F&B) stocks to add to their portfolios.

Here are five attractive US-listed F&B stocks that demonstrate both good growth and bright prospects.

Mondelez (NASDAQ: MDLZ)

Mondelez is one of the world’s largest snack food companies that holds the #1 position in biscuits and #2 position in chocolates.

It owns popular brands such as Oreo, Ritz, Cadbury, Milka, and Toblerone.

Mondelez has displayed steady growth over the last few years with revenue rising from US$28.7 billion in 2021 to US$36 billion in 2023.

Net profit climbed from US$4.3 billion to US$5 billion over the same period.

The business also generated positive free cash flow for all three years averaging US$3.3 billion per year.

The snack food giant paid out a quarterly dividend of US$0.425, up 10.4% from the US$0.385 paid out a year ago.

Management expects organic net revenue growth of between 3% to 5% for 2024 with a free cash flow of US$3.5 billion generated.

The company also plans to spend around US$2 billion on share repurchases.

Yum! Brands (NYSE: YUM)

Yum! Brands franchise and operates a system with more than 58,000 restaurants in over 155 countries.

The company has several famous brands under its belt – KFC, Taco Bell, Pizza Hut, and the Habit Burger Grill.

For 2023, revenue inched up 3% year on year to US$7.1 billion while operating profit increased by 6% year on year to US$2.3 billion.

Net profit jumped 21% year on year because of a lower income tax provision.

Free cash flow for 2023 climbed nearly 15% year on year to US$1.3 billion.

Yum! Brands opened over 4,700 stores last year and also made significant progress in scaling its proprietary digital ecosystem in partnership with its franchisees.

The board also approved an 11% year on year increase in the company’s quarterly dividend to US$0.67 per share.

Wingstop (NASDAQ: WING)

Wingstop is a restaurant chain with more than 2,200 self-operated and franchised locations worldwide serving classic and boneless chicken wings, tenders, and sandwiches.

For 2023, revenue jumped 28.7% year on year to US$460 million.

Operating profit improved by 22.5% year on year to US$112.6 million while net profit climbed 32.5% year on year to US$70.2 million.

The chicken wing specialist’s free cash flow also surged by 54.4% year on year to US$80.8 million from US$52.3 million in the prior year.

A quarterly dividend of US$0.22 was declared, up from the US$0.19 paid out a year ago.

The company opened 255 net new stores in 2023 and increased its system-wide restaurant count by 13% year on year to 2,214 locations.

Domestic same-store sales also increased by 18.3% year on year.

For 2024, Wingstop expects to open around 270 net new global restaurants while enjoying mid-single-digit domestic same-store sales growth.

Restaurant Brands International (NYSE: QSR)

Restaurant Brands International, or RBI, is one of the world’s largest quick-service restaurant chains with more than 30,000 restaurants in over 100 countries.

Some of the iconic brands under its belt include Burger King, Tim Hortons, Popeyes, and Firehouse Subs.

2023 saw RBI report a 7.9% year on year increase in revenue to US$7 billion.

Operating profit rose 8.1% year on year to US$2.1 billion while net profit increased by 18.1% year on year to US$1.2 billion.

The business generated a positive free cash flow of US$1.2 billion for 2023, although this was 13% lower than the US$1.4 billion churned out a year ago.

RBI increased its restaurant count by 3.9% in 2023 to end at 31,070 for the year.

In January 2024, RBI acquired Carrols Restaurant Group (NASDAQ: TAST) for US$9.55 per share for a total enterprise value of US$1 billion.

This transaction will close in the second quarter of this year and Burger King will increase its store count to 176 following the addition of 38 restaurants under its umbrella.

Hershey Co (NYSE: HSY)

Hershey is a global confectionary company with a portfolio of snack brands such as Reese, Hershey’s, Kisses, Kit Kat, and Roco.

For 2023, Hershey’s revenue rose 11% year on year to US$5 billion.

Operating profit climbed 13.3% year on year to US$2.6 billion while net profit increased by 13.2% year on year to US$1.9 billion.

The business also generated a positive free cash flow of US$1.6 billion for 2023.

Hershey’s declared a quarterly dividend of US$1.37 per share for its latest quarter, a sharp jump of 32.2% from the US$1.036 paid out a year ago.

For 2024, management expects net sales growth of between 2% to 3% with flat earnings because of a sharp increase in cocoa prices.

The future of Artificial Intelligence (AI) is upon us, and it has never been more important to understand its progress. We’ve just released an urgent Special Free Report that explores all the opportunities and dangers of AI. Discover the steps you must take to prepare your portfolio for the inevitable AI boom. Click here to download the complimentary report now.

Disclosure: Royston Yang does not own shares in any of the companies mentioned.

Adblock test (Why?)