Whole Foods Market, Inc. (WFM), The Hain Celestial Group, Inc. (HAIN): Feasting on the Organic Movement

Another Supplier

United Natural Foods (NASDAQ:UNFI) engages in the distribution and retail of natural, organic, and specialty foods, as well as non-food products in the US and Canada.  The company distributes approximately 65,000 products and also operates 13 retail stores in the US and one in Canada.

United Natural Foods, Inc. (NASDAQ:UNFI) is the primary distributor to Whole Foods Market, Inc. (NASDAQ:WFM) and has held that role for more than 14 years.  The company amended it distribution agreement in 2010 to serve as the primary distributor for another seven years.  The company has also seen extensive growth with net sales growing by 15.6% between fiscal year 2012 and fiscal year 2011.

The company currently trades at a P/E of 27.10 and does not pay a dividend.

Foolish Conclusion

All three of these stocks represent interesting plays on the growing organic food markets.  While I think all three are potentially good investments, I favor United Natural Foods, Inc. (NASDAQ:UNFI).  The company has a much lower P/E than Whole Foods Market, Inc. (NASDAQ:WFM), but as the primary distributor, the company will grow and benefit from Whole Foods’ expansion.  The Hain Celestial Group, Inc. (NASDAQ:HAIN) would seem like a good investment, but the short interest in the stock is worrisome.

The article Feasting on the Organic Movement originally appeared on Fool.com and is written by John Timmes.

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