In this article, we will take a look at the 10 best vegan stocks to buy now.
The vegan industry has seen tremendous growth in recent years, both in revenue and consumer numbers. Aside from the innovation of meatless animal protein alternatives, rising consumer understanding of the health hazards of consuming too much animal products and the ethical and environmental consequences of animal agriculture is fueling the demand for vegan foods worldwide. In a research published in January 2021, the global vegan food market is projected to rise at a compound annual growth rate (CAGR) of 9.2%, from $14.44 billion in 2020 to $15.77 billion in 2021.
The Rise of Plant-Based Food
One of the widely popular vegan companies in the global market is California-based vegan food startup Impossible Foods. Founded in 2011, Impossible Foods creates plant-based meat, dairy, and fish alternatives. Throughout 13 rounds of funding, Impossible Foods has raised a total of $1.4 billion. Their most recent round of funding was a Series G round led by Philippe Laffont’s Coatue Management on August 13, 2020. According to the data tracker PrimeUnicorn Index, the latest round values Impossible Food at a $4 billion valuation. In April 2019, Impossible Foods collaborated with Burger King to introduce the Impossible Whopper.
Plant-based meat alternative producer Beyond Meat, Inc. (NASDAQ: BYND) started selling “Chicken-Free Strips” in 2012, and in 2019, the California-based company went public. Beyond Meat’s IPO was one of the biggest-popping IPOs for a U.S. company. It was valued at $1.5 billion when it went public, three months later, it was worth more than $13 billion. The stock has gained 51% over the past twelve months.
Even the world’s biggest meat producers, including Tyson Foods, Inc. (NYSE: TSN) and Hormel Foods Corporation (NYSE: HRL), actively invest in acquiring and developing new goods and brands that will cater to the growing demand for plant-based products among consumers. Major food companies know that plant-based food popularity will only grow in the coming years as the vegan trend becomes a norm worldwide.
In 2017, dairy giant Danone S.A. (OTC: DANOY) purchased The WhiteWave Foods Co., including the company’s soy brand Alpro for $12.5 billion. Danone S.A.’s portfolio was diversified by the acquisition of WhiteWave, which includes Silk’s nut and soy milk line and Vega’s plant-based protein shakes. Shares of Danone S.A. (OTC: DANOY) jumped 5.8% over the past twelve months.
In 2018, Unilever PLC (NYSE: UL) acquired Dutch plant-based food producer The Vegetarian Butcher. Over the next five to seven years, Unilever intends to make $1.2 billion in revenue from its plant-based meat and dairy alternatives. Shares of UL increased 9% over the past twelve months.
Should You Invest in Vegan Stocks?
Despite the growing availability of vegan food products, the industry is still in its early growth stage, with plenty of space for development. According to UBS, the demand for “plant-based meat” is expected to grow rapidly. In a note last week, the investment bank said that sales of meatless protein products would increase at a 30% compound annual growth rate through 2025, reaching $51 billion. Investing in vegan stocks allows investors to diversify their portfolio while still participating in a rapidly expanding industry.
Just like the food industry, the hedge fund industry is also facing some new trends that are shattering the age-old conventions and causing even the most famous investors struggle to sustain their profits. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26, 2021, our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017, and they lost 13% through November 16. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
With this context in mind, here is our list of the 10 best vegan stocks to buy now.
Best Vegan Stocks to Buy Now
10. Tattooed Chef, Inc. (NASDAQ: TTCF)
Number of Hedge Fund Holders: 11
We start our list of the 10 best vegan stocks to buy now with plant-based processor Tattooed Chef, Inc. (NASDAQ: TTCF). Headquartered in Paramount, California, Tattooed Chef, Inc. offers ready-to-cook vegan and vegetarian bowls such as Plant-based Burrito bowls and Veggie Hemp bowls. Among the plant-based food products that the company sells are smoothie bowls and cauliflower pizza crusts which are available in 4,300 retail outlets in the U.S. and Tattooed Chef’s online shop.
The company has a market cap of $1.3 billion and posted its revenue of $148.5 million in 2020, up 75% from $84.9 million in 2019. According to the company’s forecast, Tattooed Chef’s revenue is projected to increase by 49% year over year to $224 million in 2021. The stock has gained 58% in the last twelve months.
There were 11 hedge funds that reported owning stakes in Tattooed Chef, Inc. (NASDAQ: TTCF) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $106.2 million.
9. B&G Foods, Inc. (NYSE: BGS)
Number of Hedge Fund Holders: 15
B&G Foods, Inc. (NYSE: BGS) ranks 9th on the list of the 10 best vegan stocks to buy now. The shelf-stable and frozen food manufacturer based in New Jersey operates Farmwise LLC, which it acquired in early 2020. Farmwise LLC produces vegan frozen foods, including Veggie Fries, Veggie Rings, and Veggie Tots. The company’s vegan, non-GMO project-certified products are free of gluten, wheat, soy, dairy, tree nuts, and peanuts.
The company has a market cap of $1.9 billion. B&G Foods, Inc.’s revenue came in at $1.97 billion in 2020, up from $1.6 billion in 2019. The company offers a dividend yield of 6.23%. Shares of BGS surged 61% over the past twelve months.
There were 15 hedge funds that reported owning stakes in B&G Foods, Inc. (NYSE: BGS) at the end of the fourth quarter. The total value of these stakes at the end of Q4 is $57.2 million.
In one of their investor letters, Diamond Hill Capital highlighted a few stocks and B&G Foods Inc. (NYSE:BGS) is one of them. Here is what Diamond Hill Capital said:
“Processed and packaged foods manufacturer B&G Foods, Inc. outperformed, most likely due to strong weekly scanner data that showed improving trends in its business as consumers stocked up their pantries and refrigerators during quarantine.”
8. The Hain Celestial Group, Inc. (NASDAQ: HAIN)
Number of Hedge Fund Holders: 23
The Hain Celestial Group, Inc. (HAIN) is one of the leading organic food and natural products manufacturers globally and ranks 8th in our list of the 10 best vegan stocks to buy now. The New York-based organic product company offers vegan and vegetarian meals through its Yves Veggie Cuisine brand and non-dairy beverages and dessert through its Natumi brand.
The company has a market cap of $4.2 billion and net sales of $528.4 million in the second quarter of 2021. Hain Celestial posted its fourth consecutive quarter of sales growth following a 4% increase in net sales compared to 506.8 million in the same quarter in 2019. Piper Sandler analysts upgraded Hain Celestial from Neutral to Overweight in February 2021, with a $50 price target. Shares of HAIN jumped 55.4% over the past twelve months.
There were 23 hedge funds that reported owning stakes in The Hain Celestial Group, Inc. (HAIN) at the end of the fourth quarter, up from 21 funds a quarter earlier. The total value of these stakes at the end of Q4 is $964 million.
7. Beyond Meat, Inc. (NASDAQ: BYND)
Number of Hedge Fund Holders: 27
Beyond Meat, Inc. (NASDAQ: BYND) is the plant-based meat producer behind Carl Jr.’s charbroiled plant-based burger. The California-based alternative meat producer distributes to approximately 28,000 retail stores in the U.S. alone, including Walmart Inc. (NYSE: WMT), Target Corporation (NYSE: TGT), and Costco Wholesale Corporation (NASDAQ: COST). As of December 2020, Beyond Meat, Inc. is offered in approximately 52,000 international retail and foodservice outlets, including Starbucks Corporation (NASDAQ: SBUX). McDonald’s Corporation (NYSE: MCD) launched a three-year partnership with Beyond Meat, Inc., as the fast-food chain adds McPlant to its menu that will be released this year in select sites in Sweden and Denmark. Beyond Meat, Inc. is placed 7th on our list of 10 best vegan stocks to buy now.
The company has a market cap of $8.4 billion. In March 2021, Stephens and Co. initiated an Overweight rating for Beyond Meat, with a price target of $190. The company’s revenue in the fourth quarter of 2020 came in at $101.9 million, an increase of 3.5% from $98.5 million in 2019. Shares of BYND jumped 34.5% over the past twelve months.
There were 27 hedge funds that reported owning stakes in Beyond Meat, Inc. (NASDAQ: BYND) at the end of the fourth quarter, up from 24 funds a quarter earlier. The total value of these stakes at the end of Q4 is $211.7 million.
6. Conagra Brands, Inc. (NYSE: CAG)
Number of Hedge Fund Holders: 28
Chicago-based consumer and commercial food manufacturer Conagra Brands, Inc. (NYSE: CAG) ranks 6th in our list of 10 best vegan stocks to buy now. The company produces shelf staples, frozen food, and restaurant food products such as sauces and meals. Among the company’s vegan and plant-based brands are Gardein, Birds Eye, Log Cabin, and Duncan Hines, acquired from the $10.9 acquisition deal of Pinnacle Foods in October 2018.
The company has a market cap of $18.5 billion. The company’s revenue in 2020 came in at $11 billion, up from $9.5 billion in 2019. The company offers a dividend yield of 2.85%. Citigroup Corp analysts gave Conagra Foods a Neutral rating on April 21. The target price was set at $42. The social media savvy company saw a 160% rise in Twitter followers and massive engagement within only 25 days after engaging in Dogecoin content last quarter. Shares of CAG jumped 13.45% over the past twelve months.
5. Nomad Foods Limited (NYSE: NOMD)
Number of Hedge Fund Holders: 28
European frozen food giant Nomad Foods Limited (NYSE: NOMD) lands the 5th spot in our list of the 10 best vegan stocks to buy now. The food company was founded in 2014 and is headquartered in Feltham, U.K. Nomad Foods offer Green Cuisine vegan food products under the Iglo brand. Green Cuisine’s product line includes burgers, falafel, veggie fingers, and chicken-free nuggets sold in over 25,000 supermarkets in Europe, including Sweden and Finland.
The company has a market cap of $5.2 billion. Shares of NOMD surged 41.5% over the past twelve months. The company’s revenue in 2020 came in at $3 billion, an 8.2% increase compared to $2.7 billion in 2019. In March 2021, Credit Suisse analysts have given Nomad an Outperform ranking. The target price was set at $ 32.
Investment firm FAM FUNDS mentioned that despite the global financial crisis, Nomad Foods Limited remains one of the most profitable frozen food firms in its Q4 2020 investor letter:
“The proceeds (from a sold equity) were primarily invested into a new idea — Nomad Foods (NOMD), a producer of branded frozen food products in Europe. Product categories include fish, vegetables, and meat substitutes. Management’s plan is to continually improve the brands they control while seeking opportunities to buy and upgrade similar companies. In the past, key members of senior management pursued this strategy at other businesses and created significant returns for shareholders. As COVID-19 rolled across Europe, Nomad became one of the few beneficiaries of the pandemic as consumers stopped visiting restaurants and increasingly ate at home.”
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4. Hormel Foods Corporation (NYSE: HRL)
Number of Hedge Fund Holders: 31
Hormel Foods Corporation (NYSE: HRL) ranks 4th on the list of best vegan stocks to buy now. In 2019, Minnesota-based pork giant Hormel Foods Corporation (NYSE: HRL) launched its vegan food products dubbed Happy Little Plants. Soy-based vegan ground beef with 20 grams of protein per serving is its flagship product. Now the vegan food brand has a wide variety of plant-based offerings, including soy-based pepperoni topping and pea-protein-based Italian-style pizza topping. Hormel Foods Corporation is also well-known for its SPAM and SKIPPY brands.
The company has a market cap of $25.5 billion and a revenue of $2.5 million in the first quarter of 2020. Shares of HRL increased 4.5% over the past twelve months.
There were 31 hedge funds that reported owning stakes in Hormel Foods Corporation (NYSE: HRL) at the end of the fourth quarter, up from 30 funds a quarter earlier. The total value of these stakes at the end of Q4 is $523 million.
3. Kellogg Company (NYSE: K)
Number of Hedge Fund Holders: 37
Michigan-based Cereal giant Kellogg Company (NYSE: K) ranks 3rd on the list of the 10 best vegan stocks to buy now. The company is world-famous for its breakfast cereal brands such as Corn Flakes and Froot Loops. But the company is also a rising vegan and vegetarian food producer with brands such as MorningStar Farms, Kashi, Incogmeato, and Gardenburger. The multinational food giant offers veggie breakfast sausage, bacon strips, vegan cheeseburgers, and veggie dogs. And recently, MorningStar Farms unveiled its new plant-based chicken tenders.
The company has a market cap of $21.9 billion. The stock has gained 11.5% in the last three months. Kellogg Company’s revenue in 2020 came in at 13.7 billion. In February 2021, Morgan Stanley analysts have given Kellogg an Equal Weight ranking. The target price was set at $ 60.
There were 37 hedge funds that reported owning stakes in Kellogg Company (NYSE: K) at the end of the fourth quarter, up from 35 funds a quarter earlier. The total value of these stakes at the end of Q4 is $567.3 million.
2. Tyson Foods, Inc. (NYSE: TSN)
Number of Hedge Fund Holders: 38
Tyson Foods, Inc. (NYSE: TSN) ranks 2nd in our list of the 10 best vegan stocks to buy now. In 2019, Arkansas-based Tyson Foods, Inc. unveiled its plant-based protein brand Raised and Rooted. Among its plant-based offerings are spicy chicken-free nuggets and tenders. Last year, Tyson Foods expanded its vegan food product offerings in Europe. Among Tyson Foods’ alternative plant-based brands are Ballpark and Jimmy Dean. Tyson Foods continues to invest in startup companies interested in alternative proteins through Tyson Ventures. Among the VC fund’s latest investments is cell-based meat producers Memphis Meats and Future Meat Technologies and mushroom-based meat producer Mycotechnology.
The company has a market cap of 29 billion and total sales of $10.5 billion in the first quarter of 2021. Shares of TSN climbed 30% over the past twelve months. On April 9, Stephens & Co. maintains an Overweight ranking for TSN, with a price target of $90.
There were 38 hedge funds that reported owning stakes in Tyson Foods, Inc. (NYSE: TSN) at the end of the fourth quarter, up from 36 funds a quarter earlier. The total value of these stakes at the end of Q4 is $867.5 million.
Pixabay/Public Domain
1. Restaurant Brands International Inc. (NYSE: QSR)
Number of Hedge Fund Holders: 39
Topping the 10 best vegan stocks to buy now is Restaurant Brands International Inc. (NYSE: QSR). Although Restaurant Brands doesn’t manufacture vegan food or alternative meat products, the company operates Burger King, the first fast-food chain to offer a plant-based burgers menu. In 2019, Burger King was one of the first fast-food franchises to enter the vegan market, collaborating with Impossible Foods to introduce the Impossible Whopper, a vegan burger. Restaurant Brands International Inc.’s stock has gained 42% in the last year. The company also operates Tim Hortons and Popeyes brands.
The company has a market cap of $19.9 billion. Restaurant Brands International Inc.’s revenue in 2020 came in at $30.7 billion. The income of the Burger King segment in 2020 was $20 billion. Northcoast analysts gave restaurant Brands International a Neutral ranking in April 2021.
Investment management firm Pershing Square Holdings Ltd. highlighted Restaurant Brands International Inc. growth during the pandemic in its Q4 2020 investor letter:
“QSR’s franchised business model is a high-quality, capital-light, growing annuity that generates high-margin brand royalty fees from three leading brands: Burger King, Tim Hortons, and Popeyes. The company nimbly navigated difficult market conditions in 2020 by assisting franchisees while maintaining its long-term growth potential.
As the COVID-19 pandemic began, management undertook a series of steps to secure and strengthen the business. The company quickly bolstered safety procedures and shifted marketing spend to highlight the off-premise options available to customers while supporting its franchisees with fee/cap ex deferrals and liquidity programs. Throughout the year, the company accelerated its digital investments by expanding its delivery footprint, modernizing its drive-thru experience, increasing mobile ordering adoption, and improving its loyalty programs.
While the pandemic negatively impacted the company’s sales, comparable sales have already recovered or are well on their way to recovery. Burger King U.S. returned to growth in January; Tim Hortons improved to a high-single-digit decline in Canada during the fourth quarter, and Popeyes U.S. grew 16% in 2020. To accelerate the recovery at Tim Hortons in Canada, the company has committed additional funds to bolster its advertising and support continued enhancements to its Tim’s Rewards program.
We continue to believe each of Restaurant Brands’ concepts will emerge stronger from this crisis as their business models are competitively advantaged in a socially distant and more budget-conscious consumption environment. The company continues to invest in drive-thru, delivery, and digital. We believe QSR’s long-term unit growth opportunity is still intact, and we expect unit growth to return to its mid-single-digit growth rate this year. As investors begin to see the results of these efforts, and underlying sales trends at each of its brands continue to improve, QSR’s share price should more accurately reflect our view of its business fundamentals.”
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Disclosure: None. 10 Best Vegan Stocks to Buy Now is originally published on Insider Monkey.
