In this article, we discuss the 11 best coffee stocks to buy now.
Coffee is one of the favorite beverages in the world and a major source of caffeine for many, from students to retirees. According to a report by Business Insider, coffee is the second most sought-after commodity in the entire world, with an industry worth over $100 billion across the globe. In terms of exporting alone, the industry is valued at $20 billion and continues to be on the rise — on average, 500 billion cups of coffee are consumed yearly. In the last 50 years, the compounded average yearly growth rate of the coffee industry was 1.9%. In the last two decades, it rose to 2.2%. This increment means that the market size increased by 190%. Latest estimates suggest that 3 billion cups of coffee are consumed each day. Globally, it generates an annual income of $200 billion. In 2019, the world coffee demand was estimated between 164.8 million bags (ICO) and 166.5 million bags. In May 2022, the stock market’s downturn led to a drop in real wages in the industry and started to affect a range of goods and services. However, the price of coffee remains relatively high.
Despite the downturn, consumption has continued to grow. According to a report by the National Coffee Association, in March 2022, coffee consumption among Americans was at a two-decade high. It shows the largest growth of about 14% increase since January 2021. Soft commodities consultant Judith Ganes, president of J Ganes Consulting, recently said a stock market downturn would not hurt overall coffee consumption. The expert believes that coffee will remain an affordable beverage and people don’t want to give it up.
In an interview in October 2022, Vanusia Nogueira, an executive director at the International Coffee Organization, said that consumers will choose drinking coffee at home over cafes and restaurants due to rising inflation and risks of recession in coming months. Similarly, other market experts predict that as inflation rises and the prices of goods increase, people may socialize more over coffee as they may skip having lunch or dinner out with friends, and grab a coffee instead.
Coffee stores around the world have been rebounding from pandemic lows in recent months. According to a report by World Coffee Portal, the number of coffee stores in the United States has increased beyond levels seen in 2020. The report underlines that there are 38,411 branded coffee shops in the US, up 2.8% compared to pre-pandemic levels. Some of the top brands in the industry include Starbucks Corporation (NASDAQ:SBUX), Monster Beverage Corporation (NASDAQ:MNST), and McDonald’s Corporation (NYSE:MCD).
Image by Free-Photos from Pixabay
Our Methodology
The companies that operate in the coffee and beverages sector were selected for the list. Special importance was assigned to outlining the basic business fundamentals and analyst ratings for each firm to provide readers with some context so they can make more informed investment choices. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.
Best Coffee Stocks to Buy Now
11. Coffee Holding Co., Inc. (NASDAQ:JVA)
Number of Hedge Fund Holders: 2
Coffee Holding Co., Inc. (NASDAQ:JVA) manufactures, roasts, packages, markets, and distributes roasted and blended coffees in the United States, Australia, Canada, England, and China. In mid-September, the company posted earnings for the third quarter of 2022, reporting earnings per share of $0.02 and a revenue of $17 million, up more than 25% compared to the revenue over the same period last year.
At the end of the third quarter of 2022, 2 hedge funds in the database of Insider Monkey held stakes worth $1.3 million in Coffee Holding Co., Inc. (NASDAQ:JVA), compared to 2 in the preceding quarter worth $1.2 million.
Just like Starbucks Corporation (NASDAQ:SBUX), Monster Beverage Corporation (NASDAQ:MNST), and McDonald’s Corporation (NYSE:MCD), Coffee Holding Co., Inc. (NASDAQ:JVA) is one of the best coffee stocks to buy now according to elite investors.
10. Farmer Bros. Co. (NASDAQ:FARM)
Number of Hedge Fund Holders: 4
Farmer Bros. Co. (NASDAQ:FARM) engages in the roasting, wholesale, equipment servicing, and distribution of coffee, tea, and other allied products in the United States. On November 3, Enterprise Products Partners posted earnings for the first quarter of 2022, reporting losses per share of $0.39, missing market estimates by $0.06. The revenue over the period was $121.4 million, up 12.0% compared to the revenue over the same period last year and beating market estimates by $2.6 million.
At the end of the third quarter of 2022, 4 hedge funds in the database of Insider Monkey held stakes worth $8 million in Farmer Bros. Co. (NASDAQ:FARM), compared to 6 in the preceding quarter worth $8.3 million.
9. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Number of Hedge Fund Holders: 9
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is a franchise bottler that produces, markets, sells and distributes Coca-Cola trademark beverages. It also sells revitalizing coffees and teas. On November 28, Volvo-owned Renault Trucks announced that Coca-Cola has successfully implemented the introduction of electric trucks for delivery. Coca-Cola Europacific Partners will be using 30 electric trucks for last-mile deliveries to local Belgium customers. Coca-Cola Europacific looks to establish one of the largest EV delivery fleets in Belgium in the coming months.
On October 26, Barclays analyst Benjamin Theurer maintained an Overweight rating on Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) stock and raised the price target to $72 from $65, noting that the company reported a strong performance despite headwinds.
At the end of the third quarter of 2022, 9 hedge funds in the database of Insider Monkey held stakes worth $462 million in Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), compared to 6 in the previous quarter worth $461 million.
8. SunOpta Inc. (NASDAQ:STKL)
Number of Hedge Fund Holders: 20
SunOpta Inc. (NASDAQ:STKL) manufactures and sells plant-based and fruit-based food and beverage products to retail customers, food service distributors, branded food companies, and food manufacturers worldwide. The firm owns the top brands for non-dairy coffee creamers. On October 13, SunOpta said that it will sell its sunflower business to Pacific Avenue Capital Partners for $16 million. After the acquisition, the business will become Sunrich products. It will continue to be led by the same general manager and employee team.
At the end of the third quarter of 2022, 20 hedge funds in the database of Insider Monkey held stakes worth $332.2 million in SunOpta Inc. (NASDAQ:STKL), compared to 21 in the previous quarter worth $338.6 million.
In its Q3 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and SunOpta Inc. (NASDAQ:STKL) was one of them. Here is what the fund said:
“On an individual holdings basis, top contributors to return included WESCO International, Mr Cooper Group and SunOpta Inc. (NASDAQ:STKL). SunOpta is a leading global company focused on natural food, ingredient sourcing, organic food and specialty foods. Revenue growth has been driven by strong demand for its plant-based products, and the company’s pricing power has mitigated the impact of inflation.”
7. Keurig Dr Pepper Inc. (NASDAQ:KDP)
Number of Hedge Fund Holders: 23
Keurig Dr Pepper Inc. (NASDAQ:KDP) operates as a beverage company in the United States and internationally. It markets specialty coffee, hot and iced teas, hot cocoa and other beverages. On November 9, Keurig Dr Pepper Inc. announced a minority stake in the Massachusetts-based Athletic Brewing Company. The $50 million investment in the non-alcoholic craft beer company follows a prior investment in the non-alcoholic ready-to-drink cocktail brand Atypique.
On October 31, Barclays analyst Lauren Lieberman maintained an Overweight rating on Keurig Dr Pepper Inc. (NASDAQ:KDP) stock and raised the price target to $45 from $41, noting that despite the ongoing debate spurred by the company’s coffee business, Keurig Dr Pepper is a relatively attractive domestic defensive play.
At the end of the third quarter of 2022, 23 hedge funds in the database of Insider Monkey held stakes worth $539.1 million in Keurig Dr Pepper Inc. (NASDAQ:KDP), compared to 29 in the previous quarter worth $630 million.
6. The J. M. Smucker Company (NYSE:SJM)
Number of Hedge Fund Holders: 38
The J.M. Smucker Company (NYSE:SJM) manufactures and markets branded food and beverage products worldwide. It owns top coffee brands like Folgers, Dunkin’ Donuts, and Café Bustelo. On November 21, the firm posted earnings for the second quarter of 2022, reporting earnings per share of $2.40, beating market estimates by $0.21. The revenue over the period was $2.21 billion, up 7.8% compared to the revenue over the same period last year and beating market estimates by $30 million.
On November 22, Deutsche Bank analyst Steve Powers maintained a Hold rating on The J. M. Smucker Company (NYSE: SJM) stock and raised the price target to $148 from $145, noting that the company’s underlying sales momentum is incrementally impressive.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in The J.M. Smucker Company (NYSE:SJM) with 1.9 million shares worth more than $264.9 million.
At the end of the third quarter of 2022, 38 hedge funds in the database of Insider Monkey held stakes worth $937 million in The J. M. Smucker Company (NYSE: SJM), compared to 35 in the previous quarter worth $711 million.
In addition to Starbucks Corporation (NASDAQ:SBUX), Monster Beverage Corporation (NASDAQ:MNST), and McDonald’s Corporation (NYSE:MCD), The J.M. Smucker Company (NYSE:SJM) is one of the best coffee stocks to buy now according to elite investors.
5. Restaurant Brands International Inc. (NYSE:QSR)
Number of Hedge Fund Holders: 27
Restaurant Brands International Inc. (NYSE:QSR) operates as a quick-service restaurant company in Canada and internationally. These restaurants sell premium coffee, and hot and cold specialty drinks.
On November 22, investment advisory RBC Capital maintained an Outperform rating on Restaurant Brands International Inc. (NYSE: QSR) stock and raised the price target to $80 from $70. Analyst Christopher Carril issued the ratings update.
Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pershing Square is a leading shareholder in Restaurant Brands International Inc. (NYSE:QSR) with 24.2 million shares worth more than $1.3 billion.
In its Q2 2022 investor letter, Pershing Square Holdings, an asset management firm, highlighted a few stocks and Restaurant Brands International Inc. (NYSE:QSR) was one of them. Here is what the fund said:
“Restaurant Brands International Inc. (NYSE:QSR)’s franchised business model is a high-quality, capital-light, growing annuity that generates high-margin brand royalty fees from its four leading brands: Burger King, Tim Hortons, Popeyes, and Firehouse Subs.
QSR is investing in each of its brands to position them for sustainable, long-term growth. As Canada reopened, Tim Hortons’ same-store sales returned to growth during the quarter compared to pre-COVID levels, driven by growth across all dayparts, formats, regions and product categories aside from hot beverages. The company is focused on executing the next phase of its “Back to Basics” plan by extending its beverage platform, capturing a greater share of afternoon foods and continuing its brand modernization. Longer-term, management believes it can sustainably grow same-store sales at a low-single-digit rate.
At Burger King in the U.S., the company also reported improved results and narrowed the gap with its peers. Recently-appointed Burger King U.S. President Tom Curtis and his team have begun to lay the foundation for a return to sustainable growth. We believe the company has a meaningful opportunity to reinvigorate growth and modernize its store base through a reinvestment plan. The company will be unveiling its “reclaim the flame” plan to franchisees next month…read more
4. Yum China Holdings, Inc. (NYSE:YUMC)
Number of Hedge Fund Holders: 27
Yum China Holdings, Inc. (NYSE:YUMC) owns, operates, and franchises restaurants in China. The firm owns Lavazza Group, one of the most famous Italian coffee brands in the world. On November 1, Yum China Holdings declared a quarterly dividend of $0.12 per share, in line with the previous. The forward yield was 1.16%. On November 1, Yum China posted earnings for the third quarter of 2022, reporting earnings per share of $0.49. The revenue over the period was $2.21 billion, up 7.8% compared to the revenue over the same period last year.
Among the hedge funds being tracked by Insider Monkey, London-based investment firm GuardCap Asset Management is a leading shareholder in Yum China Holdings, Inc. (NYSE:YUMC) with 8.98 million shares worth more than $425.2 million.
In its Q2 2022 investor letter, Cooper Investors, an asset management firm, highlighted a few stocks and Yum China Holdings, Inc. (NYSE:YUMC) was one of them. Here is what the fund said:
“Yum China Holdings, Inc. (NYSE:YUMC) – With the world emerging after two years of COVID, the extreme Shanghai lockdowns caught the company and frankly us a little by surprise. While the proposition for domestic KFC roll-out remains intact Yum China has not behaved like a Stalwart this year.”
3. Monster Beverage Corporation (NASDAQ:MNST)
Number of Hedge Fund Holders: 39
Monster Beverage Corporation (NASDAQ:MNST) engages in the development, marketing, sale, and distribution of energy drink beverages and concentrates in the United States and internationally. It sells brewed premium coffees, creamy milk, and the Monster energy blend for a strong iced coffee energy drink. On November 15, English football club Newcastle United announced the signing of a new partnership with Monster Energy to become the club’s official energy drink partner in an undisclosed multi-year deal.
On November 29, Argus analyst John Staszak maintained a Buy rating on Monster Beverage Corporation (NASDAQ:MNST) stock and raised the price target to $118 from $113, noting that shares remain attractive despite investor concerns about rising input costs and higher freight rates.
At the end of the third quarter of 2022, 39 hedge funds in the database of Insider Monkey held stakes worth $1.96 billion in Monster Beverage Corporation (NASDAQ:MNST), compared to 46 in the preceding quarter worth $2.4 billion.
In its Q2 2022 investor letter, Carillon Tower Advisers, an asset management firm, highlighted a few stocks and Monster Beverage Corporation (NASDAQ:MNST) was one of them. Here is what the fund said:
“Monster Beverage Corporation (NASDAQ:MNST) develops and sells energy drinks and concentrates. The company’s shares outperformed, driven by an impressive earnings report highlighted by better-than-expected organic growth. Management also gave guidance that indicated a potential bottom in gross margins, as well as upcoming price increases that helped give investors confidence in its growth outlook.”
2. McDonald’s Corporation (NYSE:MCD)
Number of Hedge Fund Holders: 50
McDonald’s Corporation (NYSE:MCD) operates and franchises McDonald’s restaurants around the world. These restaurants sell coffee as well. On November 28, the successor to McDonald’s in Russia was set to add nine more restaurants to its portfolio next month, as the former franchisee agreed to join the new brand.
On October 28, RBC Capital analyst Christopher Carril maintained an Outperform rating on McDonald’s Corporation (NYSE: MCD) stock and raised the price target to $295 from $275, noting that the company’s third-quarter earnings beat highlighted its ability to play both offense and defense amid macro uncertainty.
At the end of the second quarter of 2022, 50 hedge funds in the database of Insider Monkey held stakes worth $2.3 billion in McDonald’s Corporation (NYSE:MCD), compared to 58 in the previous quarter worth $2.7 billion.
1. Starbucks Corporation (NASDAQ:SBUX)
Number of Hedge Fund Holders: 55
Starbucks Corporation (NASDAQ:SBUX) operates as a roaster, marketer, and retailer of specialty coffee worldwide. On November 28, Target declared that it had expanded Starbucks’ curbside pickup service. Target will deliver Starbucks food and beverages in its Drive-Up curbside service at selected locations.
On November 4, Evercore ISI analyst David Palmer maintained an Outperform rating on Starbucks (NASDAQ: SBUX) stock and raised the price target to $97 from $95, noting that the advisory was less worried about financial year 2023 sales and earnings following the company’s fourth quarter reports.
Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm Citadel Investment Group is a leading shareholder in Starbucks Corporation (NASDAQ:SBUX) with 5.8 million shares worth more than $444.7 million.
In its Q2 2022 investor letter, Matrix Asset Advisors, an asset management firm, highlighted a few stocks and Starbucks Corporation (NASDAQ:SBUX) was one of them. Here is what the fund said:
“Starbucks Corporation (NASDAQ:SBUX) is a premier global coffee brand supported by over 32,600 stores across the world. The firm has a long history of beverage innovation and strong employee/barista relations with the firm paying above-market wages and benefits. Starbucks has a strong balance sheet and finances. The company generates steady and consistent cash flow, selling millions of cups of premium coffee every day. The company’s share price declined in part due to its large business in China which was largely shut down due to Covid restrictions and because of rising commodity and labor costs. We think the shares are attractively priced for a company that should grow 10% plus per year with a dividend yield of 2.6% at our average cost.”
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Disclosure. None. 11 Best Coffee Stocks to Buy Now is originally published on Insider Monkey.
