In this article, we discuss the 5 best organic food and farming stocks to buy. To read a detailed analysis of the organic foods industry, go directly to the 10 Best Organic Food and Farming Stocks To Buy.
5. Performance Food Group Company (NYSE:PFGC)
Number of Hedge Fund Holders: 33
Performance Food Group Company (NYSE:PFGC) is an American food distribution company. It sells organic foods, frozen foods, groceries, candies, snacks, beverages, tobacco products, meat products, health products, and beauty care. It is headquartered in Virginia and has around 35,000 employees.
Performance Food Group Company (NYSE:PFGC) reported FQ1 results on November 9 and produced solid results. The adjusted diluted EPS of the company was $1.08, representing a 151.2% increase from the prior year period. The revenue increased by 41.72% to $14.72 billion, outperforming the estimates by over $279 million.
On November 14, after robust FQ1 2023 results, Deutsche Bank analyst Brian Mullan reiterated a Buy rating on Performance Food Group Company (NYSE:PFGC)’s shares. Mullen raised his price target on the firm to $72 from $67.
Here is what ClearBridge Investments had to say about Performance Food Group Company (NYSE:PFGC) in its Q4 2021 investor letter:
“Performance Food Group is another example of a quality franchise bought during a depressing period for the food service industry that has flexed its balance sheet to make acquisitions of weaker players and continues to consolidate its leading market share.”
4. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Fund Holders: 37
Archer-Daniels-Midland Company (NYSE:ADM) is an Illinois-based food processing, commodities trading, and agriculture company. In the last three years, the company’s stock price has gained substantially. However, the company still remains fairly valued at a PE ratio of 12.65.
In the last 3 months, 5 analysts have covered Archer-Daniels-Midland Company (NYSE:ADM) with an average price target of $98.20 and a Moderate Buy rating. On October 26, Baird analyst Ben Kallo reaffirmed an Outperform rating on the company shares and raised his price target to $98 from $94.
Archer-Daniels-Midland Company (NYSE:ADM) has increased its dividend for the last 49 years and as of December 6, the company has a dividend yield of 1.75%. Furthermore, earlier this year, the company authorized a share repurchase program of $8 billion in addition to the $4 billion repurchase program authorized in May 2021. In the September quarter, Archer-Daniels-Midland Company (NYSE:ADM) repurchased stock worth $1 billion.
Diamond Hill Capital mentioned Archer-Daniels-Midland Company (NYSE:ADM) in its Q1 2022 investor letter. Here is what the firm has to say:
“ADM is a leading agricultural processor that also operates a global nutrition business focused on the development of ingredients and flavors for food and beverages, supplements and more. The company’s recent operating results have benefited (unfortunately) from the war in Ukraine as grain prices and agricultural markets globally experienced strong price increases. ADM is positioned well to benefit from the volatility due to its stable North American agricultural base.”
3. General Mills, Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 40
General Mills, Inc. (NYSE:GIS) is an American consumer foods company that operates through retail stores. The company is also one of the largest flour millers in the US. Its organic food segment includes frozen and shelf-stable vegetables. General Mills, Inc. (NYSE:GIS) is headquartered in Minnesota.
For the past 120 years, General Mills, Inc. (NYSE:GIS) has been paying quarterly dividends. The latest one was declared on November 14 at $0.54 per share, payable by February 1 and the company goes ex-dividend on January 9.
General Mills, Inc. (NYSE:GIS)’s coverage was initiated by Exane BNP Paribas analyst Max Gumport with an Overweight rating on November 15. The analyst set his price target at $90 and noted that the U.S. packaged food goods have historically outperformed the S&P downturns during a potential looming recession. Gumport specifically mentioned General Mills, Inc. (NYSE:GIS)’s Buffalo pet food brand and said that it has a significant runway.
Here is what Chartwell Investment Partners has to say about General Mills, Inc. (NYSE:GIS) in its Q2 2022 investor letter:
“In the Dividend Equity accounts, the three best performers in Q2 includes General Mills (NYSE:GIS, 3.2%), up 12.2%. General Mills benefitted from the combination of being in a very defensive industry as well as demonstrating solid business momentum; margins have been particularly impressive, following price increases.”
2. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 40
The Kraft Heinz Company (NASDAQ:KHC) is an American food company that offers its products worldwide. The company offers organic food products in the United States, Canada, and Europe.
Berkshire Hathaway owns over 26% shares of The Kraft Heinz Company (NASDAQ:KHC) with 325,634,818 shares, worth $10.86 billion.
On December 6, Deutsche Bank analyst Steve Powers reaffirmed a Buy rating on The Kraft Heinz Company (NASDAQ:KHC) and raised his price target to $49 from $47.
1. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 49
The Kroger Co. (NYSE:KR) is an American company that operates supermarkets and department stores in the United States. The company operates 33 food processing facilities and has a separate organic foods segment Simple Truth, making it one of the best organic foods and farming stocks. The segment reached a $3 billion revenue milestone in 2020.
Kroger Co. (NYSE:KR) has increased its dividends for 15 consecutive years and has a 2.24% yield as of December 6. The company paid its latest dividend on December 1, to the shareholders of record on November 15.
On December 6, Bernstein analyst Dean Rosenblum initiated coverage on The Kroger Co. (NYSE:KR) with an Outperform rating and a $58 price target.
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