Consumer stocks are one of the hardest hit from the novel coronavirus. Of course, the coronavirus pandemic has wreaked havoc on many businesses. As bad as these impacts could be, there are always a few that would outperform its industry peers. That doesn’t mean there’s no opportunity in the consumer sector. Sometimes, they are just harder to find.
As many Americans still choose to stay home to avoid contracting the virus. That means groceries are a big deal, as well as consumer staples. With consumer behavior suddenly altered in such a big way, many consumer staples are proving to be valuable especially during the pandemic. Many consumer staples companies are making a recovery. In-store sales are still as usual if not higher. People will still need to stock up on food and drinks when they go to the supermarket. This means that some consumer companies can still continue to do well despite the pandemic.
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The demand for consumer staples is relatively constant. But during the pandemic, certain brands or types of food may be in higher demand than usual. People would rather prepare their food at home. Of course, some people would still prefer to dine in a restaurant, but staying at home and preparing our own food is increasingly popular as the number of coronavirus cases continues to spike.
Meat companies are one great example. Americans are meat lovers. But that doesn’t make these companies great investments. For instance, shares of meat companies like Tyson Foods (TSN Stock Report), JBS S.A. (JBSAY Stock Report) and Pilgrim’s Pride (PPC Stock Report) have all tumbled. They don’t seem to be climbing back to its pre-crisis levels. With all that being said, let’s take a look at consumer stocks that have been relatively resilient compared to their industry peers.Top Consumer Stocks To Buy [Or Sell] Before Friday: Beyond Meat Inc.
As the meat supply chain continues to face disruption, plant-based meat providers, Beyond Meat (BYND Stock Report) sees huge growth opportunities. Beyond Meat may be a provider of plant-based meat proxies for restaurants, but the major components of its revenue are generated through partnerships with restaurants and retailers like Starbucks (SBUX Stock Report) and Walmart (WMT Stock Report), just to name a few which quickly increased its exposure to mainstream consumers.
Beyond Meat is growing at a rate that leaves traditional meat companies in the dust. Net revenue jumped from 170% in 2018 to a staggering 239% last year.
Of course, Beyond Meat’s top-line growth decreased to 141% in the first quarter of this year, and 69% in the second quarter. But that slowdown can be attributed to the pandemic. The rise in meat alternatives remains a secular trend to drive BYND in the coming years.Top Consumer Stocks To Buy [Or Sell] Before Friday: Kraft Heinz
After years of underperformance, Kraft Heinz (KHC Stock Report) seems to be on the move again. Unlike other consumer stocks, KHC stock is already on the positive territory after rebounding sharply during the second quarter’s period. It seems the company is now ready to move beyond the poor performance in the past. Analysts are now saying that Kraft Heinz could be a turnaround opportunity. While many consumer trends come and go, ketchup does not seem to be replaceable any time soon.
Like Beyond Meat, if you believe things are about to get worse again, KHC stock could be one of your best investments. This is because more Americans seem to be eating at home more often instead of dining out. And that could benefit KHC stock tremendously.
KHC’s major shareholders include none other than Warren Buffett’s Berkshire Hathaway and Brazilian investment firm 3G Capital. The company has a defensive business with well-known brands and pays dividends. These are attractive qualities at a time when markets are facing uncertainties. Nevertheless, Kraft Heinz is facing its fair share of challenges. After all, more consumers are now looking for healthier and organic foods. They appear to be moving away from traditional packaged, processed foods. And this could present a risk to Kraft Heinz. With all that in mind, would you still consider buying KHC stock?