3 Buy Ranked Grocery Store Stocks Riding the Organic Trend - Stocks in the News
When the Dietary Guidelines Advisory Committee issued its new recommendations last week, many were pleased with some of the newly sanctioned options. Eggs are no longer villainized for their cholesterol; multiple cups of coffee per day can actually be good for you.
And going beyond what’s on your plate, the committee also issued standards aligning diet with environmental impact. The directives to eat a plant-based diet are based not only on nutrition needs but sustainability as well.
The new guidelines underscore a growing movement among consumers, who now expect better quality food and a range of diet options at their local grocery store. Natural and organic foods aren’t just a fad, as some predicted – they’re the new standard. These three Zacks Rank #2 (Buy) stocks have taken note and are giving shoppers – and investors – what they want.
Sprouts Farmers Market Inc (SFM)
This young Phoenix, Arizona-based company sells natural and organic foods primarily in the United States. Just as the new dietary guidelines emphasize eating less meat and more plants, the fresh produce-focused strategy at this store should fit with Americans’ changing diet tastes.
To be sure, the company has positioned itself for financial growth as well. Its current growth estimate sees earnings per share sprouting 44 percent, with a long term growth rate of 25.3 percent. Its eyes aren’t bigger than its stomach either: It has beaten analyst estimates every time over the past year, posting an average EPS surprise of 18 percent (Read more: Why Sprouts Farmers Market Could Be an Impressive Growth Stock).
Whole Foods Market Inc (WFM)
While Sprouts offers the natural and organic foods consumers are looking for, Whole Foods boasts both those and a commitment to sustainable food practices. The world’s largest natural foods purveyor has worked to change its image from an expensive, high-minded store to everyone’s neighborhood market.
For the most part, that strategy is working. Whole Foods stock has been on the rise since October, steadily climbing back to its all-time high at $65.31. A string of strong earnings has put the company back on track, proving that it can capture the growing customer base that wants healthy and responsible options at the grocery store (Read more: Whole Foods Stock Rises on Earnings Beat and Record Sales).
The Kroger Co (KR)
Even with its new marketing campaign and lower prices, Whole Foods still struggles to offer the bargain deals stores such as Kroger can. Consumer sentiment is still stuck stubbornly low, meaning consumers are hesitant to spend money saved from lower gas prices on things such as more expensive groceries.
But they still want to eat healthier. That’s where Kroger steps in. The store now offers an increased organic selection, allowing customers to pick some foods they want at higher quality while still mixing in the bargain deals on sale in other parts of the store. The strategy helps Kroger get a foot in the door for a new dietary culture while still catering to its current market.
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WHOLE FOODS MKT (WFM): Free Stock Analysis Report
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KROGER CO (KR): Free Stock Analysis Report
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