10 Best Pizza Stocks To Buy Now
In this article, we discuss 10 best pizza stocks to buy now. If you want to skip our detailed discussion on the pizza industry, click 5 Best Pizza Stocks To Buy Now.
ResearchAndMarkets.com reported that in 2022, the worldwide pizza market was valued at $141.1 billion. According to the publisher's forecasts, the market is anticipated to reach $192.4 billion by 2028, indicating a compound annual growth rate (CAGR) of 5.3% during the forecast period from 2022 to 2028. The market is being driven by several key factors, including the wide adoption of westernized lifestyles leading to changes in dietary habits, the growing preference for ordering pizzas online through websites and mobile applications, and the introduction of healthier pizza varieties such as vegan, low-calorie, and gluten-free options. According to Future Market Insights, the global frozen pizza market is expected to experience notable growth in the coming years. By 2023, it is estimated to reach a value of more than $20,196 million, and by 2033, the market is projected to be valued at $35,994 million, indicating a compound annual growth rate of 6% between 2023 and 2033. In 2022, the United States already owned a significant share of 17.2% in the global frozen pizza market, and by 2033, it is expected to capture 79.5% of the market.
Based on the ‘State of the Pizzeria Industry Report’ by Pizza Today, the majority of pizzeria operators expressed optimism or neutrality regarding their sales in 2023. The report thoroughly examined the state of pizzerias in America by conducting surveys with more than 750 owners representing all 50 states. Approximately 20.4% of the respondents anticipated that their gross annual sales would remain steady this year. Nearly 17.5% believed there would be a growth in sales ranging from 5% to 9%, while 16.2% predicted a sales increase between 1% and 4% in 2023. 10.6% of the respondents expected a notable growth of 10% to 15% in their sales. Only 22.2% of pizzeria operators were concerned that their sales in 2023 would not exceed those in 2022. 92.5% of the operators indicated that they would raise their prices in 2023 to compensate for increased cost of raw materials. After this adjustment, about one-third of the participants forecasted an increase in total profits this year. Technomic’s ‘Technomic Pizza Consumer Trend Report’ for 2022 indicated that 65% of surveyed consumers expressed that their pizza consumption will stay consistent in 2023. Additionally, 18% of the respondents mentioned that they expected a slight increase in their pizza consumption in 2023.
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Aaron Allen & Associates, global restaurant consultants based in Florida, highlighted some trends that the pizza industry is expected to encounter in the upcoming years. Firstly, the growth of the pizza industry in the US is predicted to be slower in contrast to the overall foodservice industry. While Food Away From Home sales have been rising at an average rate of 6.2% per annum over the past three years, the pizza segment is projected to have a compound annual growth rate of 4.6%. Secondly, as the pizza segment becomes more saturated, smaller chains may experience a decline in market share or be acquired by larger players. While certain pizzerias like Cicis and Sbarro might face challenges, prominent players like Domino's are expected to open new locations. Moreover, major industry players will introduce innovative methods of ordering, which will encourage independent operators to invest more in technology to gain a competitive edge. Pizza consumption is expected to remain steady, but there will be a consolidation trend, leading to weaker players being acquired. This presents an opportunity for private equity firms seeking to invest in restaurant concepts. Additionally, there is a growing demand for investors that can assist in reviving and enhancing mature brands that have not kept up with new trends.
Individuals seeking investment opportunities in the restaurant industry can consider buying stocks such as Yum! Brands, Inc. (NYSE:YUM), Domino's Pizza, Inc. (NYSE:DPZ), and The Kraft Heinz Company (NASDAQ:KHC).
Our Methodology
While we primarily chose companies that make and deliver pizzas for this list, we also added a few firms which provide raw materials/ingredients for the pizza industry, including cheese, flour, and toppings. We selected the following stocks in the pizza industry based on the hedge fund sentiment toward each stock. We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the first quarter of 2023. The list is arranged in ascending order of the number of hedge fund holders in each firm.
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Best Pizza Stocks To Buy Now
10. Rave Restaurant Group, Inc. (NASDAQ:RAVE)
Number of Hedge Fund Holders: 3
Rave Restaurant Group, Inc. (NASDAQ:RAVE) is a Texas-based company that owns and franchises pizza buffet, delivery/take-out, and express restaurants under the Pizza Inn brand in the United States and internationally. The company’s operations are divided into three segments – Pizza Inn Franchising, Pie Five Franchising, and Company-Owned Restaurants. On May 4, Rave Restaurant Group, Inc. (NASDAQ:RAVE) reported an FQ3 GAAP EPS of $0.02 and a revenue of $3 million, up 14.5% on a year-over-year basis.
According to Insider Monkey’s first quarter database, 3 hedge funds held stakes worth $623,000 in Rave Restaurant Group, Inc. (NASDAQ:RAVE), compared to 5 funds in the prior quarter holding stakes worth $658,000.
In addition to Yum! Brands, Inc. (NYSE:YUM), Domino's Pizza, Inc. (NYSE:DPZ), and The Kraft Heinz Company (NASDAQ:KHC), Rave Restaurant Group, Inc. (NASDAQ:RAVE) is one of the best pizza stocks to watch.
9. Nestlé S.A. (OTC:NSRGY)
Number of Hedge Fund Holders: 4
Nestlé S.A. (OTC:NSRGY), a Swiss multinational food and beverage company, offers a range of frozen pizzas under the DiGiorno brand. DiGiorno's pizza crusts include rising crust, stuffed, croissant, hand tossed, thin crust, crispy pan, and gluten free. Nestlé S.A. (OTC:NSRGY) is one of the best pizza stocks to invest in. On February 16, the company reported an FY 2022 non-GAAP EPS of CHF4.80 and a revenue of CHF94.42 billion, up 8.4% on a year-over-year basis.
According to Insider Monkey’s first quarter database, 4 hedge funds held stakes worth $1 billion in Nestlé S.A. (OTC:NSRGY), compared to 4 funds in the prior quarter worth $1.60 billion. Tom Russo’s Gardner Russo & Gardner is the largest stakeholder of the company, with approximately 8.2 million shares worth $996.8 million.
Here is what Semper Vic Partners has to say about Nestlé S.A. (OTC:NSRGY) in its Q2 2021 investor letter:
“I believe that Nestlé shares are well-positioned in our portfolios based on its global growth potential. Nestlé’s global growth potential is a dividend from their trusted consumer brands’ 100-year command presence in over 100 countries. Over these years, Nestlé has developed trusted and cherished iconic brands. For instance, Nestlé has over 30 brands that have over $1 billion of annual turnover. Nestlé benefits from a vast Total Addressable Market (TAM) available through developing and emerging market consumers shifting from subsistence economies to the introduction of market-based economies. Nestlé benefits from its market leadership in two key categories that evidence extremely high brand loyalty – global pet food/care and global premium coffee (led by Nestlé’s globally leading Nespresso).
More importantly, Nestlé has a culture of long-term investing. Nestlé has long excelled at securing new markets and rolling out new products, often adjacent to long-standing brands. They also have a history of internal innovation (e.g., behind launch of new brand’s single-serve coffee platform, as a result of external acquisition of companies whose brands, technology, patent, manufacturing, route-to-market, adjacent category presence, etc., offer powerful long term returns on incremental investments deployed to meet demands of growing consumers and growing affordability for those consumers of Western-style goods and services). (Click here to read full text)
8. BJ's Restaurants, Inc. (NASDAQ:BJRI)
Number of Hedge Fund Holders: 12
BJ's Restaurants, Inc. (NASDAQ:BJRI) owns and operates casual dining joints in the United States, offering pizzas, beers, appetizers, pastas, sandwiches, specialty salads, and desserts. BJ's Restaurants, Inc. (NASDAQ:BJRI) is one of the best pizza stocks to invest in. On April 27, the company reported a Q1 GAAP EPS of $0.15 and a revenue of $341.28 million, outperforming Wall Street estimates by $0.11 and $9.93 million, respectively. The comparable restaurant sales increased 9.0% in the first quarter of 2023.
According to Insider Monkey’s first quarter database, 12 hedge funds were bullish on BJ's Restaurants, Inc. (NASDAQ:BJRI), compared to 13 funds in the last quarter. John Overdeck and David Siegel’s Two Sigma Advisors is the largest stakeholder of the company, with 213,200 shares worth $6.2 million.
7. Papa John's International, Inc. (NASDAQ:PZZA)
Number of Hedge Fund Holders: 23
Papa John's International, Inc. (NASDAQ:PZZA) operates and franchises Papa John's pizza delivery and carryout restaurants worldwide. Its operations are divided into four segments – Domestic Company-Owned Restaurants, North America Commissaries, North America Franchising, and International Operations. Papa John's International, Inc. (NASDAQ:PZZA) is one of the best pizza stocks to invest in.
On May 4, Papa John's International, Inc. (NASDAQ:PZZA) reported a Q1 non-GAAP EPS of $0.68, beating market estimates by $0.01. The revenue of $527 million, however, fell short of Wall Street consensus by $7 million. The company also paid a $0.42 per share quarterly dividend to shareholders on May 26.
According to Insider Monkey’s first quarter database, 23 hedge funds were bullish on Papa John's International, Inc. (NASDAQ:PZZA), with collective stakes worth $147.7 million. Jeffrey Smith’s Starboard Value LP is the biggest position holder in the company, with 582,432 shares valued at $43.6 million.
Choice Equities Capital Management made the following comment about Papa John’s International, Inc. (NASDAQ:PZZA) in its Q4 2022 investor letter:
“Our holdings are generally performing as anticipated. As a general statement, despite the potential economic headwinds, we continue to expect growing cash flows, and in nearly all cases operating margin expansion, into next year and beyond. Restaurants – Signs suggest our restaurant margin expansion thesis continues to play out as expected, as restaurants have historically been slow to walk back inflation-based menu price increases with their customers by lowering prices even if incoming food costs decline. Papa John’s International, Inc. (NASDAQ:PZZA) and Brinker International (EAT) continue to execute well.
We continue to find new attractive investments, particularly under a broader theme of normalization. Somewhat like our restaurant margin expansion thesis, we are finding ample opportunities in other industries where companies look poised for margin expansion on the back of cost relief from normalizing prices on items such as freight, cotton or merchandising margins.”
6. The Chefs' Warehouse, Inc. (NASDAQ:CHEF)
Number of Hedge Fund Holders: 24
The Chefs' Warehouse, Inc. (NASDAQ:CHEF) was founded in 1985 and is headquartered in Ridgefield, Connecticut. The company provides specialty food products in the United States and Canada. These include artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate, and pastries. On May 3, The Chefs' Warehouse, Inc. (NASDAQ:CHEF) reported a Q1 non-GAAP EPS of $0.12 and a revenue of $719.6 million, outperforming Wall Street estimates by $0.01 and $83.48 million, respectively. The company estimates net sales for FY2023 to be in the range of $3.20 billion to $3.30 billion, versus a consensus revenue of $2.95 billion.
According to Insider Monkey’s first quarter database, 23 hedge funds were bullish on The Chefs' Warehouse, Inc. (NASDAQ:CHEF), compared to 25 funds in the prior quarter. Joe Milano’s Greenhouse Funds is the biggest stakeholder of the company, with 2.20 million shares worth approximately $75 million.
Like Yum! Brands, Inc. (NYSE:YUM), Domino's Pizza, Inc. (NYSE:DPZ), and The Kraft Heinz Company (NASDAQ:KHC), The Chefs' Warehouse, Inc. (NASDAQ:CHEF) is one of the top pizza stocks to consider.
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Disclosure: None. 10 Best Pizza Stocks To Buy Now is originally published on Insider Monkey.
