13 Best Food Dividend Stocks To Buy Now
In this article, we discuss 13 best food dividend stocks to buy now. You can skip our detailed analysis of the food industry and its previous performance, and go directly to read 5 Best Food Dividend Stocks To Buy Now.
The food sector in the US is diverse and expansive, encompassing various aspects such as agriculture, food production, distribution, and consumption. Investors often favor food stocks due to their perceived stability and resilience, even during economic downturns. Food is a fundamental necessity, which means that demand for food products tends to remain relatively consistent regardless of market conditions. This consistency in demand offers a level of stability to food companies, making their stocks attractive to investors seeking safe havens or dependable returns. Additionally, food stocks are seen as defensive investments, meaning they can withstand economic fluctuations as people continue to purchase food even during tough times.
Don't Miss: Best Food Stocks to Buy
Despite the volatile nature of the market throughout 2022, marked by an S&P 500 decline of nearly 18%, food stocks remained remarkably stable. The leading manufacturers in the sector, including General Mills, Inc. (NYSE:GIS), The Kraft Heinz Company (NASDAQ:KHC), and Conagra Brands, Inc. (NYSE:CAG) demonstrated resilience by averaging a 22% return, factoring in dividends. While the broader market experienced significant fluctuations, these key players within the food industry showcased a steadiness that not only weathered the market storm but also yielded notable returns for investors, highlighting the sector's reliability even during uncertain economic times.
However, the landscape for food stocks shifted notably this year, as many experienced a significant downturn. The S&P Food and Beverage Select Industry, which tracks the performance of stocks belonging to various food subindustries, is down by 4.57% this year so far, significantly underperforming the S&P 500, which gained 19.09% year-to-date. That said, Wedbush analysts believe that restaurant stocks already reflect a recession, which they think is a chance for investors to buy. They mentioned that these stocks are selling at lower prices, similar to what you might see in worse economic times, making it a good opportunity to invest in them. The typical full-service restaurant stock is being traded at roughly 13.8 times its expected earnings for 2024. In contrast, the S&P 500 is valued at around 18 times earnings. The analysts pointed out that such a difference in value has occurred only three times in the last 15 years.
The US is a market leader in the packaged food sector, holding a significant market share of 18.6% in 2023, according to Future Market Insight’s report. This industry has been influenced by trends associated with mindful eating, which gained immense importance following the pandemic. Presently, American consumers are prioritizing food products that align with their diverse health and sustainability goals, while also considering traditional objectives such as weight management when making their food choices.
US packaged food companies are gearing up for changes in their brand lineup as their pandemic success slows down and the effects of price increases begin to ease off. There's been an increase in mergers and acquisitions (M&A) in the food industry during the first part of this year. While the total worth of deals in the US food and beverage sector decreased by nearly 3% to around $10.39 billion this year, the number of deals rose by 17.5% to 248 as of September 1, according to LSEG data. This surge in deal volumes highlights the food industry as a standout area for business deals.
As mentioned above, food stocks are often considered defensive investments due to the consistent demand for food regardless of economic conditions. Among these, companies in the food sector that pay dividends hold a particular appeal for investors. These dividend-paying food companies are favored for their stability and ability to generate regular income through dividends, which can be especially attractive in uncertain market environments. In this article, we will discuss some of the best dividend stocks from the food sector.
A friendly grocery store team stocking shelves with foodservice products.
Our Methodology:
For this list, we scanned Insider Monkey's database of Q3 2023 and picked dividend companies belonging to different segments within the food industry, such as food manufacturers, food processors, beverage companies, and restaurants. We analyze these companies through their financial health and dividend policies. The stocks are ranked in ascending order of the number of hedge funds having stakes in them, as of the third quarter of 2023.
13. Hormel Foods Corporation (NYSE:HRL)
Number of Hedge Fund Holders: 18
Hormel Foods Corporation (NYSE:HRL) is an American multinational food company that operates in various segments of the food industry. On November 20, the company declared a 2.7% hike in its quarterly dividend at $0.2825 per share. Through this increase, the company took its dividend growth streak to 58 years, which makes HRL one of the best dividend stocks on our list. The stock has a dividend yield of 3.52%, as of November 27.
At the end of Q3 2023, 18 hedge funds in Insider Monkey's database reported having stakes in Hormel Foods Corporation (NYSE:HRL), compared with 24 in the preceding quarter. The overall value of these stakes is $245.3 million.
12. Tyson Foods, Inc. (NYSE:TSN)
Number of Hedge Fund Holders: 24
Tyson Foods, Inc. (NYSE:TSN) is a major player in the food industry, particularly in the production of meat and protein-based products. The company currently pays a quarterly dividend of $0.49 per share, raising it from its previous dividend of $0.48 per share on November 13. This marked the company's 12th consecutive year of dividend growth, which places TSN as one of the best dividend stocks on our list. As of November 27, the stock has a dividend yield of 4.11%.
As of the close of Q3 2023, 24 hedge funds tracked by Insider Monkey reported having stakes in Tyson Foods, Inc. (NYSE:TSN), down from 31 in the preceding quarter. The overall value of these stakes is over $785.2 million. With over 5.4 million shares, Pzena Investment Management was the company's leading stakeholder in Q3.
11. McCormick & Company Incorporated (NYSE:MKC)
Number of Hedge Fund Holders: 33
McCormick & Company Incorporated (NYSE:MKC) is a Maryland-based global leader in the manufacture, marketing, and distribution of spices, seasoning mixes, condiments, and other flavoring products. The company offers a quarterly dividend of $0.39 per share and has a dividend yield of 2.39%, as recorded on November 27. It is one of the best dividend stocks on our list as the company has been raising its dividends for 37 consecutive years.
At the end of September 2023, 33 hedge funds owned stakes in McCormick & Company Incorporated (NYSE:MKC), according to Insider Monkey's database. The consolidated value of these stakes is roughly $1.5 billion.
10. The J. M. Smucker Company (NYSE:SJM)
Number of Hedge Fund Holders: 33
The J. M. Smucker Company (NYSE:SJM) is a well-known American multinational corporation that primarily operates in the food and beverage industry. In November, Bernstein upgraded the stock to Market Perform with a $119 price target due to the stock's cheap valuation and a more balanced risk/reward for investors.
The J. M. Smucker Company (NYSE:SJM), one of the best dividend stocks, currently offers a quarterly dividend of $1.06 per share, having raised it by 4% in July this year. This was the company's 22nd consecutive year of dividend growth. The stock has a dividend yield of 3.80%, as of November 27.
The number of hedge funds in Insider Monkey's database owning stakes in The J. M. Smucker Company (NYSE:SJM) grew to 33 in Q3 2023, from 29 in the previous quarter. The consolidated value of these stakes is nearly $460 million.
9. Archer-Daniels-Midland Company (NYSE:ADM)
Number of Hedge Fund Holders: 37
Archer-Daniels-Midland Company (NYSE:ADM) is an American company that provides services and products in the agricultural processing and food ingredient industry. On November 1, the company announced a quarterly dividend of $0.45 per share, which was in line with its previous dividend. The company's dividend growth streak currently stands at 50 years, which makes ADM one of the best dividend stocks on our list.
As of the end of Q3 2023, 37 hedge funds in Insider Monkey's database reported holding stakes in Archer-Daniels-Midland Company (NYSE:ADM), up from 32 in the preceding quarter. The total value of these stakes is over $769 million. With over 2.8 million shares, AQR Capital Management was the largest stakeholder of the company at the end of Q3 2023.
8. General Mills, Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 39
General Mills, Inc. (NYSE:GIS) is a multinational food company that specializes in the production and marketing of branded consumer foods. The company also caters to the food service industry by providing products to convenience stores, restaurants, and other food service channels. On November 14, the company declared a quarterly dividend of $0.59 per share, which was consistent with its previous dividend. The stock's dividend yield on November 27 came in at 3.70%.
General Mills, Inc. (NYSE:GIS) was a part of 39 hedge fund portfolios at the end of Q3 2023, according to Insider Monkey's database. The collective value of stakes owned by these hedge funds is over $465.8 million.
7. The Kraft Heinz Company (NASDAQ:KHC)
Number of Hedge Fund Holders: 40
The Kraft Heinz Company (NASDAQ:KHC) is an Illinois-based food company that is known for its extensive portfolio of iconic consumer brands, including Kraft, Heinz, Oscar Mayer, Jell-O, and Planters. The company offers a wide range of food products such as condiments, sauces, cheese, snacks, beverages, and packaged meals. It currently pays a quarterly dividend of $0.40 per share and has a dividend yield of 4.58%, as of November 27.
Of the 910 hedge funds tracked by Insider Monkey at the end of Q3 2023, 40 funds owned stakes in The Kraft Heinz Company (NASDAQ:KHC), up from 39 a quarter earlier. The total value of these stakes is roughly $12 billion.
6. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 41
The Kroger Co. (NYSE:KR) is next on our list of the best dividend stocks from the food sector. The American grocery retailer has been rewarding shareholders with growing dividends for the past 17 years and it currently offers a quarterly dividend of $0.29 per share. As of November 27, the stock has a dividend yield of 2.64%.
As of the end of September 2023, 41 hedge funds in Insider Monkey's database owned stakes in The Kroger Co. (NYSE:KR), compared with 43 in the preceding quarter. These stakes are collectively valued at more than $3 billion.
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Disclosure. None. 13 Best Food Dividend Stocks To Buy Now is originally published on Insider Monkey.
