Pilgrim's Pride Corporation PPC is undoubtedly a solid investment option at the moment. The company’s shares have surged about 87.9% in the past year compared with the industry’s growth of 34.9%. Also, the stock outperformed the Zacks Consumer Staples sector’s growth of 18.6% in the same time frame. Robust initiatives have been driving the company’s performance.
That said, let’s discuss the factors that are likely to keep driving this Zacks Rank #1 (Strong Buy) stock, which has long-term earnings per share growth rate of 22.5%.
Robust Prepared Foods Business
The company’s Prepared Foods business is witnessing solid growth under well-known brands such as Premium Pilgrims and Del Dia. These brands are gaining from favorable consumer acceptance. During third-quarter 2019, volumes in the Prepared Foods category grew double digits in the United States backed by continued investments in R&D and sales as well as marketing of new products. Additionally, the company is rolling out a number of new technologies to become the first digital chicken company.
Buyouts: Key Driver
Pilgrim's Pride has been gradually strengthening its competency on the back of business acquisitions. Recently, the company announced the acquisition of a West Midlands food manufacturer — Tulip — to strengthen its position as a leading global player by expanding its prepared foods portfolio and brands. Earlier acquisitions like Moy Park (September 2017) and GNP Company (January 2017) are likely to keep bolstering sales in the upcoming quarters.
Moves to Augment Fresh Food Offerings
Pilgrim's Pride consistently strives to improve portfolio and strengthen competitive position through innovations. In this respect, the company has been expanding in the fresh food offerings space. In fact, the launch of fresh chicken products under premium Pilgrim's brand has been receiving favorable consumer response. Further, the company is on track to expand gluten-free products. Additionally, Pilgrim's Pride has been augmenting breast meat portioning capabilities to mitigate its exposure to volatility of pure commodity market.
Strategic Growth Endeavours Bode Well
Pilgrim's Pride’s focus on key customers has propelled the company to refine its portfolio and gain competitive edge over its peers. Notably, revenues from key customers have more than doubled in the past eight years. Apart from this, the company has been steadily augmenting marketing support of its brands, as they expand and enter new regions. Additionally, Pilgrim's Pride resorts to frequent supply-chain improvements to enhance efficiency and reduce costs. To this end, the company has been progressing well with developing automation technology for its processing plants. The company’s dedicated efforts, including zero-base budgeting and positive impacts from acquisitions, are expected to create synergies.
We believe that the aforementioned upsides are likely to help Pilgrim's Pride maintain its solid position in investors’ good books in the future.
Other top Picks
Helen of Troy Limited HELE, which sports a Zacks Rank #1, has a long-term earnings growth rate of 9.2%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Procter & Gamble Company PG, which carries a Zacks Rank #2 (Buy), has a long-term earnings growth rate of 7.5%.
e.l.f. Beauty Inc ELF, which carries a Zacks Rank #2, has a long-term earnings growth rate of 3.8%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Helen of Troy Limited (HELE) : Free Stock Analysis Report
e.l.f. Beauty Inc. (ELF) : Free Stock Analysis Report
Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report
Procter & Gamble Company (The) (PG) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research