5 Solid Stocks to Buy on Jump in Online Grocery Sales
The retail sector has been struggling amid inflationary pressure. Consumers cut down on discretionary goods and mainly spent on necessities such as grocery items throughout 2023. The grocery segment, which is part of the consumer staples sector, has thus not been affected much.
In fact, groceries have been driving the overall retail sales to a great extent during these trying times. Also, the majority of Americans are buying groceries online, a trend that picked up during the pandemic.
Online grocery sales totaled $8.5 billion in January, increasing 1.8% year over year, according to the Brick Meets Click/Mercatus Grocery Shopper Survey.
Online grocery sales totaled $95.8% in 2023, a 2% decline from the previous year. Although, sales declined last year, the figures are quite impressive compared to other segments, which took a major hit owing to the rising costs.
The ship-to-home segment saw year-over-year sales growing to $1.5 billion in January 2024, up 7.8% from the previous year. The segment got a boost in sales volume due to a solid jump in monthly active users (MAUs) and a more than 7% increase in average order value (AOV).
The pandemic prompted a surge in online shopping as millions sought to avoid the risk of contracting the virus. This trend has continued, with Americans now realizing the convenience of shopping online.
Also, sellers are redirecting their attention to strengthening their online platforms.
The grocery segment, being essential, is deemed defensive in times of price fluctuations and market instability. Given that markets have turned volatile once again after data showed that inflation soared in January, dimming hopes of a rate cut anytime soon, investing in defensive stocks like grocery companies that boast a robust online presence appears to be a prudent choice.
Our Choices
We have narrowed down our search to five consumer staple stocks such as Post Holdings, Inc. POST, Lancaster Colony Corporation LANC, Lamb Weston Holdings, Inc.LW, Tyson Foods, Inc. TSN and The Simply Good Foods Company SMPL. The stocks have a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Post Holdings is a consumer-packaged goods holding company involved in the production of center-of-the-store, refrigerated, foodservice, food ingredient and convenient nutrition product categories. POST also engages in the private brand food category.
Post Holdings has an expected earnings growth rate of 3.4% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 13.8% over the past 60 days. POST presently sports a Zacks Rank #1.
Lancaster Colony is a manufacturer and marketer of specialty food products for the retail and foodservice markets. LANC’s wholly-owned subsidiaries, including T. Marzetti Company, produce and market high-quality national and regionally-branded food products throughout the United States for the retail and foodservice markets.
Lancaster Colony has an expected earnings growth rate of 29.5% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 4.4% over the past 60 days. LANC presently has a Zacks Rank #2.
Lamb Weston is a leading global manufacturer, marketer and distributor of value-added frozen potato products, particularly French fries, and provides a range of appetizers. LW, along with its joint venture allies, is the top frozen potato products supplier in North America. It also operates internationally, with a robust and growing presence in emerging markets.
Lamb Weston’s expected earnings growth rate for the current year is 26.9%. The Zacks Consensus Estimate for the current-year earnings has improved 1.7% over the past 60 days. LW currently has a Zacks Rank #2.
Tyson Foods is the biggest U.S. chicken company and produces, distributes and markets chicken, beef, pork as well as prepared foods. TSN’s products are marketed and sold primarily by sales staff to grocery retailers, grocery wholesalers, meat distributors, military commissaries, industrial food processing companies, chain restaurants, international export companies and domestic distributors.
Tyson Foods’expected earnings growth rate for the current year is 74.6%. The Zacks Consensus Estimate for the current-year earnings has improved 23.2% over the past 60 days. TSN currently sports a Zacks Rank #1.
The Simply Good Foods Company’s product portfolio consists primarily of nutrition bars, ready-to-drink shakes, snacks and confectionery products marketed under the Atkins(R), SimplyProtein(R), Atkins Endulge(R) and Atkins Harvest Trail brand names. SMPL is based in Denver.
The Simply Good Foods Company’s expected earnings growth rate for the current year is 11.1%. The Zacks Consensus Estimate for the current-year earnings has improved 1.7% over the past 60 days. SMPL currently sports a Zacks Rank #1.
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Tyson Foods, Inc. (TSN) : Free Stock Analysis Report
Post Holdings, Inc. (POST) : Free Stock Analysis Report
The Simply Good Foods Company (SMPL) : Free Stock Analysis Report
Lancaster Colony Corporation (LANC) : Free Stock Analysis Report
Lamb Weston (LW) : Free Stock Analysis Report
