Pilgrim's Pride Corporation PPC looks alluring on the back of robust growth strategies and advancements in the Prepared Foods business. The renowned chicken products manufacturing company’s shares have rallied 48% in the past six months compared with the industry’s growth of 20%. Let’s take a closer look at the aspects that are driving this Zacks Rank #1 (Strong Buy) stock.
Prepared Foods Unit is a Growth Catalyst
The company’s Prepared Foods business is growing under brands such as Premium Pilgrims and Del Dia. These brands are gaining from favorable consumer acceptance. Volumes in the Prepared Foods category grew double digits in Mexico during the second quarter of 2019. The company plans to continue making investments to strengthen the unit. In this respect, it plans to innovate products and improve marketing capabilities. Management expects the Prepared Foods category to contribute significantly to sales.
Boosting Fresh Food Offerings
Pilgrim’s Pride consistently strives to improve portfolio and competitive position through innovations. In this respect, the company is expanding in the fresh food offerings space. In fact, the launch of fresh chicken products under premium Pilgrim's brand is receiving favorable response from consumers. Moreover, it is on track to expand gluten-free products. The company expects organic products, including No-Antibiotics-Ever products, to account for nearly 40% of U.S. fresh portfolio in 2019.
Other Efforts to Bolster Portfolio
Pilgrim’s Pride is gradually boosting its competency on the back of business acquisitions like the GNP Company and the Moy Park, among others. Further, the company’s customer centric approach has propelled it to come up with unique offerings that provide it competitive advantage. Apart from this, the company is steadily augmenting marketing support for its brands, as they expand and enter new regions.
Additionally, the company resorts to frequent supply-chain improvements to enhance efficiency and reduce costs. In this context, it is on track to develop automation technology for its processing plants. Introduction of such advanced technology is expected to increase efficiency and enable the company to combat labor availability issues. The company’s dedicated efforts, including zero base budgeting and positive impacts from acquisitions, are expected to create synergies of $50 million in the next two years.
We expect that such admirable efforts will continue to keep Pilgrim’s Pride on the growth trajectory.
Looking for More Consumer Staples Picks? Check These
Hershey HSY presently has a Zacks Rank #2 (Buy) and long-term EPS growth rate of 8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Conagra Brands CAG, with a Zacks Rank #2, has long-term earnings growth rate of 7%.
The Estee Lauder Companies EL, with long-term earnings growth rate of 13%, carries a Zacks Rank #2.
5 Stocks Set to Double
Zacks experts released their picks to gain +100% or more in 2020. One is a famous cutting-edge food company that is “hiding in plain sight.” Swamped with competitors and ignored by Wall Street, its stock price floundered. Now, suddenly, it acquired a company that gives it an advantage none of its peers have.
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