Kalkine Media explores top frozen food stocks to watch in Q3

The runaway inflation in the US has hit consumer behavior and altered their spending habits to a large extent. Although consumer spending is above the expected mark, they have indeed moved to the basic items, shunning extravagance.

Frozen food items also fall under the basic commodities, and the sector has experienced some rapid sales in the past couple of months.

According to a report titled, “Frozen Breakfast Foods Market” by Distribution Channel and Geography, the sector is poised to grow at a CAGR of 7.69 per cent till 2026.

Some of the frozen food stocks include United Natural Foods, Inc. (NYSE: UNFI), Kellogg Company (NYSE: K), Bridgford Foods Corporation (NASDAQ: BRID), etc.

Here, we look at five frozen food stocks picked by Kalkine Media®:

United Natural Foods, Inc. (NYSE: UNFI)

United Natural Foods is the largest specialty and health food distributor in the US and Canada. The organic food company, which has its headquarters in Providence, Rhode Island, has a market valuation of US$ 2.5 billion.

The EPS (earnings per share) of the UNFI stock is 4.13. EPS is calculated by dividing a company's profit by the outstanding shares of its common stock.

Shares of United Natural Foods saw a spurt of 4.9 per cent in the past six months. On a YoY basis, the UNFI scaled over 16 per cent.

United Natural Foods announced on Wednesday, September 7, that it had introduced two meal solutions to its list of offerings to help retailers meet the growing demand for quick restaurant-style meals. These meals are made available to nationwide retailers.

The company posted Q3 2022 net sales of US$ 7.2 billion, an increase of 9.2 per cent from the previous year's corresponding quarter. Its net income of US$ 67 million increased by 39.6 per cent from the prior year.

Kellogg Company (NYSE: K)

The Kellogg Company, aka Kellogg's, is a US multinational food company based in Battle Creek, Michigan. The century-old maker and marketer of cereals, crackers, cookies, etc., with operations in over 21 countries, has a market cap of US$ 24.9 billion.

The K stock has a P/E (price to earnings) ratio of 16.9, deduced by dividing the company's profits by outstanding shares.

Kellogg Company pays a dividend of US$ 0.59 per share on a quarterly basis. It is next payable on September 15, 2022.

The K stock has jumped by 13.12 per cent this year so far. In one year, shares of Kellogg Company increased by 16 per cent.

For the quarter that ended July 2, 2022, Kellogg Company registered net sales of US$ 3,864 million relative to US$ 3,555 million in the year-ago period. Its Q2 2022 net income was US$ 326 million compared to the corresponding 2021 quarter net income of US$ 385 million.

At the end of the reported Q2 2022, Kellogg's total assets were US$ 18,937 million. 

Bridgford Foods Corporation (NASDAQ: BRID)

Bridgford Foods Corp is a manufacturer and distributor of frozen foods and other snacks in the US. Its product range includes bread roll dough items, biscuits, dry sausages, beef jerky, etc. The sale of snack items drives the majority of its revenue.

The US$ 129.25 million market cap company's stock has a P/E ratio of 3.2. The BRID stock has sprinted above 29 per cent in the past six months.

Shares of the Anaheim, California-based company rose by over 13 per cent year-over-year (YoY).

The stock last closed at US$ 14.24, up 3.64 per cent, with a share volume of 1,542 on September 7, 2022.

Its highest 52-week price was US$ 15.50, reached on July 12, 2022. It reached its lowest price of US$ 10.26 in the past 52 weeks on May 8, 2022.

The BRID stock's RSI (Relative Strength Index) value, as per Refinitiv data, was 54.02 as of September 8, 2022. It indicates that its market condition is stable.

For the quarter that ended July 8, 2022, Bridgford Foods announced total assets of US$ 180.6 million. Its net sales in the reported quarter were US$ 59.51, compared to the year-ago quarter of US$ 56.53 million.

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SpartanNash (NASDAQ: SPTN)

SpartanNash is a US company that distributes food and grocery items to independent store owners, corporate-run retail stores, military commissaries, etc. Its business spans 44 US states, Latin America, Europe, and the Middle East.

The Byron Center, Michigan-headquartered company, SpartanNash, has a market valuation of US$ 1.11 billion. It distributes a quarterly dividend of US$ 0.21, next payable on September 30, 2022.

SPTN stock jumped 20.3 per cent in 2022. It last closed at US$ 31.14 on September 7, 2022, which is 53.7 per cent higher than its 52-week lowest price of US$ 20.26 on September 20, 2021.

The stock's highest price in the past 52 weeks was US$ 37.48 on April 26, 2022. The RSI value of the SPTN stocks was 48.51 as of September 8, 2022, as shown by Refinitiv.

As for its financials, SpartanNash published its Q2 2022 results on August 18, 2022. Its net sales of US$ 2.3 billion in the second quarter of fiscal 2022 was a 7.9 per cent increase compared to the previous year's same quarter.

SpartanNash reported net earnings of US$ 5.1 million in Q2 2022, relative to US$ 16.8 million in the prior year's quarter.

Sysco Corporation (NYSE: SYY)

Houston, Texas-based Sysco Corporation distributes frozen food items, smallware, kitchen products, and tabletop products for restaurants, healthcare centers, educational institutions, and travel and leisure businesses.

The US$ 41.95 billion market cap company, Sysco Corporation, pays a dividend of US$ 0.49 per share on a quarterly basis. It is next going to pay the dividend on October 28, 2022.

The SYY stock closed 3.07 higher at US$ 82.90 on September 7, 2022, with a share volume of 1,921,158. The stock gained over 10 per cent in the last six months. On a YoY basis, it soared at 8.5 per cent.

The frozen food giant Sysco announced on August 2 that it had donated US$ 1 million to Feeding America. The amount will be distributed among 42 food centers across America.

Sysco published its fourth quarter financial results for fiscal 2022 on August 9.

Compared to the same quarter in 2021, its Q4 2022 sales grew by 17.5 per cent. It reported Q4 2022 sales of US$ 18.95 billion versus US$ 16.13 billion in the same quarter of 2021.

The company posted a net income of US$ 509.98 million in the fourth quarter of 2022, while it was US$ 151.09 million in the year-ago quarter.

Bottom line:

Although these frozen food stocks have done well in recent quarters, investing in the current situation is still fraught with uncertainties and chances of losing money. Long-term plans are considered best when the market is volatile and bearish. Investors should pick their stocks only after considerable analysis of the fundamentals.