SPTN to GO: 5 food and staple stocks to explore amid inflation

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SPTN to GO: 5 food and staple stocks to explore amid inflation

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 SPTN to GO: 5 food and staple stocks to explore amid inflation
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Highlights:
  • SpartanNash Company (NASDAQ: SPTN) declared a quarterly cash dividend of US$0.21 payable on June 30, 2022. Its current dividend yield is 2.35%.
  • Last month, Grocery Outlet Holding Corp. (NASDAQ: GO) partnered with Uber for grocery delivery.
  • Kroger Company (NYSE: KR) has a P/E ratio of 23.92 and a forward P/E for one year of 13.58. 

US inflation has risen to record levels this year. From 7.5% in January, it rose to 8.3% in April. The May data is expected on Friday, June 10. However, demand for staples and essential goods generally remains steady even during rising inflation, but discretionary goods might take a hit, as we saw in recent quarters. Thus, companies that produce food and other essential items, like nonalcoholic beverages, are generally least impacted by adverse macroeconomic conditions.

Here we discuss five food and staple retail stocks that gave more than 15% YTD return.

SpartanNash Company (NASDAQ: SPTN)

Closing price on June 6, 2022: US$34.46
Stock price range in last 52 weeks: US$37.48 to US$18.08

SpartanNash Co. operates in the US. It is a grocery distributor and retailer based in Grand Rapids, Michigan. Its operating segments are Military, Food Distribution, and Retail. 

The stock has a market capitalization of US$1.24 billion. Its P/E ratio is 16.69, and the forward P/E for one year is 15.18. 

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For the first quarter ended April 23, 2022, the company reported a net sale of US$2.76 billion, an increase of 4.0% YoY compared to the net sales of US$2.66 billion in the corresponding period of the prior year. Its net income remained at US$19.3 million or US$0.53 per diluted share compared to US$19.5 million or US$0.54 per share diluted in the same quarter in 2021.

The company has also declared a quarterly cash dividend of US$0.21 per common share payable on June 30, 2022, to shareholders of record on June 15, 2022. 

The dividend yield is 2.35%, while the annualized dividend is US$0.84.

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SPTN to GO: 5 food and staple stocks to explore amid inflation

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Grocery Outlet Holding Corp. (NASDAQ: GO)

Closing price on June 6, 2022: US$37.52
Stock price range in last 52 weeks: US$39.50 to US$21.01

Grocery Outlet Holding Corp is a grocery store headquartered in Emeryville, California. It offers branded quality products at discounted rates. Its stores are run by local independent operators and provide flexible buying.

The company’s net sales were US$831.4 million for the first quarter ended April 2, 2022. It rose 10.5% YoY from US$752.5 million in the previous year’s quarter. 

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Its net income declined 38.7% to US$11.6 million or US$0.12 per diluted share compared to US$18.89 million or US$0.19 per diluted share in the same quarter in fiscal 2021.

GO had 418 stores in seven states at the end of the quarter. It opened four new stores and closed one in the period. Last month, the company partnered with Uber for grocery delivery. 

The GO stock has a market capitalization of US$3.62 billion. Its P/E ratio is 67.0, and the forward P/E for one year is 49.37. 

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Natural Grocers by Vitamin Cottage, Inc. (NYSE: NGVC)

Closing price on June 6, 2022: US$17.51
Stock price range in last 52 weeks: US$24.25 to US$9.88

The Lakewood, Colorado-based company runs natural and organic grocery and dietary supplement stores. It offers nutritional supplements, natural and organic food, natural body care, and household and pet care products. 

For the quarter ended March 31, 2022, the company reported net sales of US$271.8 million compared to US$259.2 million in the previous year.

The company’s net income increased 35.1% to US$6.4 million YoY compared to US$4.7 million in the prior year. The EPS diluted rose to US$0.28 from US$0.21 in the March quarter of 2021. 

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On May 5, the company declared a quarterly cash dividend of US$0.10 per common share payable on June 15, 2022, to stockholders of record on May 31, 2022.

The stock has a market capitalization of US$397 million. Its P/E ratio is 14.47, and the forward P/E for one year is 19.24. The dividend yield is 2.28%, while the annualized dividend is US$0.40.

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Kroger Company (The) (NYSE: KR)

Closing price on June 6, 2022: US$52.15
Stock price range in last 52 weeks: US$62.78 to US$36.77

Kroger provides groceries through more than 2,700 supermarkets under different banners. These stores sell pharmacy products and fuel. The Cincinnati, Ohio-based company also runs more than 100 fine jewelry stores. 

Its fiscal year ended January 29, 2022, during which its net sales were US$137.9 billion compared to US$132.5 billion in the previous fiscal.

The net income attributable to the company came in at US$1.66 billion or US$2.17 per share diluted compared to US$2.58 billion or US$3.27 per share diluted in the previous year.

The stock has a market capitalization of US$37.59 billion. Its P/E ratio is 23.92, and the forward P/E for one year is 13.58. The dividend yield is 1.6%, while the annualized dividend is US$0.84.

SPTN to GO: 5 food and staple stocks to explore amid inflation© Xiuxiu84 | Megapixl.com

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Weis Markets, Inc. (NYSE: WMK)

Closing price on June 6, 2022: US$75.37
Stock price range in last 52 weeks: US$86.75 to US$50.78

Weis Markets Inc is a food products retailer headquartered in Sunbury, Pennsylvania. Its product offerings include fresh goods, dairy products, frozen foods, groceries, alcoholic beverages, general merchandise items, fuel, pharmacy services, etc. 

The company generated a net sale of US$1.1 billion for the quarter ended March 26, 2022, compared to US$1.0 billion in the previous year.

It reported a net income of US$31.4 million or US$1.17 per share diluted compared to US$24.26 million or US$0.90 per share diluted in the March quarter a year ago. The net income rose 29.4% YoY. 

The stock has a market capitalization of US$2.03 billion, and the P/E ratio is 17.49. The stock has a dividend yield of 1.69%, while the annualized dividend is US$1.28.

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Bottom line:

The S&P 500 Food & Staples Retailing Industry Index fell 12.19% YTD, outperforming the broader S&P 500 Index, which fell around 13.6% YTD. Amid a volatile stock market, investors should carefully evaluate the companies before investing in the stock market.

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