Top chocolate and bakery stocks to explore for a sweet tooth

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Top chocolate and bakery stocks to explore for a sweet tooth

 Top chocolate and bakery stocks to explore for a sweet tooth
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  • The advance estimates of US retail and food services sales for September 2021 were US$625.4 billion, a 13.9% increase from September 2020.

  • The Hershey Company’s (NYSE: HSY) dividend yield is 2.01%; the stock rose 17.93% YTD.

  • Rocky Mountain Chocolate Factory, Inc’s (NASDAQ: RMCF) revenue rose 49% YoY in the quarter ended August 31, 2021. Rocky has a dividend yield of US$5.88%. 

Scrumptious candies, chocolates, and cakes are the most sought-after items, especially during festivals and holidays. Reuters reported that Americans are expected to spend US$1.3 trillion this holiday season. Last year, the figure was US$1.19 trillion, it said, citing a Deloitte study.

Of course, there are concerns about the virus, inflation, and jobs. But with 64% of the US population vaccinated, people are raring to venture out, further boosting the holiday spirit.  

US Census Bureau’s advance estimates for September show that retail and food services sales will hit US$625.4 billion, up 0.7%, from August and a 13.9% jump from September last year. 

According to analysts, retail sales have increased last month, and are expected to increase further in the fourth quarter due to the holidays and festivals.

Here we discuss seven food stocks in the candy, chocolate, and bakery category.

The Hershey Company (NYSE: HSY)

The Hershey, Pennsylvania-based company is a household name, with brands like Hershey, Kit Kat, Ice Breakers, etc. The confectionery leader has a presence in over 85 countries.

It will declare the third-quarter results on Oct 28. 

The specialty food stock earned revenue of US$1.99 billion and an operating income of US$456 million in the quarter ended July 4, 2021. The net income was US$301 million.  

Its market capitalization is US$37 billion, and its dividend yield is 2.01%. Hershey’s annualized dividend is US$3.604, and the P/E ratio is 26.16. The stock gained 6.14% in one month and 17.93% YTD. The stock closed at US$178.73 on Oct 18.

Also Read: Dover (DOV), Halliburton (HAL) post strong Q3 revenue, profit growth

Top confectionary stocks: Hershey Company (NYSE: HSY), Tootsie Roll Industries, Inc. (NYSE: TR), Mondelez International, Inc. (NASDAQ: MDLZ), and Hostess Brands, Inc.

Source – pixabay

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Tootsie Roll Industries, Inc. (NYSE: TR)

The candy manufacturer’s top products include Tootsie Roll and Pops, Dots, Sugar Daddy, Razzles, etc. The company is based in Chicago, Illinois. 

For the June quarter of 2021, its total revenue, including product sales and rental and royalty income, was US$115.5 million. The operating income was US$6.9 million, and net income was US$9.8 million in the June quarter.

Its market capitalization is US$2.14 billion, the dividend yield is 1.14%, the annualized dividend is US$0.36, and the P/E ratio is 35.97. The stock closed at US$31.57 on Oct 18. Its one-month gain is 4.70% and 10.49% YTD.

Also Read: Travelers (TRV), Ericsson (ERIC) beat earnings estimates in Q3

Mondelez International, Inc. (NASDAQ: MDLZ)

The company has a presence in over 150 countries. Mondelez is a leading name in the snack business with brands like Oreo, Cadbury, Halls, etc. The company is headquartered in Chicago, Illinois. 

For June quarter 2021, the net income was US$1.08 billion on revenue of US$6.6 billion. MDLZ has a dividend yield of 2.33%, annualized dividend of US$1.40, a P/E ratio of 19.69 and a market capitalization of US$83 billion. The stock closed at US$59.75 on Oct 18. Its one-month return is 2.51% and YTD return is 2.0%.

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Hostess Brands, Inc. (NASDAQ: TWNK)

The company provides sweet baked goods, including Cupcakes, Donettes, Twinkies, Ding Dongs, and Zingers under Dolly Madison, Hostess, and Voortman brands.

The Lenexa, Kansas-based company has booked a net income of US$29.8 million on revenue of US$291 million for the June quarter of 2021. With a market capitalization of US$2.37 billion, it has a P/E ratio of 23.97. The stock closed at US$18.17 on Oct 18. Its one-month return is 4.69% and its YTD return is 24.21%.

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Rocky Mountain Chocolate Factory, Inc. (NASDAQ: RMCF)

The company manufactures chocolate candies and confectionery products like toffees, truffles, creams, and caramels. The company is based in Durango, Colorado.

As of October 15, 2021, the company and its subsidiaries, franchisees, and licensees operated 331 chocolate factories and frozen yogurt stores globally.

It earned a revenue of US$7.9 million, a 49% increase YoY and a net income of US$0.197 million for the quarter ended August 31, 2021. The operating income for the quarter was US$0.258 million.

Its current market capitalization is US$49.8 million, and its P/E ratio is 14.8. RMCF has a dividend yield of US$5.88%, with an annualized dividend of US$0.48. The chocolate maker stock closed at US$8.17 on Oct 18, 2021. Its one-month return is 12.16%, and its YTD return is 104.94%.

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Top bakery stocks: Hostess Brands, Inc. (NASDAQ: TWNK), Rocky Mountain Chocolate Factory, Inc. (NASDAQ: RMCF), The Chefs' Warehouse, Inc. (NASDAQ: CHEF), and Flowers Foods, Inc. (NYSE: FLO)

Source – pixabay

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The Chefs' Warehouse, Inc. (NASDAQ: CHEF)

The company is not into manufacturing chocolates or bakery products. Instead, it is engaged in distributing specialty food across the metropolitan areas in the US and Canada. The specialty food products include chocolates, bakery products, dried food, cheese, meat, etc.

The Ridgefield, Connecticut-based CHEF earned a net income of US$1.09 million on revenue of US$423 million for the quarter ended June 25, 2021. Its operating income was US$4.66 million for the same period. CHEF has a market capitalization of US$1.26 billion.

The stock closed at US$33.15 on Oct 18. The stock gained 1.57% in one month and 28.77% YTD.

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Flowers Foods, Inc. (NYSE: FLO)

The Thomasville, Georgia-based Flowers Foods produces bakery products for retail and food services. The portfolio includes tortillas, snack cake, rolls, bread, and buns, etc. 

Its revenue has constantly been increasing for the last four years. For the quarter ended July 17, 2021, the revenue was US$1.02 billion, and the net income was US$56.36 million. Its operating income was US$73.9 million. 

The company has a market capitalization of US$5.25 billion and a P/E ratio of 23.15. Its current dividend yield is 3.36%, and the annualized dividend is US$0.84. The stock closed at US$24.88 on Oct 18, 2021. The stock rose 5.01% in one month and 9.66% YTD.

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The Dow Jones US Food Products Total Stock Market Index (DWCFOD) generated a 1.82% return in one month and a 4.97% return YTD. Cake, chocolate, and candy-making companies draw enormous attention, particularly during festivals and celebrations. In addition, many companies also pay dividends. Nevertheless, investors must analyze the stocks carefully before investing.  


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