Top fake meat stocks to keep an eye on in 2022

Highlights

• Beyond Meat, Inc. (NASDAQ:BYND) had around 128,000 retail and foodservice outlets in over 85 countries as of Sept 2021.
• Tyson Foods, Inc. (NYSE:TSN) has a dividend yield of 2.11% and annualized dividend of US$1.84.
• Kellogg Company (NYSE:K) products are manufactured in around 21 countries and sold in over 180 countries. Its dividend yield is 3.6%. 

Fake meat products are gaining popularity lately. Several major fast-food outlets in the US and Europe have incorporated them in their menus.

Fake meat producers claim their products have all the protein and nutrients present in the animal food, minus the pollution observed in a traditional meat processing industry.

As a result, many climate-conscious consumers have been trying out fake meat products of late. On the other hand, investors see huge opportunities in this budding industry.

Moreover, non-vegetarian food might soon become unaffordable for the poor, given the high cost of production. Highlighting this concern is Biden’s fervent plea at a virtual conference on Monday with the meat producers and other industry stakeholders to reduce cost. And to drive home his point, he stressed: “Capitalism without competition isn’t capitalism, it’s exploitation.”

According to official data, prices of ground beef and bacon products went up by around 17% and 26%, respectively, YoY in November, highlighting the current high food inflation in the US. 

Meanwhile, companies that provide fake meat, or vegan substitutes, have risen in 2021.

Here we discuss five such companies that might be in focus in the coming years.

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Beyond Meat, Inc. (NASDAQ:BYND)

This El Segundo, California-based company offers a portfolio of revolutionary plant-based meat products that give the same experience as animal meat products like beef, pork, and poultry. 

The company had around 128,000 retail and foodservice outlets in over 85 countries as of September 2021. Its market capitalization is US$4.11 billion. 

The stock traded in the range of US$221.00 to US$62.06 in the last 52 weeks and closed at US$64.87 on Jan 3, 2021.

For the nine months ended Oct 2, 2021, its revenue was US$364 million compared to US$304 million in the same period of 2020.

The net loss came in at US$101 million or US$(1.61) per share diluted versus a net loss of US$27.7 million or US$(0.45) per share diluted in the first nine months of 2020.

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Tyson Foods, Inc. (NYSE:TSN)

The Springdale, Arkansas-based company was founded by John W. Tyson in 1935. Its operating segments include Beef, Pork, Chicken, and Prepared Foods. Its products and brand portfolio include Tyson, Jimmy Dean, Wright, Aidells, Hillshire Farm, Ball Park, etc. 

It has a market capitalization of US$31.9 billion and a P/E ratio of 10.53. Its forward P/E one-year ratio is 12.21, the dividend yield is 2.11%, and the annualized dividend is US$1.84.

The stock moved in the range of US$87.83 to US$62.59 in one year. The stock closed at US$87.8 on Jan 03.

For the fiscal year ended Oct 2, 2021, its total sales were US$47 billion, 8.9% growth YoY. In FY 2020 and FY 2019, the sales were US$43 billion and US$42.4 billion, respectively. The net income was US$3.06 billion in fiscal 2021 compared to US$2.07 billion in FY20.

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Kellogg Company (NYSE:K)

The Battle Creek, Michigan-based Kellogg was founded in 1906. It manufactures and markets packaged foods such as cookies, cereal, crackers, etc. 

Its brands include Frosted Flakes, Froot Loops, Special K, Rice Krispies, Eggo, Pop-Tarts, Morningstar Farms, etc. In 2012, it added the Pringles brand to its portfolio. The products are manufactured in around 21 countries and sold in over 180 countries.

Kellogg's market capitalization is US$22.38 billion. Its P/E ratio is 17.93, the forward P/E one-year ratio is 15.66, the dividend yield is 3.6%, and the annualized dividend is US$2.32.

The stock price moved in the range of US$68.60 to US$56.61 in the last 52 weeks. It closed at US$64.68 on Jan 3, 2021.

For the nine months ended Oct 2, 2021, its net sales were US$10.8 billion compared to US$10.3 billion in the corresponding months of 2020. 

The net income increased to US$1,055 million or US$3.07 per share diluted versus US$1,046 million or US$3.03 per share diluted in the same period of 2020.

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ConAgra Brands, Inc. (NYSE:CAG)

It is a packaged food company based in Chicago, Illinois. Its brands include Marie Callender's, Healthy Choice, Birds Eye, Duncan Hines, Banquet, Vlasic, Orville Redenbacher's, Hunt's, Reddi-Wip, Slim Jim, Wish-Bone, Earth Balance, plant-based meat brand Gardein, etc.

Its current market capitalization is US$16.6 billion. The P/E ratio is 13.91, and the forward P/E ratio for one year is 13.79. The dividend yield is 3.66%, with an annualized dividend of US$1.25.

The stock didn’t move drastically in the last 52 weeks and remained between US$39.09 and US$30.44. It closed at US$34.06 on Jan 3.

The company will announce its second-quarter results on Jan 6, 2022. For the first quarter ended Aug 29, 2021, it posted net sales of US$2.65 billion compared to US$2.67 billion in the same quarter a year ago. 

Its net income decreased to US$235.4 million compared to US$329 million in the first quarter of 2020. The EPS diluted was US$0.49 in Q1, 2021 versus US$0.67 per share diluted in Q1, 2020.

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Source - Pixabay

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Archer-Daniels-Midland Company (NYSE:ADM)

The Chicago, Illinois-based Archer Daniels Midland is an agricultural and food processing company. It produces ingredients for human and animal nutrition.

For instance, it processes oilseeds, wheat, corn, and other agri products. It operates in three reportable business segments: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition.

With a market capitalization of US$38.86 billion, it has a P/E ratio of 15 and a forward P/E one-year ratio of 13.86. It has a dividend yield of US$2.19%, with an annualized dividend of US$1.48.

The ADM stock traded in the range of US$69.30 to US$49.28 in one year and closed at US$67.89 on Jan 3, 2021.

The company earned revenue of US$62.16 billion for the nine months ended Sept 30, 2021, compared to US$46.38 billion in the same period of 2020. Its net income was US$1.93 billion or US$3.41 per share diluted compared to US$1.09 billion or US$1.93 per share diluted a year ago.

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Bottomline

The current high food inflation has provided an opportunity for plant-based meat companies to offer a cheaper alternative to animal meat. Fast-food giant Burger King has recently launched a vegan nugget item on the menu. The company aims to become 50% meat-free by 2030.

Given these factors, vegan food companies will remain in focus. However, investors should apply due diligence before investing in such stocks.