Investors have many reasons for investing in plant-based food stocks. Whether they have a personal penchant for socially responsible investing or are just looking to make some cold hard cash in a burgeoning industry, there are many companies to consider.
But there are also a lot of ups and downs in the vegan-friendly and plant-based industries. Even one of the most recognizable names in the vegan meat industry, Beyond Meat (NASDAQ:BYND), has been down consistently over the last five years, with very few times of sustained value.
However, the overall sector’s potential for growth remains robust, and plant-based stocks can yield significant returns. The plant-based food market value is currently at $46.7 billion and could expand to $96.6 billion by 2033. That’s a compound annual growth rate (CAGR) of 8.4%. With such a positive outlook, investors could see their portfolios flourish with these plant-based food stocks.
Laird Superfood (LSF)
Founded in 2015, Laird Superfood (NYSEAMERICAN:LSF) specializes in providing plant-based coffee creamers, hydration supplements and other foods. The stock topped out at $57 in 2020 but has since dropped dramatically. It is now trading at around $4 a share. However, recent quarterly results prove that the company is back on the upswing.
“After more than 18 months of executing a turnaround on our business, I am pleased to announce first quarter results that demonstrate the achievement of our growth and margin goals,” said CEO Jason Vieth on a recent investor call. The company’s 22% net sales growth during the first quarter was among the top results for any company in the food industry. The company saw at least a 40% gross margin. While the company still operates at a net loss, its balance sheet remains strong with no debt. The company raised its outlook for net sales thanks to the positive Q1 results.
LSF stock is affordable for investors looking to enter the vegan-friendly and plant-based food stocks segment. Laird Superfood has many potential growth opportunities on the horizon. Its wholesale channel now sells more than its direct-to-consumer business. It recently received a $32 million influx of funding from WeWork. All this combined means investing now could see great returns in the long term.
SunOpta (STKL)
SunOpta (NASDAQ:STKL) has been producing plant-based food and beverages for over 50 years. In the past three years, the company has committed over $200 million to expanding production capacity and reaching its goal of doubling its plant-based business by 2025.
Across the several segments the company operates in, there is a $22 billion addressable market. The company’s nutritional beverages sector saw the largest year-over-year (YOY) growth at 20%. The company also partners with other major names in the food retail industry. These include Costco (NASDAQ:COST), Walmart (NYSE:WMT) and Target (NYSE:TGT). Partnering with big retail brands helps increase the exposure of its products and, in turn, generates higher sales volume.
STKL stock has had its ups and downs over the past five years but currently has a 93% upside. A recent expansion at its Modesto, Calif. facility will allow SunOpta to “increase the amount of oat milk produced annually by more than 60%, meeting ongoing customer demand.” The company’s next quarterly results will be announced on August 7, and considering its previous quarter had several earnings beats and positively adjusted outlooks, now might be a good time for investors to get in on this plant-based food stock before it starts to rally.
Tyson Foods (TSN)
One of the most well-known chicken brands in the U.S. may not seem like a good pick for a list of plant-based food stocks. For investors who want to feel good about investing in companies working toward making more plant-based options but don’t want to gamble on a company solely focused on that sector, Tyson Foods (NYSE:TSN) is a good way to diversify.
Though down substantially over the last five years, TSN stock has seen a rally of 10% in the last 12 months and 6.5% year-to-date (YTD). In the previous five years, Tyson has been increasing its plant-based offerings through its brand, Raised and Rooted, and has 10 plant-based products. These include plant-based patties, ground meat substitutes, sausages and nuggets. As inflation dampens demand for meat as prices soar, Tyson’s presence in the plant-based industry will give it a head start compared to its competitors.
Though there have been some financial troubles for the company in the last year or so, things are starting to turn around. The company began fiscal 2024 with two steady quarters. CEO Donnie King recently shared his optimistic outlook at an investor conference in May. “The first half of this year, we are fundamentally a stronger company.”
Third-quarter financial results for Tyson Foods will be released in August. If management’s optimism is to be believed, buying TSN now could generate a nice profit when the newest results come out shortly.
On the date of publication, Philippa Main did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.