Packaged food stocks have been in the spotlight since the start of the pandemic. Packaged food sales jumped as consumers stocked up on food while assuming the worst and hoping for the best.

Though the pandemic is winding down, packaged food stocks will still receive plenty of attention now that their importance has been reinforced. However, the industry has plenty of players, so choosing only one to add to your portfolio is not exactly easy.

Here is a quick look at two packaged food stocks with legitimate merits: Farmmi (FAMI) and Pilgrim’s Pride (PPC).

Farmmi (FAMI)

FAMI supplies agricultural products. FAMI makes and sells mushrooms, edible fungi, and additional agricultural products. FAMI’s e-commerce subsidiary also provides direct access to local produce and other fresh food. FAMI is currently trading at 47 cents per share. The stock’s 52-week low is 30 cents per share and its 52-week high is $2.47.

Headquartered in Lishui, Zhejiang, China, FAMI has an overall grade of D, which translates into a Sell rating in our POWR Rating system. The company has an F grade in the Quality component and Ds in the Momentum, Stability, and Sentiment components. You can find out how FAMI grades out in the Growth and Value components by clicking here.

Of the 31 stocks in the Agriculture industry, FAMI is ranked 23rd. Click here to find other top stocks in this industry. It is concerning that FAMI has a year-over-year debt growth of 163%. This debt growth rate is higher than 93% of all stocks. 

Pilgrim’s Pride (PPC)

PPC processes, produces, markets, and distributes chicken products. These products are both frozen and fresh. Based in Greeley, Colorado, PPC is now attempting to bolster its prepared foods segment. The category has grown in the United States in recent years. PPC continues to add to its product mix, especially its organic foods and the company’s products without antibiotics.

PPC has an overall grade of A and a Strong Buy rating in our POWR Ratings system. The company has A grades in the Stability and Growth components and a B Value Grade. You can find out how PPC grades in the Quality, Sentiment, and Momentum components by clicking here. PPC is ranked sixth out of more than 80 stocks in the Food Makers industry. Investors can find other top stocks in this industry by clicking here.

PPC has a low forward P/E ratio of 11.12 and is held in high regard by analysts. Analysts have established an average target price of $27.67 for the stock. If PPC rises to this level, it will have popped by more than 23%. 

Three analysts rate the stock a Strong Buy and one rates it a Buy. The stock has greater upside potential than nearly 80% of the stocks in its industry.

Which is the Better Buy?

PPC is the better of these two plays. PPC has a much higher grade of A in the POWR Ratings. While FAMI is ranked toward the bottom third of its industry, PPC is ranked above all but for five stocks in its industry. 

FAMI shares were trading at $0.48 per share on Wednesday afternoon, up $0.02 (+4.79%). Year-to-date, FAMI has declined -60.00%, versus a 13.98% rise in the benchmark S&P 500 index during the same period.

About the Author: Patrick Ryan

Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...

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