As consumer preferences and industry dynamics evolve, the food and beverage sector continues to show promising investment opportunities, particularly among companies with strong regional presence.

Therefore, solid food & beverage stocks Lancaster Colony Corporation (LANC), Cal-Maine Foods, Inc. (CALM), and National Beverage Corp. (FIZZ) could be ideal picks. These stocks excel due to regional strength, innovative products, and adaptability to changing consumer demands, making them attractive options for investors targeting growth in the food and beverage sector.

The food and beverage market remains resilient amid persistent macroeconomic challenges, driven by evolving consumer preferences, advancements in digital technologies such as AI and ML, and the growth of the global population, which together create compelling opportunities for the industry.

According to recent data, the global food delivery market generated over $1 trillion in 2023, with $640 billion from grocery delivery alone. Despite the rise of convenience stores, supermarkets and grocery stores dominate, holding 85% of the market in 2022.

Further, the growing demand for online shopping has significantly boosted food and beverage sales, increasing their share of total retail e-commerce from 9.3% in 2017 to nearly 16% in 2023. This trend is expected to continue, with projections indicating a rise to 21.5% by 2027.

Given these favorable trends, let’s take a closer look at the food and beverage stocks:

Lancaster Colony Corporation (LANC)

LANC produces specialty food products, including frozen bread, rolls, salad dressings, dips, and sauces under brands like Marzetti and Sister Schubert’s. It also offers licensed products, such as Chick-fil-A sauces, catering to retailers, restaurants, and food service providers in the U.S.

On November 18, 2024, LANC announced the $75 million acquisition of a sauce and dressing production facility in Atlanta, Georgia, to enhance operational efficiency, expand capacity, and improve customer proximity.

On November 6, LANC declared a quarterly dividend of 95 cents per share, payable on December 31, 2024. It pays an annual dividend of $3.80, which translates to a dividend yield of 2.04% at the prevailing price levels.

During the fiscal first quarter that ended September 30, 2024, LANC’s net sales increased 1.1% year-over-year to $466.56 million. Its operating income is reported to be $55.86 million. In addition, the company’s net income and net income per common share came in at $44.70 million and $1.62, up 1.7% and 1.9% over the prior-year quarter, respectively.

Analysts expect LANC’s EPS and revenue for the quarter ended December 31, 2024, to increase 3.7% and 2.1% year-over-year to $1.94 and $495.90 million, respectively.

Over the past year, the stock has gained 9.7% to close the last trading session at $186.38. It soared 12% year-to-date.

LANC’s POWR Ratings reflect its robust outlook. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

LANC has a B grade in Stability and Quality. It is ranked #47 out of 74 stocks in the B-rated Food Makers industry.

Beyond what we have stated above, we also have given LANC grades for Growth, Sentiment, Value, and Momentum. Get all the LANC’s ratings here.

Cal-Maine Foods, Inc. (CALM)

CALM produces and markets shell eggs, including specialty and conventional options under brands like Egg-Land’s Best, serving grocery stores, supermarkets, and distributors across the U.S.

On October 7, 2024, CALM announced its Board’s approval of $40 million in capital projects to expand its cage-free production capabilities. The funding will come from cash reserves, investment securities, and operating cash flow.

For the fourth quarter of fiscal 2024, CALM intends to pay a cash dividend of approximately $1.02 per share to holders of its Common Stock and Class A Common Stock. It pays an annual dividend of $4.08, which translates to a dividend yield of 4.25% at the prevailing price levels.

In the fiscal first quarter ended August 31, 2024, CALM’s net sales increased 71.1% year-over-year to $785.87 million. Its operating income was $ 186.96 million, compared to a loss of $6.76 million in the prior year quarter. Moreover, its net income and net income per common share stood at $149.59 million and $3.06, respectively, rising significantly over the prior-year quarter.

Street expects CALM’s revenue and EPS for the second quarter ending November 30, 2024, to increase 35.6% and 765.7% year-over-year to $709.55 million and $3.03, respectively.

The stock climbed 67.2% year-to-date and 102.8% over the past year, to close the last trading session at $95.96.

CALM’s POWR Ratings reflect strong prospects. It has an A grade for Growth and a B for Quality. It is ranked #26 out of 74 stocks in the Food Makers industry.

To access CALM’s Value, Momentum, Stability, and Sentiment ratings, click here.

National Beverage Corp. (FIZZ)

FIZZ develops, markets, and sells beverages, including sparkling waters, juices, energy drinks, and soft drinks under brands like LaCroix, Shasta, and Faygo. It serves retailers and smaller accounts across take-home, convenience, and food-service channels in the U.S. and Canada.

FIZZ’s net sales increased 1.6% year-over-year to $329.47 million in the fiscal 2025 first quarter that ended on July 27, 2024. Its net income came in at $56.78 million, up 14.4% year-over-year, while its earnings per common share grew 15.1% from the year-ago value to $0.61.

Street expects FIZZ’s revenue for the fiscal second quarter (ending October 2024) to increase 3.3% year-over-year to $309.98 million. Its EPS for the same quarter is expected to grow 7.9% from the prior year to $0.51.

Shares of FIZZ have gained 3.7% over the past six months and 4.9% over the last month to close the last trading session at $47.87.

FIZZ’s bright prospects are apparent in its POWR Ratings. It has an A grade in Quality and a B for Stability. Within the B-rated Beverages industry, it is ranked #16 out of 32.

Click here to see FIZZ’s ratings for Growth, Value, Momentum, and Sentiment.

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LANC shares were unchanged in premarket trading Monday. Year-to-date, LANC has gained 13.63%, versus a 26.47% rise in the benchmark S&P 500 index during the same period.

About the Author: Kritika Sarmah

Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities. More...

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