HLF:CC - The Best Canadian Food Stocks August 2023
2023-08-03 13:45:00 ET
Canadians have felt the pinch of higher inflation rates since the end of the pandemic. One of the key drivers of inflation has been increased food prices. In late 2022, Dalhousie University unveiled the 2023 Canada Food Price Report. That report forecast that the average Canadian family of four would spend $1,065 more on food in 2023. Moreover, it projected that overall food prices would experience price growth between 5% and 7%.
Today, I want to look at three of the best Canadian food stocks to snatch up in early August 2023.
Here’s why this food stock could deliver explosive growth in the years ahead
Maple Leaf Foods ( TSX:MFI ) is a Mississauga-based company that produces food products in Canada, the United States, and around the world. Shares of this food stock have jumped 11% month over month as of late-morning trading on August 3. The stock is up 16% so far in 2023.
This company released its second-quarter (Q2) fiscal 2023 earnings before markets opened today. Total company sales increased 6.2% year over year to $1.27 billion. EBITDA stands for earnings before interest, taxes, depreciation, and amortization, aiming to get a clearer picture of a company’s profitability. In Q2, Maple Leaf reported an adjusted EBITDA margin of 8.1%.
The Meat Protein Group reported sales of $1.23 billion — up 6.6% compared to the previous year. Meanwhile, the Plant Protein Group posted sales of $36.7 million while adjusted EBITDA surged 61% from the prior year to a loss of $11.6 million. In the first half (H1) of fiscal 2023, Maple Leaf posted sales growth of 5.3% to $2.44 billion.
Shares of this Canadian food stock are trading in very favourable value territory compared to its industry peers. Moreover, Maple Leaf offers a quarterly dividend of $0.21 per share. That represents a 2.8% yield.
This fishy food stock looks undervalued in early August
High Liner Foods ( TSX:HLF ) is the second Canadian food stock I’d look to snatch up in the final full month of the summer season. This Nova Scotia-based company processes and markets frozen seafood products in North America. Its shares have dipped 2% month over month at the time of this writing. The stock is still up 1.2% in the year-to-date period. Investors can see more of its recent performance with the interactive price chart below.
In late July, High Liner announced that it would release its second batch of fiscal 2023 results on August 10. The company reported sales growth of 11% to $329 million in Q1 2023. Meanwhile, adjusted EBITDA climbed 10% year over year to $31.2 million. Adjusted net income jumped 8.6% to $16.4 million.
This food stock currently possesses a very attractive price-to-earnings (P/E) ratio of 6.7 . Moreover, it offers a quarterly dividend of $0.13 per share, which represents a 3.7% yield.
One more highly dependable dairy giant I’m targeting today
Saputo ( TSX:SAP ) is the third and final Canadian food stock I’d look to snatch up today. This Montreal-based company produces, markets, and distributes dairy products in Canada, the United Kingdom, and around the world. Shares of Saputo have plunged 18% in 2023. The food stock is down 11% year over year.
This company is set to release its Q1 fiscal 2024 earnings on the morning of Friday, August 11. In fiscal 2023, Saputo reported revenues of $17.8 billion — up from $15.0 billion in the prior year. Meanwhile, adjusted EBITDA rose to $1.55 billion compared to $1.15 billion in fiscal 2022.
Shares of this food stock last had a favourable P/E ratio of 18. Saputo offers a quarterly dividend of $0.18 per share, representing a 2.6% yield.
The post The Best Canadian Food Stocks August 2023 appeared first on The Motley Fool Canada .
Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .
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