How to Buy Equity in the Beef Industry
Investing in Meat Stocks
A closer look at some meaty investment opportunties.
The average American consumes more than 220 pounds of meat each twelvemonth, or a little more than half a pound a day, the second-highest rate globally. Overall, worldwide meat consumption is ascension. By 2050, global meat consumption could top 570 million tons, double the amount in 2008.
That forecast bodes well for food companies focused on producing meat to feed the masses. Here's a closer look at the meat-focused food stocks investors could consider to potentially turn a profit from our insatiable appetite for meat.
Paradigm source: Getty Images.
Top meat stocks
While several nutrient companies focus on producing meat, the number of publicly traded options is dwindling. Here'southward a snapshot of some of the biggest meat companies traded on major stock exchanges in 2021:
| Meat stock | Ticker symbol | Market place cap | Company clarification |
|---|---|---|---|
| BRF S.A. | (NYSE:BRFS) | $3.7 billion | Brazilian producer of fresh and frozen protein products. |
| Hormel Foods | (NYSE:HRL) | $24.5 billion | Producer of meat and nutrient products. |
| Pilgrim's Pride | (NASDAQ:PPC) | $half-dozen.8 billion | Produces, processes, markets, and distributes craven products. |
| Sanderson Farms | (NASDAQ:SAFM) | $4.4 billion | Produces, processes, markets, and distributes craven products. |
| Tyson Foods | (NYSE:TSN) | $28.6 billion | Producer of processed foods, including chicken, beef, pork, and prepared foods. |
Data source: Ycharts and visitor websites. Marketplace cap as of Aug. 31, 2021.
Here's a closer look at these meat-focused consumer staples stocks .
BRF S.A.
BRF is a global food company based in Brazil. It produced 4 million tons of food in 2020 that information technology distributed to more than 117 countries. The visitor has diversified nutrient processing plants that include meat, margarine, pasta, and desserts. It has several summit-selling brands, including Qualy (the top margarine brand in Brazil), Sadia (the most valuable nutrient brand in Brazil), and Banvit (the leading poultry make in Turkey).
BRF also has a leading meat concern focused on poultry and pork. It's dominant in Brazilian exports to Asia, including 39% of the craven sent to Nippon and 27% of the pork exported to Prc. In improver to selling meat products such equally cold cuts and encased meats, BRF aims to revolutionize the pork industry in Brazil past leading the meat substitute market place. These factors make the visitor a potentially tasty manner to play the growth of meat consumption in emerging markets, along with trends like institute-based meat substitutes.
Hormel Foods
Hormel is a leading global branded nutrient company. It has 4 business segments:
- Grocery products : This category includes shelf-stable food products sold in retail markets. Notable brands include SPAM, Skippy, Herdez, and Hormel.
- Refrigerated foods : These products include branded and unbranded pork, beefiness, chicken, and turkey products sold for retail, foodservice, cafeteria, and commercial employ.
- Jennie-O Turkey Shop : This segment sells branded and unbranded turkey products for retail, foodservice, and commercial use.
- International and other : This category includes products the visitor sells internationally, forth with international joint venture and royalty arrangements.
Hormel has been slowly shifting away from being a meat-centric company. Earlier 2013, it had a retail focus on pork and turkey. However, it has transitioned beyond meat protein in recent years and is condign a global branded food company. It agreed to acquire the Planters snack nuts brand from Kraft Heinz Visitor (NASDAQ:KHC) for $3.35 billion in 2021, which will reduce its exposure to meat products to 75% of its portfolio.
Pilgrim'south Pride
Pilgrim'due south Pride is i of the earth'south largest poultry producers. The company operates poly peptide processing plants and prepared food facilities worldwide and primarily delivers its products to retailers and foodservice distributors.
Pilgrim's Pride took a significant pace to expand and diversify its meat business in 2021 past acquiring the meats and repast business of Kerry Consumer Foods. Kerry Meats is a major manufacturer of branded and private label meats, meat snacks, and to-become food products in the U.K. and Ireland, and Kerry Meals is a leading ethnic chilled and frozen-ready meals business in the U.K. The transaction enhances Pilgrim's position in the global protein market.
Information technology'due south worth noting that JBS (OTC:JBSAY), the largest meat processing company in the globe, offered to buy the rest of Pilgrim's Pride that it didn't already own in 2021. The Brazilian meatpacker initially caused its 80.2% stake in Pilgrim'due south Pride in 2009. If Pilgrim's Pride agrees to this bargain and JBS closes the transaction, investors will accept one less meat stock to consider.
Sanderson Farms
Sanderson Farms has many similarities with Pilgrim'due south Pride. The visitor is also engaged in the production, processing, marketing, and distribution of chicken. Information technology was the tertiary-largest U.Due south. poultry producer in 2020, processing more than 4.viii billion pounds of meat.
As well, similar Pilgrim'due south Pride, Sanderson Farms received a takeover offer in 2021. The poultry producer agreed to a bargain with privately held agricultural companies Cargill and Continental Grain Visitor. They plan to combine Sanderson Farms with Wayne Farms, a subsidiary of Continental Grain, to course a new, privately held poultry business. If the deal goes through, information technology could shut past the end of 2021 or early on 2022, leaving investors with fifty-fifty fewer meat stock investment opportunities.
Tyson Foods
Tyson Foods is i of the world'south largest food companies and a leader in animal-based poly peptide. The company's segments include prepared foods, beef, pork, chicken, and international/other. It has an extensive portfolio of products and brands, including Tyson, Jimmy Dean, Hillshire Subcontract, Ball Park, Wright, Aidells, IBP, and State Fair.
The company narrowed its focus on producing animal protein for homo consumption past selling its pet treat business organisation to Full general Mills (NYSE:GIS) for $one.2 billion in 2021. Information technology volition continue to supply meat ingredients for the pet treats business, which will compliment Full general Mills' existing portfolio.
In addition to animal-based protein, Tyson has expanded into plant-based products in recent years. It launched a new make for the Asia Pacific market in 2021. That follows the expansion of its Raised & Rooted plant-based poly peptide brand from the U.S. to Europe in late 2020.
Are meat stocks a skillful investment?
Demand for meat is growing, which should enable meat-focused producers to expand their profits in the coming years. That outlook is leading big food and agriculture companies to brand moves to gobble up some of the largest protein producers. However, investors still take a few tasty options if they want to invest directly in the long-term growth potential of the global meat market.
Source: https://www.fool.com/investing/stock-market/market-sectors/consumer-staples/food-stocks/meat-stocks/
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