Food stocks are usually considered to be defensive stocks. However, that is not always the case. Not all food businesses were insensitive to the effects of the pandemic. While people need to eat cereal, consume meat, and drink beverages, restaurants and other establishments were having a tough time. If restaurants start shutting down, then it also has an effect on businesses that supply materials to restaurants. One of the largest distributors of food supplies and kitchen equipment is Sysco Corporation. It caters to more than half a million clients that cover industries like education, healthcare, and hospitality. Having a well-diversified client base certainly helps weather a black swan event like a pandemic. So, if you are looking to invest in the best food company stocks, then Sysco Corporation could be an option to look at.
Third-Quarter 2021 Earnings Numbers Point To Optimism
On 4th May 2021, Sysco announced its third-quarter 2021 earnings results. The total revenue was down from $13.7 billion to $11.8 billion. However, operating expenses reduced significantly from around $2.5 billion to $1.9 billion. That had a direct impact on the bottom line. A net loss of $3.2 million in Q32020 turned into a net profit of about $89 million. Earnings per share on a diluted basis also turned from a loss of $0.01 per share to a net profit of $0.17 per share. Company CEO Kevin Hourican said that the industry was now in a recovery phase following a difficult 2020 due to the pandemic. He also said that there is significant pent-up demand in the restaurant sector as people are eager to eat out again once the restrictions are lifted. The overall mood seemed to be one that was forward-looking. Therefore, now may be a good time to start looking at food stocks for 2021.
Best Food Company Stocks
Sysco Corporation operates over 320 distribution centers worldwide. In the fiscal year 2020, the company generated sales of $52 billion. The company’s stock closed at $73.92 on 6th August 2021.
