{"id":218830,"date":"2021-03-30T15:45:02","date_gmt":"2021-03-30T19:45:02","guid":{"rendered":"https:\/\/stockchase.com\/discover\/?p=218830"},"modified":"2021-03-30T15:45:02","modified_gmt":"2021-03-30T19:45:02","slug":"3-uplifting-food-stocks","status":"publish","type":"post","link":"https:\/\/stockchase.com\/discover\/3-uplifting-food-stocks\/","title":{"rendered":"Wine and Pizza: 3 Uplifting Food Stocks"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Discover What&#039;s Inside<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/stockchase.com\/discover\/3-uplifting-food-stocks\/#Food_Stocks\" >Food Stocks<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/stockchase.com\/discover\/3-uplifting-food-stocks\/#Andrew_Peller_Limited_ADWA-T\" >Andrew Peller Limited (ADW.A-T)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/stockchase.com\/discover\/3-uplifting-food-stocks\/#Dominos_Pizza_vs_Pizza_Pizza\" >Domino&#8217;s Pizza vs. Pizza Pizza<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 align=\"LEFT\"><span class=\"ez-toc-section\" id=\"Food_Stocks\"><\/span>Food Stocks<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p align=\"LEFT\">Spring and reopenings are underway, which means patios, picnics and a tailwind for food stocks. Ever since <a href=\"https:\/\/stockchase.com\/company\/view\/951\/PFE-N\">Pfizer<\/a> announced the efficacy of its Covid vaccine last November reopening stocks have soared. Airlines, hotels and resorts have taken off, perhaps getting ahead of themselves in the current rotation.<\/p>\n<p align=\"LEFT\">With the U.S. now vaccinating 1% of its population each day (Canada lags shamefull behind), the reopening in America is no longer a question. It will coincide with warm weather which will likely reduce the number of Covid cases further. Of course, variants, particularly the U.K., remain a threat, so people must remain vigilant in their masks.<\/p>\n<p align=\"LEFT\">However, markets have focussed on the obvious reopening plays. People will dine out or invite friends over for a BBQ before they hop a plane or take a cruise. Food stocks have been overlooked and the smaller reopening plays have been lost in the chase for <a href=\"https:\/\/stockchase.com\/company\/view\/226\/CCL-N\">Carnival<\/a> or <a href=\"https:\/\/stockchase.com\/company\/view\/2705\/MAR-Q\">Marriott<\/a> shares. What follows are some names flying below the radar:<\/p>\n<p align=\"LEFT\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-175924\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2020\/06\/ADW.A-T-1-760x254.jpg\" alt=\"ADW.A-T stock chart\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Andrew_Peller_Limited_ADWA-T\"><\/span><a href=\"https:\/\/stockchase.com\/company\/view\/26\/ADWA-T\">Andrew Peller Limited (ADW.A-T)<\/a><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img alt=\"ADW.A-T stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/ADW.A-T\/chart?labels=tru\" width=\"125\" align=\"right\" \/> It may be time to uncork this Niagara winery after a flat three years, tumbling from $18.14 in early March 2018 to the current $11. Peller is a growth-by-acquisition story, but things have settled down on that front and the company is more stable, despite the pandemic which challenged the entire drinking industry.<\/p>\n<p align=\"LEFT\"><a href=\"https:\/\/stockchase.com\/company\/view\/26\/ADWA-T\">ADW.A<\/a> has recovered from a March 2020 Covid trough of $7.02, posting an over 50% comeback. Before Valentine&#8217;s Day this year, Peller reported its sales were up 9.3% in Q3 and 4.6% year-to-date, aided by a new e-commerce portal that helped offset pandemic hit of as restaurant and bar closures. Also, ADW.A stock&#8217;s EBITA rose 18.1% YTD. However, for the three months ending 2020, gross margin as a percentage of sales was 37.4% compared to 41.3% the year before. Reasons included higher imported wine costs and customers tippling more lower-margin vintages. ADW did reduce its ad spend and trim staff in response to Covid.<\/p>\n<p align=\"LEFT\">There&#8217;s room to grow here as reopening of restaurants, bars, but also weddings, is expected to drive sales for this food stock. ADW.A stock currently trades at a 14.56x PE, which is cheap compared to <a href=\"https:\/\/stockchase.com\/company\/view\/235\/CSWB-T\">Corby<\/a>&#8216;s 15.79x and Diego&#8217;s 62.6x.<\/p>\n<p align=\"LEFT\">A few caveats: Peller averages only 30,000 shares traded a day, and there&#8217;s scant market coverage of this small cap food stock, though the average price target is $16.25, or 57% upside.<\/p>\n<p align=\"LEFT\"><img decoding=\"async\" class=\"alignnone size-medium wp-image-218983\" src=\"https:\/\/stockchase.com\/discover\/wp-content\/uploads\/2021\/03\/DPZ-N-vs-PZA-T-1-760x254.png\" alt=\"DPZ N vs PZA T\" width=\"860\" \/><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Dominos_Pizza_vs_Pizza_Pizza\"><\/span>Domino&#8217;s Pizza vs. Pizza Pizza<span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p align=\"LEFT\">Stockchase readers can pair a glass of Peller red with a slice of pizza. However, will the reopening take a bite out of pizza revenues? Like <a href=\"https:\/\/stockchase.com\/expert\/view\/1266\/Keith-Richards\">Keith Richards<\/a>, pizza will last forever. Everyone loves it as an easy snack or cheap meal, and it&#8217;s the ultimate party food to share among friends. According to <a href=\"https:\/\/www.saputofoodservice.ca\/en\/resources\/seizing-growth-opportunities-pizza-industry\" target=\"_blank\" rel=\"noopener\">Technomic&#8217;s<\/a> 2020 consumer study, 81% of consumers eat pizza at least once a month, and overall consumption has been rising since 2018. Sure, people will dine out again, but they&#8217;ll also invite friends over they haven&#8217;t seen in months for small parties and order a pizza.<\/p>\n<p align=\"LEFT\">Pizza chains are not the same, and we&#8217;re not talking taste. <img alt=\"PZA-T stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/PZA-T\/chart?labels=tru\" width=\"125\" align=\"right\" \/> <a href=\"https:\/\/stockchase.com\/company\/view\/2188\/PZA-T\">Pizza Pizza<\/a> suffers from being a Canadian chain where reopenings will take longer to roll-out than in America. Though PZA trades at only 13.65x earnings and pays a 6.29% dividend, it&#8217;s also missed two of its last four quarters and its payout ratio is 88.67%. That ratio doesn&#8217;t leave much breathing room if there&#8217;s a drop in profits. Also, PZA&#8217;s dividend has declined about 4.5% annually over the past decade.<\/p>\n<p align=\"LEFT\">In contrast, <img alt=\"DPZ-N stock price chart\" decoding=\"async\" src=\"https:\/\/data.wealthica.com\/api\/securities\/DPZ-N\/chart?labels=tru\" width=\"125\" align=\"right\" \/> <a href=\"https:\/\/stockchase.com\/company\/view\/5787\/DPZ-N\">Domino<\/a>&#8216;s benefits from scattering locations around the globe, so it&#8217;s not tied to Canada. About 17,600 stores operate in 90 countries, and the U.S. (with 6,355 locations) accounted for more than half of global sales in 2020 at US$8.3 billion compared to US$7.8 billion outside those borders. (There are 541 Domino&#8217;s in Canada.)<\/p>\n<p align=\"LEFT\">Besides geographic diversification, Domino&#8217;s relies on <a href=\"https:\/\/www.ncr.com\/blogs\/restaurants\/digital-innovations-dominos\" target=\"_blank\" rel=\"noopener\">e-commerce<\/a> to thrive. In fact, last year, over 65% of sales came from digital ordering in the U.S., according to the company&#8217;s Q2 2020 conference call. More than 90% of its international locations offer online ordering. Pizza Pizza offers an app, too, famously serving a free slice whenever the Toronto Raptors win a home game. That said, the chain still relies on walk-in sales which were limited by Canadian winter lockdowns.<\/p>\n<p align=\"LEFT\">DPZ stock&#8217;s trades at 30.23x earnings and pays a 1% dividend yield, based on a 25.18% payout ratio, far lower and safer than&#8217;s PZA stock&#8217;s.<\/p>\n<p align=\"LEFT\">Looking back, PZA stock on the TSX actually outperforms DPZ stock on the Nasdaq on a one-year (3% vs. 10%) and three-month (7.76% vs. -6.66%) basis, though Domino&#8217;s edges out PZA in the past month. This trend may continue in Domino&#8217;s favour. Indeed, at its current $373 price, Domino&#8217;s remains $102 of its one-year high, but it&#8217;s unlikely PZA will return to its lockdown high. Instead, the street targets $414.24 or 11.4% upside, based on 11 buys and 7 holds. In contrast, PZA stock is already 3% shy of its $10.74 high. Pizza Pizza is covered by only one analyst who targets $11.99 or 14.26% upside and recommends buying, but again that&#8217;s one opinion.<\/p>\n<p align=\"LEFT\">Given growth prospects and payout ratios, I&#8217;m awarding DPZ stock the victory in this battle, based on better growth and sounder fundamentals. PZA is a hold, because it will benefit from the wider reopening (though a little later in Canada), but its dividend yield may be unsafe and a cut will hurt share prices.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Food Stocks Spring and reopenings are underway, which means patios, picnics and a tailwind for food stocks. Ever since Pfizer announced the efficacy of its Covid vaccine last November reopening stocks have soared. Airlines, hotels and resorts have taken off, [&hellip;]<\/p>\n","protected":false},"author":12,"featured_media":218982,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"cwp_meta_box_check":"No","cwp_rev_product_name":"","cwp_rev_product_image":"","wppr_links":[],"cwp_rev_price":"","wppr_options":[],"wppr_pros":[],"wppr_cons":[],"footnotes":""},"categories":[17],"tags":[],"class_list":["post-218830","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lists"],"wppr_data":{"cwp_meta_box_check":"No"},"_links":{"self":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/218830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/comments?post=218830"}],"version-history":[{"count":0,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/posts\/218830\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media\/218982"}],"wp:attachment":[{"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/media?parent=218830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/categories?post=218830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockchase.com\/discover\/wp-json\/wp\/v2\/tags?post=218830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}