In this article, we will look at the 10 Best Food Stocks To Buy Under $20.
Overview of the Global Food Industry
The food industry plays a significant role in regulating the global economy, affecting agriculture and retail. Food demand is growing with an increase in the world’s population, resulting in changes in consumption patterns. According to The Business Research Company, the global food and beverages market was valued at $6.57 trillion in 2023. It is anticipated to grow at a compound annual growth rate of 5.9% between 2024 and 2028, reaching $8.81 trillion by the end of the forecast period. In 2023, Asia-Pacific was the largest region in the food and beverages market.
Technological advancements are causing significant changes in how companies in food production operate. Innovations such as robotics and AI are streamlining supply chains and improving efficiency. Recent consumer spending trends also highlight a shift towards healthier and functional foods that support overall well-being. For instance, many consumers are now looking for products that satisfy hunger and promote health benefits at the same time, such as weight management and heart health.
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Are Food Prices Expected to Cool Down?
Inflation has simmered down over the past two years, according to CNBC. Although October and November saw a slight stall, prices for items such as cars, energy, and gasoline have all cooled down. However, food prices have continued to outpace inflation, rising by 28% since 2019. According to a 2024 survey by RR Donnelley, grocery price increases have left more than 85% of consumers frustrated and disturbed. More than a third of consumers reported shifting to buying fewer items to save money. Experts believe that trends surrounding higher food prices are likely to persist. CNBC reported that Claudia Sahm, a chief economist at New Century Advisors, was of the view that food prices tend to stay up once they rise. She said:
“The inflation may come back down, so you don’t see the big price increases. But outside of widespread depression, we don’t tend to see prices falling across the board.”
While policy interventions can affect food prices, experts are skeptical of the odds of that happening. CNBC reported that Jason Miller, a professor of supply chain management at Michigan State University, was of the opinion that government policymakers can do nothing about the situation. He said this was not unique to the United States, as the problem has been experienced worldwide. At present, there isn’t much to do except wait and see how things work out in the future.
Another factor behind the looming uncertainty about the future of food prices is the current political climate and its unpredictability. However, tariffs are expected to considerably increase the prices of things, especially food. CNBC reported that Rakeen Mabud, chief economist at Groundwork Collaborative, said the following when talking about the scenario:
“Same thing with mass deportations. We have workers in this country who really prop up our food system, and when you start to really harm that workforce and send them away, that harms our entire economy.”
With these trends in view, let’s look at the 10 best food stocks to buy under $20.
A chef in a professional kitchen demonstrating ways to use the company’s products to cook healthy and functional food.
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 20 food stocks with a share price under $20. We then selected the top 10 most popular stocks among elite hedge funds as of Q3 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is sorted in ascending order of hedge fund sentiment. Please note that the share price data is as of February 14, 2025.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Food Stocks To Buy Under $20
10. Arcos Dorados Holdings Inc. (NYSE:ARCO)
Stock Price: $8.39
Number of Hedge Fund Holders: 19
Arcos Dorados Holdings Inc. (NYSE:ARCO) is a McDonald’s franchisee that operates or franchises more than 2,140 McDonald’s-branded restaurants. Its operations are divided into four geographical categories: Brazil, the Carribean, the North Latin America division (NOLAD), and the South Latin America division (SLAD). The company has been experiencing market headwinds that have affected its performance, such as currency fluctuations and changing consumer spending patterns in its key markets. Inflation-induced cost pressures on labor and raw materials have also affected its stock.
However, analysts believe that Arcos Dorados Holdings Inc.’s (NYSE:ARCO) stock provides an entry point. The company holds a competitive market edge due to its restaurant portfolio. More than half of its restaurants are free-standing units, which provide a mix of takeout, drive-thru, and delivery service options and boost restaurant sales.
On October 1, 2024, the company announced that it would exercise its option to renew its Master Franchise Agreement (MFA) with McDonald’s for another 20 years starting in 2025. This agreement has strengthened the company’s strategic footing, which stems from the geographic diversification of its solid restaurant base throughout Latin America.
Brennan Asset Management stated the following regarding Arcos Dorados Holdings Inc. (NYSE:ARCO) in its Q4 2024 investor letter:
“Arcos Dorados Holdings Inc. (NYSE:ARCO): Rough 2024…Shares Substantially Undervalued: ARCO produced solid operating results throughout 2024, but negative currency movements, including a near freefall in the Brazilian Real (over 20 percent decline), drove investors to dump ARCO shares. As we noted in our Q3 letter, ARCO announced that it renewed its master franchise agreement (MFA) with McDonald’s (MCD) at terms that were better than many anticipated. While we won’t rehash the entire ARCO thesis (see our 2023 Q2 and Q3 letters for more color), we continue to believe that ARCO is a unique asset (the license to operate essentially all MCD restaurants from Mexico south) that was turbocharged by COVID’s aftereffects. During and after COVID, a large percentage of restaurants closed and there was rapid adoption of drive-through and delivery sales. ARCO disproportionately benefited, given its larger share of free-standing stores. ARCO has a strong balance sheet (including substantial real-estate value), strong incremental returns on capital and a substantial growth opportunity. Brazil faces macro challenges, and further currency weakness is distinctly possible. That said, ARCO has a history of achieving same[1]store sale growth above inflation rates and Brazil has some of the highest delivery penetration rates and digital adaptation rates in all of LATAM. Furthermore, there is no reason for ARCO not to move its listing from New York to Sao Paulo and greatly neutralize the reporting impact from currency fluctuations. We strongly believe ARCO is mispriced at current levels.”
9. Mission Produce, Inc. (NASDAQ:AVO)
Stock Price: $11.80
Number of Hedge Fund Holders: 19
Mission Produce, Inc. (NASDAQ:AVO) specializes in farming, marketing, packing, and distributing avocados to distributors, food retailers, and produce wholesalers. Its operations are divided into three segments: Marketing and Distribution, International Farming, and Blueberries. Its Blueberries segment manages a farming operation that cultivates blueberry plants in Peru. The Company also provides merchandising and promotional support, hands-on training, and insights into market trends.
It reported a strong fiscal 2024, delivering $1.2 billion in revenue. The company’s cash flow generation painted an optimistic picture, as it delivered a $64.2 million increase in operating cash flow in fiscal 2024 versus fiscal 2023. It also generated $107.8 million in adjusted EBITDA, reflecting the strength of its business model and industry-leading position.
Mission Produce, Inc. (NASDAQ:AVO) has a strong integrated business and can seamlessly transition between regions to maintain a consistent customer supply. This gives it a competitive market edge, allowing it to deliver robust per-unit margins. Mission Produce, Inc. (NASDAQ:AVO) also boasts a comprehensive sourcing network, allowing it to maintain a reliable supply even during disruption. The company takes the ninth spot on our list of the 10 best food stocks to buy under $20.
8. The Wendy’s Company (NASDAQ:WEN)
Stock Price: $14.70
Number of Hedge Fund Holders: 21
The Wendy’s Company (NASDAQ:WEN) operates, develops, and franchises a range of quick-service restaurants. It specializes in made-to-order hamburgers, made using fresh beef available in the contiguous US, Canada, and Alaska. It also offers other signature items such as chili, salads, baked potatoes, and the Frosty dessert. The company’s operations are divided into Wendy’s U.S., Wendy’s International, and Global Real Estate & Development. The Wendy’s Company (NASDAQ:WEN) and its franchises have more than 7,000 restaurants across the globe.
Fiscal 2024 marked the company’s 14th consecutive year of global same-restaurant sales growth. Its systemwide sales rose 5.4% in fiscal Q4 2024, reaching $3.7 billion. Total revenues for the quarter were $574.3 million, and adjusted revenues were $459.3 million, an increase of 6.4%. Its adjusted EBITDA also underwent an 8.6% increase, reaching $137.5 million.
Wendy’s Company (NASDAQ:WEN) updated its capital allocation policy in the quarter, announcing a new target dividend payout ratio of 50% to 60% of adjusted earnings. The company also plans to repurchase up to $200 million of its shares in fiscal year 2025. The company’s new capital allocation policy allows it to maximize long-term shareholder value and accelerate growth. It ranks eighth on our list.
7. WK Kellogg Co. (NYSE:KLG)
Stock Price: $18.11
Number of Hedge Fund Holders: 21
WK Kellogg Co. (NYSE:KLG) is a food company that manufactures, markets, and distributes branded ready-to-eat cereal. Its product offerings promote consumer health and well-being and are diversified across the cereal sub-categories of balance, taste, and wellness. Its brand portfolio includes Frosted Flakes, Special K, Froot Loops, Raisin Bran, Rice Krispies, Corn Flakes, and others. Its subsidiaries include 1906 Foreign Trading LLC and Kashi LLC.
WK Kellogg Co. (NYSE:KLG) was spun off from Kellanova, its parent company, in 2023 to become a pure-play North American cereal manufacturer. Due to its focus, the company grew its EBITDA by 7% in fiscal year 2024, streamlining its operations in the process. The company also has a 3.2% dividend yield, making it an attractive investment.
WK Kellogg Co. (NYSE:KLG) recently launched its new marketing model and is seeing the benefits of its improved abilities through better return on investment. The company also plans to make supply chain modernization its strategic priority. It takes the seventh spot on our list of the 10 best food stocks.
6. Nomad Foods Limited (NYSE:NOMD)
Stock Price: $18.30
Number of Hedge Fund Holders: 24
Nomad Foods Limited (NYSE:NOMD) is a frozen food company. Its portfolio includes pizza, poultry, meat, fish, vegetables, and ice cream. The company sells its items under the Birds Eye, Ledo, Frikom, iglo, and Findus brands. It sells, manufactures, and distributes its products in over 16 European countries.
Nomad Foods Limited (NYSE:NOMD) is seeing improved momentum in the market and is boosting it for organic sales growth in fiscal Q4 2024 and into fiscal 2025. It is also making progress in accelerating profitable volume growth. Fiscal Q3 2024 marked its ninth consecutive quarter of organic sales growth and second consecutive quarter of volume growth. Its Must-Win Battles and Growth Platforms are yielding healthy margins, driving growth.
The company’s portfolio is growth-advantaged and operates in a relatively healthy market. Year-to-date, volume for the Fast-Moving Consumer Goods market is growing across all major European markets. This market environment is especially favorable for the company’s frozen foods category, continually outpacing the overall food industry and developing a bullish outlook.
5. Grocery Outlet Holding Corp. (NASDAQ:GO)
Stock Price: $17.27
Number of Hedge Fund Holders: 25
Grocery Outlet Holding Corp. (NASDAQ:GO) is a retailer that sells fresh food products and name-brand consumables through an elaborate network of independently operated stores. Its product offerings include fresh meat and seafood, staples, refrigerated and frozen food, staples, and other items.
The company reported a 10.4% net sales growth in fiscal Q3 2024, reaching $1.11 billion. Comparable store sales also grew by 1.2%, driven by a 2.0% increase in the number of transactions. Grocery Outlet Holding Corp. (NASDAQ:GO) opened 5 new stores in the quarter, ending fiscal Q3 2024 with 529 stores across 16 states. These positive results reflect the strong positioning of the company’s consumer offerings and the growth of its share of consumer non-discretionary spending.
While Grocery Outlet Holding Corp. (NASDAQ:GO) reported positive results, it is experiencing challenges brought about by system conversions. To combat these challenges, it is focusing on executing well on its fundamentals and has made significant progress in implementation. It ranks fifth on our list.
4. The Hain Celestial Group, Inc. (NASDAQ:HAIN)
Stock Price: $4.44
Number of Hedge Fund Holders: 25
The Hain Celestial Group, Inc. (NASDAQ:HAIN) is a prominent US-based company specializing in natural and organic foods, as well as personal-care products. It operates in over 75 countries, offering various items across snacks, baby products, beverages, meal components, and personal care. Its brand portfolio includes Terra Chips, Garden Veggie Snacks, Garden of Eatin’ snacks, Hartley’s Jelly, Joya and Natumi plant-based beverages, and others. Its customer base generally includes supermarkets, natural food stores, specialty and natural food distributors, mass-market, and club stores.
Although the company’s organic net sales dropped 7% in fiscal Q2 2025, it generated free cash flow worth $25 million and continued to make progress on its net debt, slashing it by $12 million in the quarter. Its adjusted EBITDA margin also increased 350 basis points from fiscal Q1 2025, and adjusted EBITDA reached $38 million. The Hain Celestial Group, Inc. (NASDAQ:HAIN) is thus making progress across its operations.
It drove sequential improvement in its baby & kids and meal prep domains and expects this momentum to continue in the year’s second half. The company also took steps to address supply chain challenges and marketing and promotion effectiveness, factors that caused a drop in sales growth in the quarter. The Hain Celestial Group, Inc. (NASDAQ:HAIN) ranks fourth on our list.
3. Flowers Foods, Inc. (NYSE:FLO)
Stock Price: $18.79
Number of Hedge Fund Holders: 25
Flowers Foods, Inc. (NYSE:FLO) produces and markets packaged bakery foods in the US, such as buns, breads, bagels, tortillas, English muffins, and snack items. It has an elaborate brand portfolio, including Wonder, Tastykake, Nature’s Own, Dave’s Killer Bread (DKB), and more. Its customers range from food wholesalers and restaurants to mass merchandisers, retailers, dollar stores, institutions, supermarkets, and vending companies.
The company grew its net income by 20.9% in fiscal Q4 2024 to $43.1 million, representing 3.9% of sales, a 70-basis point increase. This growth was attributed to higher operating income resulting from the optimization of its non-retail business, moderating ingredient costs, decrease in impairment of assets, and cost-saving initiatives taken by the company. Flowers Foods, Inc. (NYSE:FLO) also grew its adjusted net income by 8.7% to $46.4 million. In addition, its adjusted EBITDA rose 6.3% to $102.4 million, representing 9.2% of net sales, a 70-basis point increase.
The company’s strong execution of its portfolio strategy, investments in innovation, and solid in-store operations allowed it to improve its market standing and promote growth. Management expects continued strong execution in fiscal 2025, with first-half results anticipated to benefit from the carryover of new business wins, savings and pricing initiatives, and moderating commodity costs. For the 53-week fiscal year 2025, Flowers Foods, Inc. (NYSE:FLO) expects net sales of approximately $5.403 billion to $5.487 billion, representing 5.9% to 7.5% growth compared to the prior year.
2. Bloomin Brands, Inc. (NASDAQ:BLMN)
Stock Price: $11.21
Number of Hedge Fund Holders: 27
Bloomin’ Brands, Inc. (NASDAQ:BLMN) is a Florida-based restaurant holding company that owns four brands: Outback Steakhouse, Fleming’s Prime Steakhouse & Wine Bar, Carrabba’s Italian Grill, and Bonefish Grill. The company owns and operates more than 1,450 restaurants in 45 US states, Guam, and 13 countries, some of which are franchises. Its operations are thus divided into segments: International and US.
Bloomin’ Brands, Inc. (NASDAQ:BLMN) is undergoing a leadership transition, with Michael Spanos recently stepping in as CEO to revamp its operations. In addition, the company is in the process of franchising its Brazilian operations. The company has a strong cash position, as it ended fiscal Q3 2024 with over $83.6 million available in cash and cash equivalents. It has also been paying regular dividends to shareholders since 2015.
On November 6, Bloomin’ Brands, Inc. (NASDAQ:BLMN) entered into a Purchase Agreement with Vinci Partners to strategically re-franchise its Brazilian operations, selling a 67% stake for around $243 million. Analysts believe this move will streamline Bloomin’ Brands, Inc.’s (NASDAQ:BLMN) business and boost operational efficiency by allowing it to concentrate on its domestic market.
1. Herbalife Ltd. (NYSE:HLF)
Stock Price: $5.30
Number of Hedge Fund Holders: 32
Herbalife Ltd. (NYSE:HLF) is a global nutrition company that offers protein shakes, meal replacements such as soups and bars, high-protein snacks, teas, sports nutrition, and vitamins and supplements. It specializes in targeted nutrition, sports and fitness, energy, and weight management. Its snack portfolio comprises a range of savory, sweet, and creamy options, including snack shakes, high-protein iced coffee, soups, protein bars, and baking mixes. Herbalife Ltd. (NYSE:HLF) also manages a portfolio of dietary supplements, which includes solutions for digestive health, heart health, immunity, and more. The company sells its products in around 95 markets across the globe.
Its fiscal Q3 2024 results showed a 3.2% year-over-year drop in net sales to $1.2 billion, driven primarily by FX headwinds. Adjusted EBITDA stood at $167 million, with a margin of 13.4%, and exceeded the guidance range of $125 million to $155 million. Its reported EPS for the quarter was 57 cents, which beat expectations of 35 cents. The company is seeing substantial growth in new distributor members, a 14% increase from last year. This was the second consecutive quarter of year-over-year improvement. The surge was attributed to successful new initiatives to expand the brand’s market reach.
Strong cash generation has allowed Herbalife Ltd. (NYSE:HLF) to make significant progress in debt reduction. In fiscal Q3 2024, it had an operating cash flow of $100 million, of which $85 million was used to pay down debt, reducing the total leverage ratio to 3.3x. The move is part of the company’s overall strategy to lower its debt by $1 billion within five years.
Overall, HLF ranks first among the 10 best food stocks to buy under $20. While we acknowledge the potential of food stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HLF but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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