In this article, we will discuss 10 best plant-based companies to invest in. If you want to skip reading about the growth of the plant-based market and the major catalysts driving the growth, you can go directly to 5 Best Plant Based Companies to Invest In.
As individuals become conscious of the health and wildlife detriments of consuming too many animal products, plant-based foods are becoming a healthier and environmentally friendly lifestyle choice. According to data by the Plant Based Foods Association, U.S. retail sales of plant-based foods went up by 6.2% in 2021, bringing the valuation of the plant-based market to a record high of $7.4 billion, up from $6.9 billion in 2020. The data further highlights that 62% of Americans were buying plant-based products in 2021, up from 61% in 2020.
Plant-Based Food Market Analysis
According to a report by Allied Market Research, the global vegan food market was worth $19.7 billion in 2020 and is expected to grow to $36.3 billion by 2030 at a compound annual growth rate of 6.4 % over the forecasted period. The regions part of the study were North America, Europe, Asia-Pacific, and LAMEA, of which Europe was identified as the largest market of plant-based meat alternatives in the world. The report further highlighted that according to estimates by the World Health Organization, 30% to 70% of Europeans were overweight. The United Kingdom was the largest market of alternative meats in Europe and also had the highest level of obesity, followed by other countries in Western Europe such as Germany and France. The rising demand for alternative meats and plant-based proteins is one of the major factors driving the growth of the plant-based food market in Europe.
Activities in The Plant-Based Space
In 2018, Unilever plc (NYSE:UL) acquired The Vegetarian Butcher, a Netherlands-based alternative meat company. In June 2021, meat giant Tyson Foods, Inc. (NYSE:TSN) revealed its first plant-based brand, First Pride, under which the company showcased a suite of organic products for retail markets and e-Commerce across the Asia Pacific.
Last November, Danone S.A. announced plans for investing approximately 43 million euros in 2022 to convert its dairy site in southern France into a production plant of oat-based drinks for Alpro, its plant-based brand. In November 2021, popular plant-based start-up Impossible Foods, Inc. was reported to have raised $500 million in funding, bringing its total funding up to $2 billion, and its valuation to $7 billion. According to data from Agfunder, Impossible Foods, Inc. is planning on going public in 2022, at a valuation of more than $10 billion through an IPO or SPAC merger.
Several factors are driving the growth of the plant-based industry and valuations of plant-based companies including the rising popularity of alternative meats, innovations in the industry, and mergers and acquisitions of private equities. Some of the best plant-based companies to invest in include Archer Daniels Midland Company (NYSE:ADM), Tyson Foods, Inc. (NYSE:TSN), and Kellogg Company (NYSE:K).
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Our Methodology
To determine the 10 best plant-based companies to invest in, we identified the major players in the industry by going through market reports and industry news. We looked at each company’s financial statements and its past performance of up to twelve months. We further took into account the analyst and investor sentiment for each company. We narrowed down our selection to companies that had positive investor sentiment, strong financials, and exhibited growth potential pointed out by expert financial analysts.
Best Plant Based Companies to Invest In
10. Beyond Meat, Inc. (NASDAQ:BYND)
Number of Hedge Fund Holders: 19
Beyond Meat, Inc. (NASDAQ:BYND) manufactures, markets, and sells plant-based meat products in the United States and internationally. The company sells a range of plant-based meat products across the platforms of beef, pork, and poultry.
Even though Beyond Meat, Inc. (NASDAQ:BYND) dipped in 2021 due to supply chain constraints and the delta variant, analysts are bullish on the stock for 2022. On January 31, 2022, Barclays analyst Benjamin Theurer upgraded Beyond Meat, Inc. (NASDAQ:BYND) to Overweight from Underweight with a price target of $80, up from $70. The analyst commented that the company’s growth potential in the U.S. foodservice channel and international markets is understated and poorly reflected in current valuations. The analyst notes that Beyond Meat, Inc. (NASDAQ:BYND) exhibits significant growth potential and is paving the path to lead the alternative meat market amidst rising competition in the sector.
This April, Beyond Meat, Inc. (NASDAQ:BYND) introduced the plant-based Beyond Burger and Beyond Meatballs at about 2,000 stores nationwide. On March 30, 2022, UBS analyst Cody Ross initiated coverage of Beyond Meat, Inc. (NASDAQ:BYND) with a Neutral rating and a $48 price target.
Beyond Meat, Inc. (NASDAQ:BYND) is rising in popularity among elite hedge funds. According to Insider Monkey’s database, 19 hedge funds held long positions in the company at the end of the fourth quarter of 2021. The total stakes of these funds equaled $120.24 million, up from $114.04 million in the third quarter of 2021 with 16 positions. The hedge fund sentiment for the stock is positive.
Singular Research mentioned Beyond Meat, Inc. (NASDAQ:BYND) in its third-quarter 2021 investor letter. Here’s what the firm had to say:
“BYND also was a low performer as the company warned of lower sales in the third quarter due to the delta variant and supply chain disruptions. The firm was also downgraded by Credit Suisse to Underperform from Neutral.”
9. Nomad Foods Limited (NYSE:NOMD)
Number of Hedge Fund Holders: 23
Nomad Foods Limited (NYSE:NOMD) is a leading European frozen food company offering a wide range of plant-based foods in the United Kingdom, Italy, Germany, France, Sweden, Austria, Norway, Spain, and the rest of Europe. This February, the company reported that its earnings per share for the fiscal fourth quarter came to $0.37, beating estimates by $0.01. Nomad Foods Limited (NYSE:NOMD) reported quarterly revenues of $789.15 million.
On March 30, 2022, UBS analyst Cody Ross initiated coverage of Nomad Foods Limited (NYSE:NOMD) with a Buy rating and a $26 price target. The analyst sees growth potential for the stock and expects it to benefit from surging inflation. The analyst noted Nomad Foods Limited (NYSE:NOMD) underperformed when Russia invaded Ukraine in fear of restrictions on Russian fish imports, however, these represent a mere 6% of the company’s cost-of-goods-sold.
By the end of the fourth quarter of 2021, 23 hedge funds held stakes in Nomad Foods Limited (NYSE:NOMD) worth over $293.82 million. Of these, the majority stakes were held by Renaissance Technologies making it the most prominent shareholder in Nomad Foods Limited (NYSE:NOMD). As of December 31, 2021, Renaissance Technologies owns more than 4.4 million shares of the stock which amounts to a stake value of $112.58 million.
Like Archer Daniels Midland Company (NYSE:ADM), Tyson Foods, Inc. (NYSE:TSN), and Kellogg Company (NYSE:K), Nomad Foods Limited (NYSE:NOMD) is a key player in the plant-based food industry.
8. Conagra Brands, Inc. (NYSE:CAG)
Number of Hedge Fund Holders: 25
Conagra Brands, Inc. (NYSE:CAG) is a Chicago-based consumer packaged goods company that sells products under various brand names to supermarkets, restaurants, and foodservice establishments. The company’s plant-based brands include Gardein, Duncan Hines, Healthy Choice, and Slim Jim, among others. This January, Morgan Stanley analyst Pamela Kaufman raised her price target on Conagra Brands, Inc. (NYSE:CAG) to $36 from $35 and maintained an Equal Weight rating on the shares.
This April, Conagra Brands, Inc. (NYSE:CAG) released its earnings for the fiscal third quarter of 2022. According to the company’s earnings report, Conagra Brands, Inc. (NYSE:CAG) reported earnings per share of $0.58 and generated quarterly revenues of $2.91 billion, up 5.15% year over year from $2.77 billion. As of April 7, 2022, the stock is up by 2.11% and the company boasts a market cap of $16.52 billion.
By the end of the fourth quarter of 2021, Conagra Brands, Inc. (NYSE:CAG) was spotted on 25 hedge fund portfolios that held collective stakes of $649.65 million in the company. This is compared to 20 positions in Q3 2021, with stakes worth $625.32 million. The hedge fund sentiment for the stock is positive.
As of December 31, 2021, JANA Partners is the largest shareholder in Conagra Brands, Inc. (NYSE:CAG) owning over 8 million shares of the stock. The fund’s stakes in the company were valued at $274.94 million, which represents 17.77% of JANA Partners’ Q4 2021 investment portfolio.
7. Ingredion Incorporated (NYSE:INGR)
Number of Hedge Fund Holders: 25
Ingredion Incorporated (NYSE:INGR) is an American multinational ingredient provider having a diverse portfolio of plant-based ingredients for manufacturers to add to their recipe formulations. Last November, Barclays analyst Benjamin Theurer initiated coverage of Ingredion Incorporated (NYSE:INGR) with an Overweight rating and a $115 price target. The analyst commented that he sees a potential upside to the stock as specialty product sales grow and plant-based meat diets become more popular.
As of April 7, 2022, Ingredion Incorporated (NYSE:INGR) boasts a market capitalization of $5.88 billion, has a forward dividend yield of 2.92%, and a trailing-twelve-month price-to-earnings ratio of 51.08.
On February 3, 2022, Ingredion Incorporated (NYSE:INGR) reported its earnings for the fiscal fourth quarter of 2021 in which the company beat revenue estimates. The company reported earnings per share of $1.09 and generated quarterly revenues amounting to $1.76 billion. The company’s quarterly revenues saw gains of 10.17% year over year and the company outperformed market consensus by $30.62 million. Ingredion Incorporated (NYSE:INGR) reported annual revenues of $6.9 billion for the fiscal year 2021. The company’s net sales grew by 15%, reflecting over $600 million of price mix improvement. Moreover, the company expects operating income growth for 2022 to lie between 7% to 9%.
By the end of the fourth quarter of 2021, 25 hedge funds were bullish on Ingredion Incorporated (NYSE:INGR) having stakes of $404.52 million in the company. This is compared to 20 positions in the preceding quarter, with collective stakes of $391.79 million. As of December 31, 2021, Yacktman Asset Management is the top shareholder in the company, having stakes of more than $254.43 million.
6. The Hain Celestial Group, Inc. (NASDAQ:HAIN)
Number of Hedge Fund Holders: 26
The Hain Celestial Group, Inc. (NASDAQ:HAIN) manufactures, markets, and sells organic and natural products in the United States, the United Kingdom, and internationally. The stock is becoming popular among investor circles. Insider Monkey’s data shows 26 hedge funds were long The Hain Celestial Group, Inc. (NASDAQ:HAIN) by the end of the fourth quarter of 2021, having stakes of more than $377.4 million in the company.
This January, Mizuho analyst John Baumgartner initiated coverage of The Hain Celestial Group, Inc. (NASDAQ:HAIN) with a Buy rating and a $47 price target. The analyst cites that the company is a key player in the plant-based food industry and should grow annual sales at a 6% rate through 2025.
On February 3, 2022, The Hain Celestial Group, Inc. (NASDAQ:HAIN) reported earnings for the fiscal second quarter of 2021 in which it beat EPS estimates by $0.03. According to the company’s earnings report, The Hain Celestial Group, Inc. (NASDAQ:HAIN) generated quarterly revenues of $476.94 million and the company’s earnings per share was $0.36.
Engaged Capital is the most prominent shareholder in The Hain Celestial Group, Inc. (NASDAQ:HAIN), having stakes worth $79.55 million in the company.
Investors are bullish on The Hain Celestial Group, Inc. (NASDAQ:HAIN). Other plant-based stocks that are among the top picks of elite hedge funds include Archer Daniels Midland Company (NYSE:ADM), Tyson Foods, Inc. (NYSE:TSN), and Kellogg Company (NYSE:K).
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Disclosure: None. 10 Best Plant Based Companies to Invest In is originally published on Insider Monkey.
