In this article, we will look at the 12 Best Pizza Stocks to Buy According to Hedge Funds.
Overview of the Pizza and Frozen Pizza Market
Pizza is one of the most popular foods in North America. According to the Global Pizza Analysis Report 2024 released by Research and Markets, the global pizza market size was valued at around $148.6 billion in 2023. It is expected to reach $222.5 billion by 2032, growing at a compound annual growth rate (CAGR) of 4.59% between 2023 and 2032. The primary reasons behind this growth are the shifting consumer dietary patterns influenced by rapid westernization, the increasing popularity of online pizza ordering platforms, and the introduction and popularization of healthier product variants, such as gluten-free, vegan, and low-calorie pizza options.
Pizza Today surveyed 748 pizza business owners from across the US to develop the Pizza Industry Trends Report 2024. The report showed that online ordering was becoming the most popular norm in the industry, with 24.91% of respondents investing to upgrade their online ordering technology. In addition, pizzeria owners are directing around 78% of their advertising budgets to social media apps to boost growth and prominence. Around 65% of business owners surveyed showed signs of optimism regarding their annual sales, expecting growth in the next 12 months.
Frozen pizzas are also a significant force in the industry due to their ease of availability, affordability, and convenience. According to Grand View Research, the US frozen pizza market was valued at $6.62 billion in 2022 and is anticipated to grow at a CAGR of 6.9% between 2023 and 2030. Consumers are increasingly shifting to this variety due to hectic lifestyles and other factors such as increased disposable income and a rise in the standard of living.
In addition, frozen pizzas are becoming popular because they offer the same varieties as fresh pizza options, such as cheese pizza, meat pizza, veggie pizza, and more. Gluten-free frozen pizzas are also increasing in popularity due to the growing health consciousness among consumers and the increasing prevalence of gluten allergies, celiac disease, gluten intolerance, and other health reasons. The gluten-free segment is expected to grow with the fastest CAGR among all pizza categories, increasing by 9.2% between 2023 and 2030.
Trends in the Pizza Market
Chicken dominated the toppings segment in the pizza market, with the highest share of more than 30% in 2022, according to statistics by Grand View Research. Companies offering chicken produce and toppings are benefitting from this trend. The popularity of chicken topping has also been supported by the increasing preference for healthier eating and the growth of fast-casual restaurants. However, the fastest growing segment remains to be bacon. The bacon segment is expected to grow at a CAGR of 9.5% between 2023 and 2030.
The regular/restaurant-style pizza segment dominated the market with the highest share, 55%, as of 2022. Furthermore, supermarkets and hypermarkets are the most prominent distribution channels for the pizza market. They had the highest share, more than 30%, in 2022. The primary reason behind this trend is the increasing convenience and variety offered by these channels.
With these trends in view, let’s look at the 12 best pizza stocks to buy according to hedge funds.
12 Best Pizza Stocks to Buy According to Hedge Funds
Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 30 pizza stocks. We also considered cheese and flour stocks. We then selected the top 12 stocks most popular among elite hedge funds. We sourced hedge fund data from Insider Monkey’s database. The stocks are sorted in ascending order of the number of hedge fund holders that have stakes in them as of fiscal Q3 2024.
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).
12 Best Pizza Stocks to Buy According to Hedge Funds
12. The Chef’s Warehouse, Inc. (NASDAQ:CHEF)
Hedge Fund Holders: 15
The Chef’s Warehouse, Inc., (NASDAQ:CHEF) is a specialty food product distributor. Its offerings include a range of ingredients and specialty food options, including cheeses, oils, vinegar, produce, charcuterie, and more. It also offers center-of-the-plate products such as seafood, custom-cut beef, hormone-free poultry, flour, eggs, butter, cooking oils, and other items useful for making pizzas.
The company’s net sales increased to $931.5 million in fiscal Q3 2024, 5.6% more than in fiscal Q3 2023. Demand and business trends improved sequentially throughout fiscal Q3 2024, driving profitability.
The Chef’s Warehouse, Inc.’s (NASDAQ:CHEF) operating divisions are strong across domestic and international markets. Gross profit increased 8.2% to $224.7 million in fiscal Q3 2024 compared to $207.7 million in fiscal Q3 2023. This growth was primarily driven by increased sales and price inflation. The company is also delivering continued progress in increasing relevance with its customer base with strong year-over-year growth in unique item placements.
Based on its current business trends, The Chef’s Warehouse, Inc. (NASDAQ:CHEF) estimates net sales in the range of $3.94 billion and $4.04 billion for fiscal year 2025. Analysts are of the view that high-end diners are expected to remain unaffected by a potential recession, which is why they are bullish on the stock and have a consensus Buy rating for it. It ranks 12th on our list of the 12 best pizza stocks to buy according to hedge funds.
Wasatch Micro Cap Value Strategy made the following comment about The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) in its Q3 2023 investor letter:
“The Chefs’ Warehouse, Inc. (NASDAQ:CHEF) was also a detractor. The company distributes premium specialty foods primarily to chefs who own or operate restaurants, catering services, and fine-dining establishments. While restaurant stocks have generally been weak since the end of 2021, Chefs’ stock had held up well until succumbing in the third quarter of this year due to concerns about the possibility of soft consumer spending ahead. We don’t take these concerns lightly, especially since Chefs’ management hasn’t made a compelling counterargument. But the company is valued at only about eight times EBITDA, which we consider inexpensive. And we think high-end diners will be relatively unaffected by a potential recession because eating out is an affordable luxury for them.”
11. B&G Foods, Inc. (NYSE:BGS)
Hedge Fund Holders: 15
B&G Foods, Inc. (NYSE:BGS) is an American food holdings company with a product portfolio spanning frozen foods, shelf-stable canned food, and household commodities. Its offerings include various items, including pizza crusts, seasonings, spices, frozen and canned vegetables, sauces, peppers, and tomato-based products, all of which are significant pizza ingredients.
The company is seeing a slow recovery in base business trends, consistent with the center store packaged foods industry. However, B&G Foods, Inc. (NYSE:BGS) holds the ability to capture consumer demand. Its Spices and Flavor Solutions delivered a 2.6% year-over-year growth in net sales in fiscal Q3 2024. This growth was attributed to an increased preference for proteins and fresh produce and the growing recognition of health-conscious dietary trends. With Spices and Flavor Solutions being the company’s highest-margin segment, continued momentum in this segment is expected to support both long-term profitability and revenue growth.
B&G Foods, Inc. (NYSE:BGS) thus expects to see gradual stabilization and recovery in its operations in fiscal 2025, with sequential improvement expected between the first and second halves of the year. It ranks 11th on our list.
10. Lifeway Foods, Inc. (NASDAQ:LWAY)
Hedge Fund Holders: 18
Lifeway Foods, Inc. (NASDAQ:LWAY) produces and markets probiotic-based products in the US and internationally. Its primary product is a drinkable kefir, a cultural dairy product. The company’s product categories include various European-style soft cheeses, such as farmer and white cheese. The company markets its products under the Fresh Made, Lifeway, and Glen Oaks Farms brand names.
Its net sales reached $46.1 million in fiscal Q3 2024, an increase of 12.7% of $5.2 million compared to fiscal Q3 2023. This growth was primarily volume-driven by its branded drinkable kefir. Fiscal Q3 2024 marked the company’s 20th consecutive quarter of quarterly net sales growth, reflecting five consecutive years of quarterly growth.
Lifeway Foods, Inc., (NASDAQ:LWAY) plans to continue this growth momentum. It is focusing its capital spending on three core areas: cost reductions, growth, and facility improvements. The company has the capacity and operations to support continued rapid sales growth.
With an increasing trend of customers seeking value and high-quality nutritious products at affordable prices, Lifeway Foods, Inc.’s (NASDAQ:LWAY) products are becoming more popular. It is strategically investing in its Lifeway Farmer Cheese, which is protein-rich and full of probiotics and bioavailable nutrients. Consumer demand for the company’s soft cheese products is expected to remain high due to these qualities. In fiscal Q1 2025, the company’s Farmer Cheese will, for the first time, gain mass market placement in an estimated 1,400 stores at a large national retail part.
Rewey Asset Management stated the following regarding Lifeway Foods, Inc. (NASDAQ:LWAY) in its Q3 2024 investor letter:
“Lifeway Foods, Inc. (NASDAQ:LWAY) was our top percentage gainer in the quarter, up an astounding 103%! We often write about how the power of investing in neglect is equally important to investing in low valuations, and LWAY demonstrated this point in 3Q24. We purchased LWAY in 2Q24 as shares sold off despite a strong quarter that demonstrated continued revenue growth and margin expansion, despite a slight ‘miss’ to street EPS estimates. In our view, there was nothing bad about 2Q24, other than inaccurate sell side models. On August 13th, LWAY blew away these low expectations with a strong FY3Q report, where revenues grew over 25%, surpassing $50 million in a quarter for the first time. Shares further surged on Sept 23rd, when Danone, the global dairy company that owns 23.36% of the company, made an unsolicited bid for the company at $25 per share. While we think a deal may eventually get done, we think this first offer of $25 is too low.”
9. BJ’s Restaurants, Inc. (NASDAQ:BJRI)
Hedge Fund Holders: 18
BJ’s Restaurants, Inc. (NASDAQ:BJRI) owns and operates casual dining restaurants, including BJ’s Pizza, BJ’s Restaurant and Brewery, and BJ’s Restaurant & Brewhouse. The company offers pizza, beer, appetizers, and other food items. Its original deep-dish pizza and the Pizookie dessert are popular offerings. The company owns and operates around 200 casual dining restaurants across 30 US states.
BJ’s Restaurants, Inc., (NASDAQ:BJRI) is operating from a position of relative strength. Its brands serve more than a million guests a week. The company generated annual sales of more than $1.3 billion and free cash flow from operations of more than $100 million.
The company’s operations thus show optimistic signs. Its total revenue increased to $325.7 million in fiscal Q3 2024, experiencing a 2.2% increase compared to last year. Its fiscal Q3 sales also increased by 1.7%. The company’s sales-driving initiatives grew its sales, market share, and traffic in fiscal Q3 2024. BJ’s Restaurants, Inc.’s (NASDAQ:BJRI) capital allocation strategy prioritizes high-return investments, including a mix of new restaurant growth and remodels. It opened two new restaurants in fiscal Q3 2024 and has plans to continue this growth in fiscal 2025. The company ranks ninth on our list of the 12 best pizza stocks to buy according to hedge funds.
8. Nomad Foods Limited (NYSE:NOMD)
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 more than 16 European countries.
The company is 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.
Nomad Foods Limited (NYSE:NOMD) is thus seeing improved momentum in the market and is boosting it for organic sales growth in fiscal Q4 2024 and into fiscal 2025. The company’s portfolio is growth-advantaged, and it is operating in a relatively healthy market. Volume for the Fast-Moving Consumer Goods market is growing across all major European markets year-to-date. This market environment is especially favorable for the company’s frozen foods category, which is continually outpacing the overall food industry and developing a bullish outlook for the company. Nomad Foods Limited (NYSE:NOMD) ranks eighth on our list.
7. Papa John’s International, Inc. (NASDAQ:PZZA)
Hedge Fund Holders: 24
Papa John’s International, Inc. (NASDAQ:PZZA) operates and franchises pizza delivery and carryout restaurants. It also operates dine-in and delivery restaurants under the trademark Papa John’s in international markets. The company has around 5,906 Papa John’s restaurants in operation, which comprise 648 company-owned and 5,258 franchised restaurants in 50 countries and territories.
The company has been experiencing a challenging sales trend since the first half of fiscal 2024 and expects these trends to continue in 2025. Papa John’s International, Inc.’s (NASDAQ:PZZA) global system-wide restaurant sales for fiscal Q3 2024 were around $1.2 billion, down around 3% in constant currency.
However, Papa John’s International, Inc. (NASDAQ:PZZA) is urgently working to strengthen its business in the near term and long term. It is accelerating profitable growth in its restaurant system through several key elements. These include focusing on its core product proposition, which is traditional quality pizza. It is also optimizing its menu for more impactful product offerings. In addition, the company is employing technology to boost commercial and operational efficiency. It ranks seventh on our list of the 12 best pizza stocks to buy according to hedge funds.
6. General Mills, Inc. (NYSE:GIS)
Hedge Fund Holders: 30
General Mills, Inc. (NYSE:GIS) manufactures and markets branded consumer foods. It has more than 100 brands in around 100 countries across six continents. The company’s product offerings include refrigerated and frozen dough, snacks, and more. Its dough balls, sheeted dough, parbaked crusts, and flatbread offerings make it one of the best pizza stocks to watch.
The company’s outlook on operating profit and EPS in fiscal 2025 is lower since it increased its investment to boost customer value. Given the uncertain macroeconomic backdrop for consumers, this decision is expected to strengthen the company’s offerings and position it for sustainable growth in fiscal 2026 and beyond.
General Mills, Inc. (NYSE:GIS) strengthened its competitiveness in fiscal Q2 2025, with 56% of its priority business growing or holding pound share and 38% growing or holding dollar share. Both of these reflect significant improvement compared to fiscal Q1 2025 and fiscal year 2024, highlighting its positive momentum. General Mills, Inc.’s (NYSE:GIS) long-standing record of deploying cash through capital investments, share repurchases, dividend growth, and M&A ranks it among the best pizza stocks to buy according to hedge funds.
5. Domino’s Pizza, Inc. (NYSE:DPZ)
Hedge Fund Holders: 32
Domino’s Pizza, Inc., (NYSE:DPZ) is a pizza company that operates through US stores, international franchises, and a supply chain segment. This public restaurant brand operates more than 20,500 stores in around 90 markets worldwide.
The company has steadily increased its market share in the US, going from 13.5% in 2015 to 22.9% in 2024. It opened around 1,750 stores between 2015 and 2023. In fiscal Q3 2024, Domino’s Pizza, Inc. (NYSE:DPZ) added 24 net new stores to its US portfolio, bringing its total system store count to 6,930. The company’s retail sales grew by 5.1% in the US as well. This growth was attributed to its same-store sales that came in at 3% with positive order counts for the fourth consecutive quarter as of fiscal Q3 2024. These positive results drove the company’s market share gains.
Domino’s Pizza, Inc.’s (NYSE:DPZ) international business has the potential for growth. The company is implementing various plans and strategies to create sales momentum and boost net store growth in the international market. For instance, it is focusing on aggressive promotional pricing to drive a consistent value message to value-seeking customers. It is also maximizing orders from aggregators and is diversifying its business beyond delivery to dine-in. It ranks fifth on our list.
4. Bunge Global SA (NYSE:BG)
Hedge Fund Holders: 33
Bunge Global SA (NYSE:BG) is a global agribusiness and food company. Its Milling segment operates businesses that sell wheat flour, bakery mixes, and corn-based products. Through its Refined and Specialty Oils segment, Bunge Global SA (NYSE:BG) sells vegetable oils and fats, including cooking oil, specialty ingredients, and more.
The company announced the wrapping of its deal to acquire Viterra, which would develop the company into an agribusiness giant. Apart from progressing on this transaction, the company also completed other strategic priorities in fiscal Q3 2024, such as closing the sale of its interest in its non-core sugar and bio-energy joint venture in Brazil to its partner, BP.
Year to date, the company generated around $1.3 billion of adjusted funds from operations. After allocating $295 million to sustaining capex, which includes maintenance and environmental health and safety, it had around $988 million of discretionary cash flow available. Bunge Global SA (NYSE:BG) used this money to pay dividends and invest in its growth and productivity-related capex, most of which relate to its significant multi-year greenfield investments. It also repurchased around $600 million of Bunge shares.
Bunge Global SA (NYSE:BG) thus has a strong operating model in place, and is spending significant capital to improve its facilities and operations across its global footprint. It ranks fourth on our list of the 12 best pizza stocks to buy according to hedge funds.
3. YUM! Brands, Inc. (NYSE:YUM)
Hedge Fund Holders: 34
YUM! Brands, Inc. (NYSE:YUM) operates around 58,000 restaurants in 155 countries and territories under four operating segments: Pizza Hut, KFC, Taco Bell, and The Habit Burger Grill Divisions. Its Pizza Hut concept specializes in the sale of ready-to-eat pizzas.
Although the company is facing a complex consumer environment due to the conflict in the Middle East, it grew profits by 3% year-over-year. Taco Bell US and KFC International are the two primary growth engines for the company. In fiscal Q3 2024, Taco Bell US outperformed the industry on comparable sales, and KFC International outperformed on unit growth. YUM! Brands, Inc. (NYSE:YUM) attained another milestone by surpassing 60,000 restaurants across the globe in fiscal Q3 2024. It increased its unit count by 547 units, reflecting 482 closures and 1,029 gross openings.
It added 63 units to Pizza Hut in fiscal Q3 2024, driven by 292 gross unit openings. New unit openings for the brand were led by India, China, and the United States. YUM! Brands, Inc. (NYSE:YUM) is increasing its deployment of AI-driven capabilities to drive growth. This includes consumer feedback dashboards, One Touch labor scheduling and inventory management, quality control monitoring, and AI-driven marketing. It launched AI-driven marketing campaigns in fiscal Q3 2024, increasing consumer engagement and purchases. This innovation has the potential to improve the company’s marketing return on investment and increase its visibility.
2. Tyson Foods, Inc. (NYSE:TSN)
Hedge Fund Holders: 37
Tyson Foods, Inc., (NYSE:TSN) is a food company that operates in the Beef, Chicken, Pork, and Prepared Foods segments. Its portfolio of brands includes Tyson, Jimmy Dean, Ball Park, Hillshire Farm, State Fair, Aidells, and more. The company’s primal and sub-primal meat cuts, case-ready products, and fresh and frozen chicken products can be conveniently used to make various kinds of pizzas.
The company’s performance in fiscal Q4 2024 was strong, which built momentum and significantly improved its full-year profitability. It delivered an adjusted operating income of more than $1.8 billion for fiscal year 2024, nearly double compared to fiscal year 2023. This growth was driven by the company’s performance in the chicken segment, strong results in prepared food, and improvement in the pork segment.
Tyson Foods, Inc. (NYSE:TSN) has several strategic enablers to drive its priorities and continue this momentum in 2025. It is gaining enterprise scale and modernizing its operations to boost operational excellence. It is also building on its iconic brands to boost the value of its core proteins. The company has three of the top ten brands in protein and is focusing on expanding its household penetration. It is also investing in its digital capabilities, using predictive analytics, big data, and artificial intelligence for better outcomes and decision-making. Tyson Foods, Inc. (NYSE:TSN) is accelerating digitalization in its end-to-end demand and supply planning to optimize working capital. It ranks second on our list of the best pizza stocks to buy according to hedge funds.
1. The Kraft Heinz Company (NASDAQ:KHC)
Hedge Fund Holders: 38
The Kraft Heinz Company (NASDAQ:KHC) manufactures and distributes food and beverages worldwide. Its offerings include cheese and dairy products, condiments, meats, sauces, tomato products, refreshment beverages, and more.
The last few years have proved historically challenging for the company due to a shifting macroeconomic landscape and the rise of more budget-conscious consumers looking for discounts and deals. However, despite these headwinds, The Kraft Heinz Company (NASDAQ:KHC) is generating financial efficiencies to support profitability margins. Its fiscal Q3 2024 adjusted earnings per share (EPS) grew by 4.2%, reflecting stability.
Consumer spending is benefiting from a robust economy and recent interest rate cuts by the Federal Reserve, the effects of which are prominent in the core North American market. The Kraft Heinz Company (NASDAQ:KHC) is thus expected to benefit from these trends. The company’s focus is on executing its strategic pillars to generate strong cash flow and drive profitable growth.
Analysts are bullish on the stock due to its solid 5.3% dividend yield. This rate is well above its industry group average of around 4%. This positions the company as an attractive opportunity. In addition, Warren Buffett, through Berkshire Hathaway, remains the largest shareholder of The Kraft Heinz Company (NASDAQ:KHC), holding 326 million shares. This translates to around 27% of the entire company, and reflects confidence in its long-term outlook.
Mairs & Power Growth Fund stated the following regarding The Kraft Heinz Company (NASDAQ:KHC) in its Q3 2024 investor letter:
“We added The Kraft Heinz Company (NASDAQ:KHC) to the Fund in the quarter. Kraft Heinz is a leading global food company which possesses a portfolio of iconic brands, including its eponymous ketchup brand. The company has been undergoing an operational transformation focused on driving efficiency gains in supply chain, manufacturing and distribution. These efficiency gains have fueled increased investments in technology, automation, innovation and marketing, which should ultimately drive more consistent organic revenue growth and high single digit earnings per share growth. We expect above-average long-term returns, buoyed by consistent free cash flow generation, opportunistic share repurchases and an attractive 4-5% dividend yield. A modest current valuation affords an ample margin of safety.”
Overall, KHC ranks first among the 12 best pizza stocks to buy according to hedge funds. While we acknowledge the potential of pizza 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 KHC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
