7 Best Beef Stocks to Buy Now

2. US Foods Holding Corp. (NYSE:USFD)

Number of Hedge Funds Holders:52

US Foods Holding Corp. (NYSE:USFD), along with its subsidiaries, is engaged in the sales, marketing, and distribution of fresh, frozen, and dry beef products to foodservice customers in the United States. The company’s customers include independently owned restaurants, national restaurant chains, nursing homes, and hotels. Based in Illinois, US Foods also serves government agencies, military organizations, and retailers.

The company recently announced the plan to expand its Stock Yards operations to 220,000-square foot space at Lexington in North Carolina. Stock Yards is the company’s exclusive brand that deals in steaks, chops, and other premium meats.

US Foods Holding Corp. (NYSE:USFD) recorded sales of $9.7 billion for the second quarter of 2024. This represents a 7.7% increase over the second quarter of the previous year. This growth was mainly driven by an increase in total case volume and food inflation of 2.9%. The total case volume increased by 5.2% YoY, driven by a 6% increase in healthcare volume and a 5.7% increase in independent restaurant case volume.

It also reported a gross profit of $1.7 billion for the second quarter of 2024. It increased by $115 million from the previous year due to the increase in total case volume, pricing optimization, and the improved cost of goods sold. However, the company’s operating expenses rose by $84 million from the prior year due to higher total case volume, increased distribution costs, and increased labor costs. US Foods Holding Corp. (NYSE:USFD) reported an adjusted EBITDA of $489 million, 13.2% higher than the prior year.

However, the company had $4.43 billion in debt as of December 2023. Investors should closely monitor whether the company can manage its debt effectively while continuing to deliver growth. Furthermore, its share price saw a downtick of 4.6% in the three months preceding August 2024, which could be attributed to concerning debt position and high operating-expenses-to-revenue ratio.

Nevertheless, in 2024, US Foods Holding Corp. (NYSE:USFD) completed the acquisition of IWC Food Services, a broad line distributor serving the Nashville area. Additionally, the company has outlined a financial strategy for 2025 through 2027, which includes growing sales at 5% CAGR and increasing adjusted EBITDA at a CAGR of 10%.

Given the company’s expansion plans and decent profitability (its EPS is on a par with the industry average of 11%), its share price has appreciated by 30% in the year so far. Also, 52 hedge funds have invested $2.6 billion in the company as of Q2 2024.