In this article, we take a look at the 9 Best Pizza Stocks to Buy Now.
The pizza market is experiencing steady growth. IMARC Group reported in their market analysis of global Pizza market types (Vegan and Non. Vegan) that the worldwide pizza market size reached a whopping $148.6 billion in the year 2023. Looking forward, the analysts expect the market to reach a value of $222.5 billion by 2032 showcasing a compound annual growth rate of 4.45 % during the fiscal periods of 2024 to 2032.
Pizza originated in Italy and is now popular all around the world owing to its versatile taste and texture. Many factors are involved in the growth of the industry, mainly the Westernized style of living, consumers’ preference towards online food delivery, and lastly, the introduction of relatively healthy varieties like vegan, low-calorie, and gluten-free pizzas.
According to technavio’s 2024 – 2028 forecast, the frozen pizza market is projected to increase by $5.96 billion with a CAGR of 4.96% between 2023 and 2028, the high demand for frozen pizza is driven by factors such as seasonal fluctuations, consumer convenience of long-term storage time and the expansion of retail stores.
According to research, in 2019 there were more than 2,45000 pizza restaurants in the world and around 77000 in the U.S. alone. Consumer spending studies suggest that from 2004 to 2019, consumers in the U.S. spent 10 billion dollars annually on pizza delivery. However, the industry experienced vast growth after the pandemic hit in 2019 resulting in increased spending on snacks ordered by using the mobile applications of fast food chains, this trend continued in 2021 when the pizza delivery peaked at $19.8 billion. Pizza was the most ordered food across the United States and the most favored fast food among all age groups in the first quarter of 2023.
In 2022, the total number of pizza restaurants reached more than 80,000 units, an increase of 7000 units compared to the last 8 years. In 2022, the number of smaller independent restaurants was 44.6 thousand compared to 35.5 thousand chain restaurants.
Nevertheless, that same year analysts witnessed a considerable margin in the sales of pizza chain restaurants compared to sales of independent restaurants. Pizza chain sales exceeded independent units by more than $7 billion, dominating the U.S. market in 2022. Major players included Domino’s Pizza, Inc. (NYSE: DPZ), and Pizza Hut of Yum! Brands, Inc. (NYSE: YUM), and Little Caesar Enterprises Inc.
In 2022, Domino’s Pizza, Inc. (NYSE: DPZ) secured first rank based on most pizza chain distribution by number and highest annual sales figure of $8.5 billion. The Pizza Hut of Yum! Brands, Inc. (NYSE: YUM) was placed on the second spot, with a sales report of over $5.2 billion.
Pizza Industry Trends Report 2024, in this study Pizza Today, surveyed 748 pizzeria owners from across the states, the findings are that online ordering is on the rise and 24.91% of respondents are investing to improve their online ordering technology. In addition, the pizzeria owners are investing 78.21% of their advertising budget on social media apps to derive more orders.
Moreover, 65% of the business owners were optimistic that their annual sales would grow in the next 12 months, whereas 44% estimated a sales growth of 5% in 2024.
A close up shot of a pizza being freshly made in a restaurant kitchen.
Our Methodology:
Though we compiled this list primarily with a focus on choosing pizza companies that make and deliver pizza, we also included some firms from which the pizza industry procures its raw materials and ingredients, for instance, cheese, flour, and toppings. We selected the following stocks that are popular among hedge funds, the list is compiled based on hedge fund sentiment towards each stock.
To draft this list, we have assessed Insider Monkey’s database of hedge fund sentiment of 920 elite hedge funds tracked at the end of the first quarter of 2024. We arranged the stocks in ascending order of the number of hedge fund holders in each firm.
9 Best Pizza Stocks to Buy Now
9. The Chefs’ Warehouse, Inc. (NASDAQ: CHEF)
Number of Hedge Fund Holders: 16
The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) is a company based in the U.S. and is focused on serving the specific requirements of chefs who own and operate independent restaurants, fine dining, restaurant chains, hotels, and country clubs.
The company is one of the top-tier distributors of the following specialty food varieties: cheese, unique oils, cooking oil, butter, chocolate, milk, flour, cut beef, and hormone-free poultry among many other food items.
The Chefs’ Warehouse, Inc. (NASDAQ: CHEF) reported a quarterly revenue of $874.49 million in the Q1 of 2024. Moreover, the company had year-on-year revenue growth of 21.52% and reported FQ1 EPS of $0.05.
In their Q1 2024 Earnings Call Transcript May 1, 2024, Christopher Pappas discussed the following growth highlights:
‘‘A few highlights from the first quarter include 8.8% organic growth in net sales; especially — specialty sales were up 7% organically over the prior year, which was driven by unique customer growth of approximately 10.1%; placement growth of 12%; and specialty case growth of 4.6%. Organic pounds in center-of-the-plate were approximately 6.2% higher than the prior year’s first quarter. Gross profit margins increased approximately 37 basis points.”
According to Insider Monkey’s first quarter database 2024, 16 hedge funds held stakes in the company. Joe Milano’s GreenHouse Funds was the largest stakeholder with total shares valued at $93.47 million.
8. B&G Foods, Inc. (NYSE: BGS)
Number of Hedge Fund Holders: 21
B&G Foods, Inc. (NYSE: BGS) is an American food holdings company based in New Jersey. The company’s product portfolio is divided into three main segments: Shelf-stable canned food products, frozen foods, and household commodities.
The company’s product list includes pizza crusts, spices, seasonings, Mexican-style sauces, frozen and canned vegetables, peppers, and tomato-based products among other specialties.
In Q1 of 2024, the company reported net sales of $475.2 million, though had a downfall of 7.15% year-on-year, the decrease was primarily due to the selling of its Green Giant U.S. shelf-stable product line, a decline in net pricing, the impact of product mix and decrease in unit volume. EPS was $0.18 compared to $0.3 in the Q4 2023.
Gross profit was $108.9 million for the first quarter of 2024, or 22.9% of net sales in comparison to $114.2 million for the first quarter of 2023, or 22.3% of net sales. The improvements in gross profit as a percentage of net sales and adjusted gross profit as a percentage of net sales were driven by the moderation of input cost inflation, lower transportation and warehousing costs, and lower depreciation expense.
Moreover, net interest expense dropped by $1.6 million, or 4.1% from $39.4 million in the first quarter of 2023 to $37.8 million in the first quarter of 2024. The decline was mainly attributed to lower average outstanding long-term debt and accelerated amortization of deferred debt financing costs from long-term debt prepayments in the first quarter of 2023.
The average analyst rating for B&G foods stock from 4 stock analysts is “hold”. On May 16, 2024, Micheal Lavery, an analyst from Piper Sandler firm changed the rating on the stock from ‘Sell’ to ‘Hold’, while maintaining a price target of $9. He noted that after a slide in the share price, the stock reflects better the firm’s downside risks.
Piper Sandler raised the firm’s price target on B&G Foods to $9 from $8 and kept an Underweight rating on the shares. The firm notes the company reported slightly better-than-expected Q4 results, beating Piper’s estimates on revenues and adjusted EBITDA.
According to Insider Monkey’s Q1 2024 database, 21 hedge funds were invested in the company, and Balyasny Asset Management fund had the highest share value of $11.9 million invested in B&G Foods, Inc. (NYSE: BGS).
7. Papa John’s Pizza, Inc. (NASDAQ: PZZA)
Number of Hedge Fund Holders: 22
Papa John’s Pizza, Inc. (NASDAQ: PZZA) is the fourth largest pizza delivery company in terms of the number of restaurant chains and popularity. The company operates delivery and dine-in restaurants under the trademark of Papa John’s.
The pizza giant, in its income statement of Q1 2024, reported a revenue of $513.92 million, down 2% year over year. It was largely driven by lower revenues in North America’s commissary segment due to commodity price declines.
Despite these challenges, the company managed to launch 8 new units, on track to achieve North America’s net unit growth of more than 20% relative to 2023 net unit openings. A net increase in revenues of about $10 million somewhat offset these declines, which could be attributed to the stores that made up the UK franchisee acquisitions.
Net income in Q1 2024 was $14.64 million down 43.8% QoQ, attributed to the commodity price decline discussed above. Moreover, Papa John’s reported an EPS of $0.67 in Q1 2024, beating the estimated $0.57.
According to Insider Monkey’s database of the first quarter of 2024, 22 hedge funds were bullish on Papa John’s Pizza, Inc. (NASDAQ: PZZA) and Citadel Investment Group managed by Ken Griffin had the highest stake valued at $154.39 million, highlighting a quarter over quarter growth of 87%.
6. Bunge Global SA, Inc. (NYSE: BG)
Number of Hedge Fund Holders: 30
Bunge Global SA, Inc. (NYSE: BG) is an agribusiness and food company that operates through four main segments; Milling, Agribusiness, refined and specialty oils, sugar, and bioenergy. The firm provides raw materials such as flour to process pizza, it also sells bulk oils and fats to restaurant chains.
The company showed a net income of $244 million in Q1, 2024 compared to Q4, 2023 net income of $616 million and an adjusted net income per share of $3.07 compared to $3.26 in the previous quarter. The net income was reduced due to the weaker sales performance of two core segments; the Agribusiness and refined and specialty oils segment.
The 9 analysts with 12-month price forecasts for Bunge stock have an average price target of $121, an upside of 12.44%.
Bunge’s strategic divestment and value metrics are among the criteria that have led Adam Samuelson, a Goldman Sachs stock analyst, to give a “Buy” rating. The successful monetization of non-core assets by Bunge is demonstrated by the sale of its remaining 50% share to BP for a large amount in the joint venture BP Bunge Bioenergia.
Samuelson views this action as a strategic win, citing Bunge’s ability to concentrate on its primary business successfully and the possibility of a more efficient operation following the transaction.
According to Insider Monkey’s first quarter database of 2024, 30 hedge funds were invested in Bunge Global SA, Inc. (NYSE: BG).
5. YUM! Brands, Inc. (NYSE: YUM)
Number of Hedge Fund Holders: 35
Yum! Brands, Inc. (NYSE: YUM), is a popular American multinational corporation that together with its subsidiaries, develops and operates quick-service restaurant chains across different countries.
The company operates different restaurant brands flourishing in the fast food industry, such as Pizza Hut, KFC, The Habit Burger Grill, and Taco Bell.
The company’s income statement for Q1, 2024 reported an EPS of $1.15, and a revenue of $1.59 billion down by 2.86% on a year-on-year basis, attributed to the 2% and 8% respective decline in system sales and same-store sales on The Habit Burger Grill division. Although the other divisions underperformed, the Taco Bell division’s year-on-year revenue grew by 4.5% from $572 million to $598 million in Q1, 2024.
According to Insider Monkey’s first quarter database 2024, 35 hedge funds were bullish on Yum! Brands, Inc. (NYSE: YUM) and William Von Mueffling’s Cantillon Capital Management fund is the largest stakeholder of the firm, with 1.45 million shares held in Q1 worth $200.67 million.