We recently published a list of 10 High Growth Food Stocks to Buy. In this article, we are going to take a look at where Pilgrim’s Pride Corporation (NASDAQ:PPC) stands against other high growth food stocks to buy.
The global food industry has always stimulated economic growth, innovation, and a shift in consumer trends. It is projected to reach $2.2 trillion by 2032 from its market size of $1.64 trillion in 2022, at a compound annual growth rate (CAGR) of 2.99%, according to Market Research Future. Despite food being a necessity, the business dynamics within the food industry are very complex and companies must be adaptable as they navigate the complexities of rising production costs, changing consumer preferences, and global supply chain disruptions.
Within the industry, inflation remains a key topic. While it was soaring in 2022, food prices have since declined. However, they are on the rise again, causing financial strain on both consumers and businesses. As reported by the U.S. Department of Agriculture (USDA) in December 2024, grocery prices went up by 1.8% compared to the previous year, and food-away-from-home costs increased to 3.6%. Especially staple food items, including eggs and beef, had a sharp rise due to the avian flu wave and the supply limitations. These price fluctuations create a challenge for food companies, which must adjust their pricing strategies without sacrificing demand or alienating customers.
On the other hand, consumer behavior is also changing, putting forth factors like health, sustainability, and convenience. Thus, specialty stores have seen an increase in the demand for fresh and raw food. At the same time, budget-conscious shoppers are gravitating toward discount retailers, highlighting the growing importance of affordability. Thus, food companies must meet diverse consumer needs driven by the dual trend of seeking premium and value-oriented products.
Furthermore, technological breakthroughs are also contributing to the industry’s transformation. Supply chain optimization, waste reduction, and increased production efficiency are being greatly aided by automation and artificial intelligence (AI). Moreover, robotics is deployed in food processing to increase production and efficiency, while AI-driven demand forecasting helps avoid inventory problems. Consumers’ growing need for convenience is being met by the usage of digital ordering and delivery platforms, which opens new avenues for revenue growth. By adopting these technologies, companies are keen to improve operations and take advantage of growth opportunities in a market that is constantly evolving.
Even with economic instability, the future of the food industry is promising, driven by global population growth, urbanization, and the expanding middle class in emerging markets. In addition, new investment opportunities are being created by the popularity of plant-based meals and alternative proteins. Thus, big industry players are prioritizing the integration of technology, sustainability, and innovation in their business model to capitalize on future growth potential.
Many stocks stand out for their capacity to capitalize on this growth potential.
Methodology
To curate our list of the 10 High Growth Food Stocks to Buy, we used Finviz stock screener to gather stocks within the food sector with a strong market capitalization. We then narrowed the list based on each company’s five-year compound annual growth rate (CAGR) to identify those demonstrating consistent revenue expansion.
Furthermore, we also considered the number of hedge funds holding stakes in each stock, using data from Insider Monkey’s hedge fund database, which tracks the activity of 1,009 hedge funds.
Why are we interested in the stocks that hedge funds pile into? 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A worker taking out freshly made packaged food products from a production line.
Pilgrim’s Pride Corporation (NASDAQ:PPC)
Number of Hedge Funds Holders: 25
5-year Revenue CAGR: 10.22%
Pilgrim’s Pride Corporation (NASDAQ:PPC) is known globally in the protein industry. It provides a diverse range of fresh, frozen, and value-added chicken and pork products across the U.S., Europe, and Mexico. The company serves retailers, food service operators, and international markets through its portfolio of well-known brands, such as Pilgrim’s, Just BARE, and Moy Park, establishing a broad and reliable presence in the food industry.
In Q4 2024, Pilgrim’s Pride Corporation (NASDAQ:PPC) reported strong financial results with net revenues of $4.4 billion and adjusted EBITDA of $526 million, reflecting a 12% margin. Furthermore, revenues for the full year totaled $17.9 billion, while adjusted EBITDA stood at $2.2 billion with a slightly higher margin of 12.4%.
Key sectors experienced significant growth, including the U.S. Fresh portfolio, which was driven by consistent pricing and operational efficiencies in Big Bird and continued expansion in Case Ready and Small Bird. Prepared foods were also in higher demand in retail and food service, while European operations improved through manufacturing optimization. Moreover, fresh and prepared foods were in higher demand in Mexico.
Thus, Pilgrim’s Pride Corporation (NASDAQ:PPC) is showing positive industry trends. Looking ahead, the USDA reports a 2.5% increase in the U.S. ready-to-cook chicken production in Q4, driven by higher sector headcounts.
Despite hatchability issues, poultry demand continues to rise, particularly as beef availability decreases, making chicken the preferred protein. The food service industry experienced consistent growth, with increased sales in both commercial and non-commercial channels.
With no immediate debt maturities, Pilgrim’s Pride Corporation (NASDAQ:PPC) has demonstrated disciplined capital allocation and is well-positioned for further growth. For 2025, the company plans to allocate between $450 million and $500 million for capital expenditures, demonstrating its commitment to long-term expansion. Accordingly, Pilgrim’s Pride Corporation (NASDAQ:PPC)’s investor confidence remains high, with 25 hedge funds holding stakes in the company, as of Q4 2024. This points toward the company’s commitment to efficiency, sustainability, and product innovation, which has allowed it to maintain its position as a global protein market leader.
Overall, PPC ranks 7th on our list of high growth food stocks to buy. While we acknowledge the potential of PC as an investment, our conviction lies in the belief that certain 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 PPC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.