The Hain Celestial Group, Inc. (NASDAQ:HAIN) produces and sells a wide range of natural and organic products. It offers grocery, snack, and personal care products. It also distributes fresh prepared foods, such as sandwiches and appetizers.
The J.M. Smucker Company (NYSE:SJM)
produces and sells coffee, fruit spreads, peanut butter, oils, baking mixes, beverages, frozen sandwiches, dessert toppings, etc. Its brands include The J.M. Smucker Company (NYSE:SJM)’s, Jif, Folgers, Millstone, Crisco, Pillsbury, and others.
Whole Foods operates natural and organic foods supermarkets in the U.S., Canada, and the U.K.
The numbers
Whole Foods is a retailer, while the others are packaged food producers. So, this isn’t meant to be an apples-to-apples comparison.
| Company | PE | Fwd PE | 5-Yr PEG | Profit Margin (ttm) | ROE (ttm) | Debt/Equity (mrq) |
| WhiteWave | 28.2 | 22.4 | 1.3 | 4.5 | 10.7 | 1.0 |
| Hain Celestial | 31.3 | 25.5 | 1.8 | 6.9 | 12.6 | 0.6 |
| J.M. Smucker | 22.4 | 17.8 | 2.6 | 9.2 | 10.6 | 0.4 |
| Whole Foods | 40.1 | 32.3 | 2.2 | 4.1 | 14.6 | close to nil |
Yahoo! Finance; data to July 29
I’d pass on WhiteWave Foods Co (NYSE:WWAV) until it has a couple more quarters of operating as an independent entity under its belt. It has a low profit margin, high debt load, high beta (2.3), and high short interest. It reports quarterly earnings on August 9.
The Hain Celestial Group, Inc. (NASDAQ:HAIN) is in the right market — organic products. It posted solid results last quarter: revenue and EPS up 21% and 61%, respectively. Drawbacks include a relatively high short interest (17% of float). It reports quarterly earnings on August 19.
The J.M. Smucker Company (NYSE:SJM)’s has a nice profit margin, strong FCF (120% of reported net income), and pays a 2% dividend. While its revenue was flat last quarter, EPS were up 31%, due to good pricing power plus declining coffee bean costs. A 2.6 PEG indicates the stock is pricey. It reports quarterly earnings on August 21.
Whole Foods’ profit margins and ROE are strong for its business. Its growth continues to be solid. Last quarter’s revenue and EPS were up 13.4% and 18.8%, respectively. It reports fiscal third quarter earnings on July 31.
Sales of almond-based products are on the rise for both taste and health-related reasons. Sales of products, in general, that provide health benefits — especially organic ones — are increasing. Companies that produce and/or sell these products should benefit.
Of the companies highlighted, Whole Foods and The Hain Celestial Group, Inc. (NASDAQ:HAIN) appear the most attractive. They’re both heavily involved in organic products.
Whole Foods is king of natural and organic food retailing, and offers many products under its private label brand. The Hain Celestial Group, Inc. (NASDAQ:HAIN) offers a wide product mix.
The retail space is in the midst of the biggest paradigm shift since mail order took off at the turn of last century. Only those most forward-looking and capable companies will survive, and they’ll handsomely reward those investors who understand the landscape.
The article Profit From the Many Going Nuts Over All Things Almond originally appeared on Fool.com and is written by BA McKenna.
BA McKenna has no position in any stocks mentioned. The Motley Fool recommends Hain Celestial and Whole Foods Market. The Motley Fool owns shares of Hain Celestial, WhiteWave Foods, and Whole Foods Market. BA is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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