Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Food Processing industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Food Processing Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Food Processing Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Food Processing industry for Monday, July 22, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Food Processing industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Bunge Global SA’s Value Grade

Value Grade:

Bunge Global SA is a global agribusiness and food company. The Company conducts its operations via four segments: Agribusiness, Refined and Specialty Oils, Milling, and Sugar and Bioenergy. Its Agribusiness segment is an integrated, global business principally involved in the purchase, storage, transportation, processing and sale of agricultural commodities and commodity products. Its Agribusiness operations and assets are located in North and South America, Europe, and Asia-Pacific. The Refined and Specialty Oils segment includes businesses that sell vegetable oils and fats, including cooking oils, shortenings, specialty ingredients, and renewable diesel feedstocks. The Milling segment includes businesses that sell wheat flours, bakery mixes, and corn-based products. The Company also produces sugar and ethanol in Brazil through its 50% interest in BP Bunge Bioenergia, a joint venture with BP p.l.c (BP).

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Bunge Global SA has a Value Score of 94, which is considered to be undervalued.

When you look at Bunge Global SA’s price-to-sales ratio at 0.28 compared to the industry median at 0.92, this company has a lower price relative to revenue compared to its peers. This could make Bunge Global SA’s stock more attractive for value investors.

Bunge Global SA’s price-earnings ratio is 9.02 compared to the industry median at 21.13. This means it has a lower share price relative to earnings compared to its peers. This could make Bunge Global SA more attractive for value investors.

Now, let’s assess Bunge Global SA’s EV/EBITDA ratio, also known as enterprise multiple. At 5.3, when compared to the industry median of 11.5, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Bunge Global SA’s shareholder yield is higher than its industry median ratio of 0.00%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Bunge Global SA’s price-to-book ratio is lower than its industry median ratio of 2.09. This could make Bunge Global SA more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Bunge Global SA’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Bunge Global SA’s price-to-free-cash-flow ratio is lower than its industry median ratio of 20.71. This could make Bunge Global SA more attractive because the lower P/FCF ratio indicates that Bunge Global SA is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

First Pacific Co Ltd (ADR)’s Value Grade

Value Grade:

First Pacific Co Ltd is an investment holding company mainly engaged in the manufacturing and sale of consumer food products. Along with subsidiaries, the Company operates its business in Asia-Pacific through four segments. The Consumer Food Products segment is involved in the production and sale of consumer food products through PT Indofood Sukses Makmur Tbk (Indofood). The Telecommunications segment provides telecommunications services through PLDT Inc. The Infrastructure segment is involved in the infrastructure investment management through Metro Pacific Investments Corporation (MPIC). It is engaged in supply of electricity and water, operation of toll roads, hospital groups, railways and power plants. The Natural Resources segment is involved in the metal mining, and producing gold, copper and silver through Philex Mining Corporation (Philex). In addition, it is also engaged in integrated sugar and ethanol businesses.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

First Pacific Co Ltd (ADR) has a Value Score of 99, which is considered to be undervalued.

First Pacific Co Ltd (ADR)’s price-earnings ratio is 3.7 compared to the industry median at 21.1. This means that it has a lower price relative to its earnings compared to its peers. This makes First Pacific Co Ltd (ADR) more attractive for value investors.

First Pacific Co Ltd (ADR)’s price-to-book ratio is higher than its peers. This could make First Pacific Co Ltd (ADR) less attractive for value investors when compared to the industry median at 2.09.

You can read more about First Pacific Co Ltd (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Kraft Heinz Co’s Value Grade

Value Grade:

The Kraft Heinz Company is a global food and beverage company. The Company manufactures (and contract for the manufacture of) its products from a variety of raw materials. It purchases and uses commodities, including dairy products, meat products, tomato products, soybean and vegetable oils, sugar and other sweeteners, coffee beans, wheat and processed grains, eggs, and other fruits and vegetables to manufacture its products. In addition, the Company purchases and uses significant quantities of resins, fiberboard, metals and cardboard to package its products. The Company's geographic segments include North America and International. Its North America segment offers various brands, which include Kraft, Oscar Mayer, Heinz, Philadelphia, Lunchables, Velveeta, Ore-Ida, Capri Sun, Maxwell House, Kool-Aid and Jell-O. Its International segment offers various brands, such as Heinz, ABC, Master, Quero, Kraft, Golden Circle, Wattie’s, Pudliszki and Plasmon.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Kraft Heinz Co has a Value Score of 66, which is considered to be undervalued.

Kraft Heinz Co’s price-earnings ratio is 14.5 compared to the industry median at 21.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Kraft Heinz Co more attractive for value investors.

Kraft Heinz Co’s price-to-book ratio is higher than its peers. This could make Kraft Heinz Co less attractive for value investors when compared to the industry median at 2.09.

You can read more about Kraft Heinz Co’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Nomad Foods Ltd’s Value Grade

Value Grade:

Nomad Foods Limited is a frozen food company. The Company’s portfolio of food brands within the frozen category includes Birds Eye, Findus, iglo, Belviva, Aunt Bessie’s, Goodfella’s, and others. Its products are sold primarily through grocery retailers under the Birds Eye brand in the United Kingdom and Ireland; Findus in Italy, France, Spain, Sweden, Switzerland, and Norway; Iglo in Germany and other continental markets; La Cocinera in Spain, Ledo in south-eastern Europe, and Frikom in Serbia and North Macedonia. Its product offerings include frozen fish products, such as fish fingers, coated fish, natural fish; ready to cook vegetable products, such as peas and spinach; and frozen poultry and meat products, such as nuggets, grills, and burgers. It also includes a variety of other offerings, such as soups, pizza, bakery goods and meat substitutes. The Company manufactures, sells, and distributes a range of branded frozen food products across over 13 European countries.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Nomad Foods Ltd has a Value Score of 88, which is considered to be undervalued.

Nomad Foods Ltd’s price-earnings ratio is 15.0 compared to the industry median at 21.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Nomad Foods Ltd more attractive for value investors.

Nomad Foods Ltd’s price-to-book ratio is higher than its peers. This could make Nomad Foods Ltd less attractive for value investors when compared to the industry median at 2.09.

You can read more about Nomad Foods Ltd’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Tofutti Brands Inc’s Value Grade

Value Grade:

Tofutti Brands Inc. is engaged in the development, production and marketing of plant-based, dairy-free frozen desserts, cheeses and other food products. The Company's TOFUTTI brand products are vegan, dairy-free products that contain no butterfat, cholesterol or lactose and use soy and other vegetable proteins. The Company's dairy-free vegan cheese products include BETTER THAN CREAM CHEESE, TOFUTTI WHIPPED BETTER THAN CREAM CHEESE, BETTER THAN SOUR CREAM, TOFUTTI AMERICAN VEGAN CHEESE SLICES and BETTER THAN RICOTTA CHEESE. Its frozen desserts include TOFUTTI and TOFUTTI CUTIES. The Company sells products in the United States, including Atlanta, Baltimore, Boston, Charlotte, Chicago, Cincinnati, Cleveland, Dallas, Denver, Detroit, Houston, Jacksonville, Kansas City, Los Angeles, Miami, Milwaukee, Minneapolis, Nashville, New York, Orlando, Philadelphia, Phoenix, Portland, Richmond, Salt Lake City, San Diego, San Francisco, Seattle, St. Louis, Tampa and Washington.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Tofutti Brands Inc has a Value Score of 84, which is considered to be undervalued.

Tofutti Brands Inc’s price-to-book ratio is higher than its peers. This could make Tofutti Brands Inc less attractive for value investors when compared to the industry median at 2.09.

You can read more about Tofutti Brands Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Tyson Foods Inc’s Value Grade

Value Grade:

Tyson Foods, Inc. is a food company. The Company has a broad portfolio of products and brands, such as Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, ibp and State Fair. Its segments include beef, pork, chicken and prepared foods. Beef segment includes its operations related to processing live fed cattle and fabricating dressed beef carcasses into primal and sub-primal meat cuts and case-ready products. Pork segment includes its operations related to processing live market hogs and fabricating pork carcasses into primal and sub-primal cuts and case-ready products. Chicken segment includes its domestic operations related to raising and processing live chickens into, and purchasing raw materials for fresh, frozen and value-added chicken products and sales from specialty products. Prepared foods segment includes its operations related to manufacturing and marketing frozen and refrigerated food products and logistics operations to move products through the supply chain.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Tyson Foods Inc has a Value Score of 78, which is considered to be undervalued.

Tyson Foods Inc’s price-to-book ratio is higher than its peers. This could make Tyson Foods Inc less attractive for value investors when compared to the industry median at 2.09.

You can read more about Tyson Foods Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Food Processing Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Food Processing stocks as well as other industrys.

Choosing Which of the 6 Best Food Processing Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Bunge Global SA stock has a Value Grade of A.
• First Pacific Co Ltd (ADR) stock has a Value Grade of A.
• Kraft Heinz Co stock has a Value Grade of B.
• Nomad Foods Ltd stock has a Value Grade of A.
• Tofutti Brands Inc stock has a Value Grade of A.
• Tyson Foods Inc stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Food Processing industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Food Processing Stocks

Want to learn more about Food Processing stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Food Processing Stocks for Monday, July 22
• 5 Undervalued Food Processing Stocks for Friday, July 19
• Why B&G; Foods Inc’s (BGS) Stock Is Down 4.22%
• Why Beyond Meat Inc’s (BYND) Stock Is Down 4.67%

AAII Disclaimer

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