Key Points
- As the market tends to favor liquidity and yield, this sector provides a potential solution for stability and upside.
- Three names stand out to spoil you for a choice between low/high betas, dividend yield, and analyst upside projections for EPS.
- Understanding the nature of these products, which rarely suffer under an economic downturn, can help you navigate a potential hard landing.
- 5 stocks we like better than Tyson Foods
Turbulence lies ahead of you, with today's market being dislocated from left to right, up and down. Rising interest rates and slowing business activity in the United States have sparked a new wave of capital flows, which all seem to have two goals: liquidity and yield.
Today, MarketBeat is bringing you a reasonable list of stocks that offer some of these preferences and then some. Moreover, these names have been selected from a list of consumer staples stocks, offering an intrinsic level of stability from the industry's steady nature.
With a mix of upside potential from analysts, robust financials and recent momentum, and even a competitive dividend yield, you can find what works best for your portfolio in this list: time to get stuck in.
Celsius Holding
After suffering a recent decline as significant as 16% in the past month, this stock is quickly grabbing a list of buyers at support, especially with its optimistic financial projections. Celsius NASDAQ: CELH brings you the upside you need to beat the rising treasury yields.
Can investors find any value after this stock beat the S&P 500 by a staggering 58.3% on a year-to-date basis? The answer is more straightforward than you think.
Analysts expect earnings per share to jump by a massive 52.2% for the next twelve months, and all else being equal, stock prices are typically valued off of the growth seen in EPS. Following this logic, the answer is yes; this name still has a lot of upside.
As part of the high beta stocks group, Celsius will likely not offer a dividend any time soon, so you will be betting on the stock's appreciation in this case. If the shoe fits your risk appetite, this play is for you in today's high-yield environment.
Appreciation is almost inconsequential with Celsius, especially considering the recent momentum seen in the company's latest quarterly earnings results. To kick it off, Celsius reported record quarterly revenue of $326 million, which is up 112% from a year prior!
Remember that expected 52.2% EPS jump for next year? It does seem to pale compared to the recent 333% achieved during the past twelve months. Could these analysts be playing it safe, or are they oblivious to this name's boiling-hot momentum?
J&J Snack Foods
Shifting gears a bit, you can get less volatility if your portfolio is calling for that. With J&J Snack Foods NASDAQ: JJSF, you can expect a low beta of 0.58 and a double-digit upside. This mix is becoming harder and harder to come across today.
This stock has been affected by the broader market sell-offs, this one bringing you a 13% discount from recent highs, which only gets the net upside - and dividend yield - higher.
Though not something to write home about, this stock does offer a 1.9% dividend yield today. However, it does make up for it by outperforming in other areas like its financial performance.
With another record quarterly revenue of $425.8 for the third quarter of 2023, the trends pushing the sector higher begin to build on themselves.
Gross margins at this firm remain steadily above 25% (ex. COVID), which is an attractive level for any industry. However, this becomes all the more important considering that the food sector has suffered from supply chain disruptions and bottlenecks, implying this name has deep pricing power and strong supply relationships.
Analysts have appreciated these features, so they landed on a consensus price target of $185.0 a share, implying that the stock needs to rally by as much as 19.6% from today's prices to meet this prediction.
On an EPS basis, analysts are also expecting big things from this company, with a 25.7% jump for the next twelve months being a factor that may not be priced into today's stock price.
Tyson Foods
Hitting a fresh 52-week low is only the beginning pillar of undervaluation for this stock, offering you the most upside on this list at essentially the lowest risk. Tyson Foods NYSE: TSN could be the position to tie off both low beta and high upside potential, with a bonus on top.
Getting the boring stuff out your way, Tyson is offering a 4.1% dividend yield today. While this may not be as competitive relative to the near 5.0% paid by the treasury, it seems to be a generous addition to the underlying upside.
Tyson is now facing an inflection point after a dislocation in both beef and chicken prices experienced throughout the post-pandemic months. Managing these issues will be essential to fulfilling analyst expectations moving forward.
Cooler heads prevail here, as the company reports the closure of four chicken facilities, an action expected to increase capacity utilization and reduce costs. Given the rising price of chicken, this may be accretive to margins and earnings since they can make more money with less effort now.
Considering that Tyson's financials reflect a cyclical low level of gross margins, the turnaround initiated by management may be the reason behind analysts' expectations of a tremendous 143.3% jump in EPS for the next twelve months.
Before you consider Tyson Foods, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Tyson Foods wasn't on the list.
While Tyson Foods currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.
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