If you’ve been to the grocery store lately, you’ve watched food prices explode higher.
Beef, milk, vegetables, snacks, you name it. What used to cost me $120, now costs closer to $180. All as higher inflation just begins to squeeze us all.
With food producers struggling with shortages, bottlenecks, labor issues, transportation problems, and that pesky virus, food prices have exploded higher. Supply chain disruption has even led to fewer goods and higher prices.
There’s no end in sight.
Inflation at the wholesale level climbed another 8.6% in September, after rising 8.3% in August, according to the U.S. Labor Department.
Of course, those prices are then passed on to consumers. It’s why meat, poultry, eggs, and fish prices are up 10.5% this year, according to Fortune. Meat alone is up 17.6% this year.
Until we can get through key issues, higher food prices may stick around longer than we’d like.
How to Protect Your Portfolio from Inflationary Threats
Rising inflation has become a major concern for retirement age investors.
According to a new survey from Global Atlantic Financial Group, investors ages 59 to 75 are concerned that inflation will wreak havoc on their investments, as noted by CNBC. About 71% of those surveyed believe it will negatively impact them.
“Moreover, 46% of investors said they believe rising inflation and low-interest rates will make it more difficult to have a steady income in retirement. Of those invested in fixed income, 46% said they are concerned about low-interest rates affecting their retirement income,” added CNBC.
Thankfully, there are investment strategies that can help protect your portfolio.
In fact, high-yielding food-related dividend stocks are some of the best ways for investors to generate passive income. After all, when costs of goods go up, these companies will raise their prices to stay safe.
Here’s a look at 3 food dividend investments with solid yields.
B&G Foods Inc. (NYSE: BGS)
Dividend Yield: 6.46%
With a dividend yield of 6.46%, B&G Foods manufacturers, sells and distributes shelf-stable, frozen foods, and household products in the U.S., Canada, and Puerto Rico. At the moment, it has about 50 brands in its portfolio. In fact, if you have Cream of Wheat, Crisco, Dash, Green Giant, Las Palmas, Le Sueur, Mama Mary’s, Maple Grove Farms, New York Style, Ortega, or Polaner on your shelf, you’re a B&G Foods customer.
Granted, the BGS chart and recent earnings growth are nothing to write home about.
However, don’t write the stock off just yet. According to Casey Keller, President, and CEO of B&G Foods, its brands are well-positioned to capitalize on at-home cooking trends. Also, the company has been raising its prices and cost-saving initiatives to protect itself from inflation.
Better, the company has paid out a dividend every quarter since its IPO in late 2004. Its current yield of 6.46% keeps investors coming back for more. Even more impressive, the yield exceeds the average dividend yield of about 2% on the S&P 500.
Kraft Heinz Co. (NASDAQ: KHC)
Dividend Yield: 4.35%
We’re all well aware of Kraft Heinz, which manufacturers and markets food and beverage products all over the world. In 2020, the company produced nearly $26.2 billion, as it benefited from the “at-home food demand” during the pandemic.
Better, despite all of the chaos with the food chain, the stock is positive on the year, running from $32.89 to $37.20. KHC is also a solid dividend play with a 4.35% dividend yield.
Being well prepared for the pandemic and supply chain problems helped.
For one, the company made strategic manufacturing investments at the start of the pandemic to keep up with ketchup packet demand. All as consumers have increased packaged goods spending throughout the pandemic.
Two, according to Kraft Heinz CEO Miguel Patricio, “While industry challenges, like cost inflation, certainly remain, the investments we are making in our people, brands, and capabilities are enabling us to leverage our tremendous scale through greater agility and build our advantage in the markets we serve around the world.”
Three, we must remember that Kraft Heinz is one of the most durable dividend stocks. In addition, the company’s e-commerce division is thriving. In fact, according to the company’s investor deck, it has seen 100% e-commerce growth with about $1.5 billion in global sales.
Hormel Foods Corporation (NYSE: HRL)
Dividend Yield: 2.31%
With a dividend yield of 2.31%, Hormel Foods is another solid stock to consider. While it recently fell from about $45 to a low of $40.74, the stock is starting to recover. In fact, from a current price of $42.70, we’d like to see it refill its bearish gap around $45, near-term.
Analysts appear to like the stock, as well. JP Morgan analyst Thomas Palmer, for example, upgraded the HRL stock to Neutral from Underweight with a $42 price target.
According to TheFly.com, the analyst “expects Hormel’s operating margin to benefit from price increases, turkey industry fundamentals to improve, and Planters to provide an ‘earnings tailwind.’ He also expects the company to deploy its free cash flow net of the dividend mainly for debt reduction, which he says can drive higher valuation for food stocks.”
Also, Hormel’s $3.35 billion acquisition is expected to see higher revenue and better earnings moving forward. That could fuel even more dividend growth. Plus, with a solid balance sheet, Hormel remains a safe investment.
As we look for trade ideas, the U.S. government just handed over a potential big win for one industry. Will we see a boost to the clean energy stocks after the Senate voted to unlock nearly $370 billion this past weekend?
What does all of this mean for the future? Are the jobs reports good or bad?
Keep reading to find out the key levels for the S&P 500 and what reports are likely to move the markets this week.
We could see another strong month ahead for tech and there’s one symbol that you may want to add to your trading list.
Keep reading to learn more about the one symbol that could have a strong August.
As the markets remain relatively flat, theta decay is your friend this week so I thought I’d write about a trade that has been showing remarkable accuracy lately.
This one trade has a 90% accuracy rate. Keep reading to find out more.
It wasn’t too long ago that the market was reacting (or overreacting) to every piece of news that was published. Over the last month and a half, the markets have settled down some. That can be seen from the VIX (volatility index) which has been steadily decreasing since the mid-June market lows.
The Mediots Are At It Again
As we’ve explained over the last few months, it was likely that the U.S. economy would meet the ‘technical’ definition of a recession (two or more consecutive quarters of negative GDP).
It’s official, the Fed increased interest rates by 75 basis points for a second straight meeting. Inflation remains high, job growth is slowing, and consumer confidence is at historic lows.
Maybe that’s why investors are rushing toward dividend investing to protect their portfolios. With a recession likely on the horizon, if we’re not there already, and dividend payouts projected to increase throughout 2022, there are three quality companies you should consider for your portfolio.
What can learn from the major companies that reported earnings?
Alphabet (GOOG/L) released earnings and missed overall, but their ad revenue beat expectations so their stock went up after hours. Microsoft (MSFT) missed on cloud revenue and ad revenue and their stock went down. Great.
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