The stereotypical American Thanksgiving usually kicks off with the Macy’s Thanksgiving Day Parade, followed by the arrival of guests, a little NFL (traditionally the Lions), perhaps some backyard football with assorted uncles, and, to cap it all off, an indulgent Thanksgiving dinner.
For our house, like many others, that means stuffing, canned cranberries, green beans, mashed potatoes, sweet potatoes, and the centerpiece, a nice oven-roasted (although sometimes smoked) turkey.
So that got us thinking about whether there were any investing opportunities, Thanksgiving stocks as it were, to help pad your portfolio and maybe prompt you to let a notch out of its belt.
[text_ad]
Unlike many of our other articles, this one is light on screeners and heavy on tradition, relying more on the well-known Thanksgiving fixtures than momentum or EBITDAs.
So, we’re going to break down a handful of Thanksgiving stocks, sorting them by where they land on the table instead of where they fit in a portfolio.
Thanksgiving Stocks on the Side
Stuffing
Unlike true gourmands, we’re not going to split the difference between stuffing and dressing here, so this category is shorthand for a seasoned, bread-based side, however you like it.
First up is Kraft Heinz (KHC), which has owned the Stove Top stuffing brand since 1990. Although it’s sure to give grandma some fits, this quick and easy boxed stuffing sells about 60 million boxes every Thanksgiving and is one of the most beloved parts of every meal.
As for the stock, KHC is down 17% so far in 2023, is underperforming the consumer staples sector (down 6% YTD as measured by the SPDR Consumer Staples ETF (XLP)) and is down about 34% in the last five years. About the only upside is the enduring value of the underlying brands and a healthy 4.7% dividend yield.
For the stuffing purists out there, next on our list is Tyson Foods (TSN), which has owned sausage maker Jimmy Dean since it was acquired as part of Hillshire Brands in 2014. Whether the name belongs on this list is a question as sure to start a fight as whether sausage even belongs in stuffing (Editor’s note: It does.), but sausage in stuffing is enough of a tradition to warrant the inclusion.
TSN has gone through the wringer the last few years, shedding 17.8% in the last five and nearly 24% in 2023 alone. Despite nearly three-quarters of U.S. consumers buying at least one of Tyson’s core products, the company has struggled with inefficiency, supply chain issues, and a weakening consumer. The stock carries an aggregate “Hold” rating from covering analysts, and an average price target of only 51.30, less than 10% higher than where shares are currently trading.
“Fruits” and “Vegetables”
The starch-heavy nature of most Thanksgiving dinners is the reason behind the quotation marks in this Thanksgiving stock subcategory, but a meal without mashed potatoes, green beans or cranberries can hardly be called Thanksgiving dinner.
So, let’s start with mashed potatoes (and an increasingly popular “hack”) courtesy of Post Holdings’ (POST) Bob Evans brand. These microwavable mashed potatoes have become a Thanksgiving staple in our house as they’re a far sight better than any “instant” mashed potatoes and are quicker and easier than peeling, boiling, and mashing your own.
Post Holdings is a consumer packaged goods company with an impressive portfolio of dry goods, refrigerated foods, private brand labels and even pet foods. As for the stock, POST has outperformed the consumer staples group as it’s down just over 4% this year but is up almost 44% in the last five. The shares don’t pay a dividend but do carry an average “Buy” rating from covering analysts. Plus, the longer-term chart is actually showing some strength.
Next, let’s round out our meal a little by adding some greens in the form of frozen or canned green beans courtesy of B&G Foods’ (BGS) Green Giant.
B&G recently sold the canned component of Green Giant to Seneca Foods (SENEA), but the frozen veggie brand is just one among many pantry-fillers the company owns, including Clabber Girl, Cream of Rice, Cream of Wheat, Crisco, Dash, Davis, Devonsheer, Don Pepino, Durkee, Emeril’s, Grandma’s Molasses, and others.
Shares are down 16% this year and have shed 69% in the last five as the company works to pare down its brand portfolio and grow leaner and meaner. One upshot is the 8.2% dividend (the company just declared a $0.19 quarterly dividend to be paid in January), but this is a stay-away for momentum traders until the company can right the ship.
Last on our list of sides are the cranberries, which, love ‘em or hate ‘em, are a Thanksgiving staple. And no brand is bigger than Ocean Spray, which is estimated to handle 60% of the worldwide cranberry crop and offers fresh, canned and dried cranberries as well as assorted juices. The company is actually a farmer-owned co-op, which puts it out of reach for equity investors.
The Main Course
You’ve got a lot more turkey options these days than you might have had 30 years ago as organic, free-range, small-farm and other varieties proliferate. But with a 30% share of the 46 million frozen turkeys sold every Thanksgiving, Butterball is the name to beat.
The company is 50% private with the balance owned by Seabord Corp. (SEB), which also engages in pork processing, commodity trading and milling, and marine transport. Seabord acquired its 50% (non-controlling) stake in 2010 and exceeded $4 billion in revenues the same year, joining the Fortune 500 the next.
The shares of SEB are very thinly traded, averaging just below 2,000 shares traded on a daily basis, offer a small dividend (0.25%), and have not attracted analyst coverage. Shares are down 4% so far in 2023 and 2% in the last five years. So between the flat performance, low yield, and lack of volume, they’re not particularly attractive.
Dessert
Let’s close out this list with the only appropriate way to end a Thanksgiving dinner, a slice of pumpkin pie courtesy of Nestle’s (NSRGY) Libby’s brand canned pumpkin. While Libby’s has gone through a number of brand shake-ups (the aforementioned Seneca Foods owns many of Libby’s non-pumpkin canned and jarred products), Nestle held onto the canned pumpkin, and for good reason – it represents about 90% of the North American market for canned pumpkin.
As the largest publicly held food company in the world, only a small fraction of Nestle’s overall performance is attributable to the Libby’s brand, with most of Nestle’s revenues coming from powdered and liquid beverages, pet care, and nutrition and health science segments.
As for the stock, NSRGY is down 5% in 2023, but up more than 30% in the last five years, with most of those returns coming in the first year of that period. The shares are “Buy”-rated by analysts and offer a 3% dividend yield, but their rangebound nature for the last few years doesn’t make them particularly attractive, especially at an elevated 27 times trailing earnings.
While none of these Thanksgiving stocks look worthy of a Black Friday-like rush to add them to your portfolio, hopefully, you can at least walk away having learned a little more about the companies behind your Thanksgiving dinner.
Happy Thanksgiving!
[author_ad]
