4 US Food & Beverage Stocks That Could Deliver Tasty Share Price Returns

Chicken Drumlets with Fries and Dip
Chicken Drumlets with Fries and Dip

It is no secret that Singaporeans love their food.

Judging from the weekly write-ups on interesting places to eat along with the explosion in the number of food bloggers, we love to scour the island for tasty morsels to fill our tummies.

But, did you know that food and beverage (F&B) businesses could also make great investments?

Over in the US, we spotted several interesting F&B businesses whose businesses have done well over the years.

Here are four that could deliver delicious returns to your investment portfolio.

Chipotle Mexican Grill (NYSE: CMG)

Chipotle Mexican Grill, or CMG, is a Mexican restaurant chain with over 3,250 self-owned and operated restaurants in the US, Canada, the UK, France, and Germany.

The company reported a strong set of results for its second quarter (2Q 2023) and first half (1H 2023) of 2023.

Revenue increased by 13.6% year on year to US$2.5 billion for 2Q 2023 with comparable restaurant sales up 7.4% year on year.

During the quarter, Chipotle opened a total of 47 new restaurants, of which 40 included a Chipotlane, allowing customers to drive by and pick up their online orders.

For 1H 2023, revenue climbed 15.3% year on year to US$4.9 billion while operating profit surged by 51.5% year on year to US$799.4 million.

Net profit also increased by 51.5% year on year to US$633.4 million.

The Mexican restaurant chain also saw its free cash flow more than double year on year to US$780 million for 1H 2023.

Chipotle recently signed its first-ever development agreement to open restaurants in the Middle East.

In partnership with international franchise retail operator Alshaya Group, the F&B chain intends to open new restaurants in Dubai and Kuwait in early 2024 before expanding further into the region.

Mondelez International (NASDAQ: MDLZ)

Mondelez is a confectionary and snack manufacturer with famous brands such as Oreo, Ritz, Cadbury Dairy Milk, and Toblerone.

The company is one of the largest snack companies in the world occupying the top global position in biscuits and the #2 position in chocolates.

Mondelez delivered a delicious financial performance for 1H 2023 with revenue climbing 17.5% year on year to US$17.7 billion.

Operating profit leapt 45% year on year to US$2.9 billion while net profit surged by 88% year on year to US$3 billion.

The business also generated a positive free cash flow of US$1.5 billion for 1H 2023, slightly below the US$1.6 billion churned out in the prior year.

The company launched several new products recently to broaden its slate of delectable treats.

Oreo Airy Cake was launched in China while a less-than-100-calorie adult treat was introduced under the Cadbury brand.

Mondelez intends to accelerate its digital commerce channel and drive its core brands into the cake category while increasing distribution and innovation to come up with new products for the market.

Wingstop (NASDAQ: WING)

Wingstop offers chicken wings, tenders, and sandwiches in more than 2,000 locations worldwide in 11 distinctive flavours.

Like Chipotle, Wingstop also announced a sterling set of earnings for 2Q 2023 and 1H 2023.

For 2Q 2023, sales increased by 27.8% year on year to US$809.8 million.

Domestic same-store sales improved by 16.8% year on year with digital sales at 65.2% of total sales.

Wingstop opened 50 new locations in 2Q 2023.

For 1H 2023, revenue jumped nearly 35% year on year to US$215.9 million.

Operating profit increased by 35.3% year on year to US$163.8 million while net profit jumped close to 45% year on year to US$31.9 million.

Free cash flow also soared 84.7% year on year to US$31 million for 1H 2023.

For 2023, Wingstop plans to open between 240 to 250 new stores globally and expects 10% to 12% domestic same-store sales growth.

Domino’s Pizza (NYSE: DPZ)

Domino’s Pizza is one of the largest pizza companies in the world with more than 20,000 stores in more than 90 markets.

The pizza company saw global retail sales grow 5.8% year on year in 2Q 2023.

US and international same-store sales increased by 0.1% and 3.6%, respectively, during the quarter.

2Q 2023 also saw a net store increase of 197 stores and the board of directors declared a US$1.21 per share quarterly dividend.

For 1H 2023, revenue dipped by 1.3% year on year to US$2 billion but operating profit improved by 8.8% year on year to US$372.9 million.

Net profit increased by 10.7% year on year to US$214.2 million.

Domino’s free cash flow surged by 69.2% year on year to US$204.3 million for 1H 2023.

The pizza chain continues to introduce new products to whet its customers’ appetites, with the latest being the launch of pepperoni-stuffed cheesy bread across all franchised and corporate stores in the US.

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Disclosure: Royston Yang does not own shares in any of the companies mentioned.

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