Friday, March 21, 2014

Junk Food or Health Food: Which is a Better Investment?

There was a news report yesterday that people who use food banks spend the money they save on junk food. There will always be consumers of junk food, but as the population grows older, there is a tendency for individuals to eat healthier foods, causing the health food industry to increase dramatically over the last decade or so.

The PowerShares Dynamic Food & Beverage ETF (PBJ), with the great ticker symbol that matches the acronym for "peanut butter and jelly," has such stocks in its portfolio as Hershey (HSY), Coca-Cola (KO), and Pepsico (PEP). This ETF is up almost up about 8% during the last six months, outperforming the S&P 500 which has risen about 5% over the same period of time.

However, health food companies such as Hain Celestial Group (HAIN), have moved up 15% in the last six month. The company, which makes and sells natural and organic food products, trades at 33.5 times trailing earnings and 26 times forward earnings. Net income for the latest quarter was up a strong 30.4%, on a 17.5% rise in revenues.

Another healthy health food stock is United Natural Foods (UNFI), a distributor of natural and organic foods. The stock is up around 6.5% for the last half year. It has a forward price to earnings ratio of  32, and forward PE ratio of 26. Latest quarterly earnings were up 23.6% on a 13.9% boost in revenues for the quarter.

A free list of health food stocks, and a list of regular food stocks, is available at, which has information on the PE, the forward PE, the PEG, the yield, and the business profile.

Disclosure: The author didn't own any of the above at the time the article was written.



superhumanradio said...

i can say health food,you wont regret your budget when it comes to your is always better to eat healthy food and your body will response on what you've eat..thanks for sharing it with us.

Stockerblog said...

Yes, health food is better for your health. But both health food stocks and junk food stocks can be better for your financial health.