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Hoard Peanut Butter as Prices Soar: 4 Stocks to Benefit

Stocks in this article: KFT SJM CAG LNCE

3. ConAgra Foods (CAG) operates in the consumer and commercial food segments. Some of its brands include Banquet, Chef Boyardee, David Seeds, Egg Beaters, Healthy Choice, Hebrew National, Pam and Snack Pack. ConAgra announced it will implement a price hike of more than 20% for its Peter Pan brand peanut butter, effective November.

For the first quarter of fiscal 2012, the company reported a 9.5% increase in net sales to $3.07 billion, vs. $2.80 billion recorded in the year-ago quarter. Net income attributable to the company stood at $85.3 million, or 21 cents per share. Cash and cash equivalents at the end of the period increased to $1.09 billion, compared to $840.9 million in the first quarter of fiscal 2011.

For full-year 2012, CAG estimates diluted EPS, adjusted for items impacting comparability, to grow in the low-to-mid single-digit rate from $1.75 recorded in the previous fiscal year. Earnings are likely to grow in the second half of the year on higher pricing. Full-year operating cash flow is estimated in excess of $1.2 billion. By 2017, the company wants to be the fastest-growing U.S. food company in terms of profitability and sales, says Chief Executive Gary Rodkin. Going forward, making a deal or deals remains top priority for CAG, Rodkin adds.

Strong cash flows saw the company's board approving a quarterly dividend of 24 cents per share payable Dec. 1 to shareholders of record October 31, up from 23 cents the previous quarter. Meanwhile, the company went ex-dividend on October 27. The stock is trading at a dividend yield of 3.7%, currently.

Of the 15 analysts covering the stock, 33% recommend a buy and the rest rate it a hold. There are no sell ratings on the stock. Analysts polled by Bloomberg expect the stock to gain an average 4.6% to $26.30 in the upcoming 12 months.

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