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Hoard Peanut Butter as Prices Soar: 4 Stocks to Benefit

Stocks in this article: KFT SJM CAG LNCE

1. Kraft Foods (KFT) manufactures and markets packaged foods and grocery products. With presence in more than 75 countries, KFT operates in three segments: North America, Europe and Developing Markets. The company is scheduled to release its third-quarter 2011 results on Nov. 2 at market close.

With one of the worst peanut harvests in decades, Kraft said it would be increasing the price of its Planters brand peanut butter by 40% starting November 7.

Mid-October, the company paid a regular quarterly dividend of 29 cents per share on its common share of Class A stock. The company has a dividend yield of 3.4%, currently.

A consensus estimate of analysts polled by Bloomberg expects Kraft to record net income of $977.83 million, or 55 cents per share, compared to $824.16 million, or 47 cents per share, in the year-ago quarter. Sales for the quarter are seen rising 8% to $12.81 billion from $11.86 billion the year earlier. Cash flow per share is expected to increase multi-fold to 76 cents from 25 cents.

The biscuit market leader in Europe, with a more than 15% market share, Kraft has opened its new European Biscuit R&D center in France to support product development for several of Europe's biscuit brands, including LU, belVita, Oreo, Mikado, Prince, Saiwa and TUC, with a total investment of $20 million.

Of the 21 analysts covering the stock, 71% rate it a buy and the rest suggest a hold. There are no sell ratings on the stock. A Bloomberg poll foresees the stock gaining an average 12.5% to $38.88 in the upcoming 12 months.

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