NEW YORK ( TheStreet) -- Peanut butter lovers will soon face the brunt of soaring prices as scorching heat and a drought in southern U.S. have ravaged the crop, resulting in zero yield in key producing states this year. On average, Americans spend almost $800 million a year on peanut butter products every year. The average American consumes more than six pounds of peanuts and peanut butter products each year, according to the National Peanut Board.

Prices for a ton of runner peanuts, used to make peanut butter, touched $1,200 mid-October, compared to $450 per ton in the same month a year ago, according to the U.S. Department of Agriculture. Peanut production stood at 3.63 billion pounds in 2011, down 13% from last year's 4.16 billion pounds, the Department of Agriculture reveals.

These four stocks have potential upsides up to 12% with average buy and hold rating of 42% and 55%, respectively, according to data compiled by Bloomberg.

These stocks are arranged in ascending order of upside potential, based on analysts' average estimates.


4. The J.M. Smucker Company ( SJM) manufactures and markets branded food products worldwide, with principal products being coffee, peanut butter, shortening and oils, fruit spreads, canned milk and baking mixes. The company generates a significant portion of its sales in the U.S. SJM will release its second-quarter fiscal 2012 results on November 17.

J.M. Smucker, maker of the popular Jif peanut butter, will hike prices almost 30% starting November 8, as this year's peanut harvests have been the worst in decades.

Recently, SJM declared a dividend of 48 cents per share on its common stock payable December 1 to shareholders of record November 11. The company has a dividend yield of 2.3%, currently.

In the last week of October, SJM announced signing a definitive agreement to acquire a majority of the North American foodservice coffee and hot beverage business of Sara Lee for $350 million, to be paid when the deal closes in early 2012. Also, the company will pay an additional $50 million in declining installments over the next 10 years.

For the second quarter of fiscal 2012, a consensus forecast of analysts polled by Bloomberg sees net income of $158.29 million, or $1.40 per share, a sequential 23.9% increase. This compares to $165.28 million, or $1.38 per share, in the second quarter of fiscal 2011. Cash flow per share for the second quarter of fiscal 2012 is forecast to rise to $1.49, compared to 39 cents in the second quarter of fiscal 2011. Year-over-year sales grew 17% to $1.5 billion.

Of the 16 analysts covering the stock, 31% recommend a buy and 63% rate it a hold. Data from Bloomberg has analysts forecasting the stock gaining 4.3% to $80.56 in the upcoming 12 months.

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.

2. Snyder S Lance ( LNCE) manufactures, markets and distributes a variety of snack food products. It also resells certain cakes, meat snacks, candy and other partner brand products. The company is scheduled to release its third-quarter 2011 results on November 3.

The company paid a dividend of 16 cents per share in the final week of August, taking the total dividend for 2011 to 48 cents per share. The dividend yield is 3%.

A consensus forecast of analysts polled by Bloomberg expects LNCE to record net income of $14.91 million, or 23 cents per share, for the third quarter of 2011, compared to $11.05 million, or 16 cents per share, in the second quarter of 2011. Sales are seen rising to $411.29 million from $237.68 million in the same quarter last year. Operating profit is estimated up 57% year-over-year to $25.64 million.

With the pricing of private brands coming under pressure of higher commodity costs, LNCE expects margins to improve in third-quarter 2011. For full-year 2011, the company estimates earnings per share, excluding special items, to range from 75 cents to 90 cents on a fully diluted basis. Also, revenue is forecast between $1.59 billion and $1.63 billion, while capital expenditures are pegged in the range of $60 million to $70 million for the year.

Of the 13 analysts covering the stock, 31% recommend a buy and 62% rate it as a hold. Data from Bloomberg has analysts forecasting the stock gaining 12.4% to $23.17 in the upcoming 12 months.

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.

If you liked this article you might like

Analysts' Actions -- IHS, Kraft Foods, Netflix, Charles Schwab and More
Do You Own These 5 Blue-Chips? Sell Them!

Do You Own These 5 Blue-Chips? Sell Them!

Commodities Watch

Commodities Watch

DuPont Risks Dow Industrials Legacy as Transformation Looms

DuPont Risks Dow Industrials Legacy as Transformation Looms

Cramer's 'Mad Money' Recap: Looking for Real Leaders

Cramer's 'Mad Money' Recap: Looking for Real Leaders