4 Fastest-Growing Processed And Packaged Goods Stocks

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 |  Includes: ALN, DMND, GMCR, THS
by: Dividend Screen

Growth is good because it increase earnings meaningfully and lets the current P/E ratio go down. This is the reason investors pay 20, 50 or even 100 times of earnings for an investment. But you really make money if you buy a stock that beats analyst expectations and generates additional growth fantasies. Let’s take a look into the processed and packaged goods industry, an industry that I have analyzed by the best yielding stocks. The industry is a good dividend play and offers a current yield of 3.0 percent. The average price to earnings ratio amounts to 47.6.

I analyzed the processed and packaged goods industry by growth stocks. My first condition is that the 5-year sales and earnings per share growth should be above 15 percent. Further, the company should have additional growth potential, measured by an expected 5-year EPS growth of more than 10 percent yearly. Finally, the growth should create value. This fact is covered by the ratio return on investment (ROI). The ratio shows how efficiently a company converts its debt and equity into profits. I decided to screen only stocks with a positive ROI. Here the results:

1. Green Mountain Coffee Roasters (NASDAQ:GMCR) has a market capitalization of $14.2 billion, generates revenues in an amount of $2.3 billion and a net income of $151.1 million. Its following P/E ratio is 91.2 and forward price to earnings 35.7, Price/Sales 2.3 and Price/Book ratio 11.9. Dividend Yield: 0 percent. The company grew 53.1 percent in sales and 46.1 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 41.2 percent. The ROI is 8.8 percent.

2. American Lorain (NYSEMKT:ALN) has a market capitalization of $46.2 million, generates revenues in an amount of $196.6 million and a net income of $19.0 million. Its following P/E ratio is 2.6 and forward price to earnings 1.7, Price/Sales 0.2 and Price/Book ratio 0.4. Dividend Yield: 0 percent. The company grew 43.6 percent in sales and 18.7 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 15.0 percent. The ROI is 17.0 percent.

3. Treehouse Foods (NYSE:THS) has a market capitalization of $2.2 billion, generates revenues in an amount of $2.0 billion and a net income of $87.1 million. Its following P/E ratio is 25.3 and forward price to earnings 17.8, Price/Sales 1.1 and Price/Book ratio 2.1. Dividend Yield: 0 percent. The company grew 20.8 percent in sales and 44.8 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 11.8 percent. The ROI is 4.2 percent.

4. Diamond Foods (NASDAQ:DMND) has a market capitalization of $1.7 billion, generates revenues in an amount of $965.9 million and a net income of $49.3 million. Its following P/E ratio is 34.8 and forward price to earnings 20.8, Price/Sales 1.8 and Price/Book ratio 3.8. Dividend Yield: 0.2 percent. The company grew 15.2 percent in sales and 36.5 percent in EPS over the past five years. For the upcoming five years, the EPS growth is expected to grow 17.9 percent. The ROI is 4.7 percent.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.