4 Dairy Stocks To Watch

Due to growing concerns regarding children’s health and obesity, and recommendations from The Institute of Medicine, yogurt may start appearing in schools as a snack. Information continues to emerge about the health benefits of yogurt, one of the products made from milk.

Companies in the dairy products business with market capitalizations above $350 million are limited. The largest in terms of market cap is Groupe DANONE (DA), a French company founded in 1899 which has ADRs that trade on the New York Stock Exchange. However, it is planning on delisting its ADR’s due to the cost.

It produces fresh dairy products under the Danone brand. These include yogurts, dairy desserts, infant foods, and probiotic dairy products. One of its major brands is Dannon yogurt. It also distributes Evian water. The stock has a P/E of 22, a PEG ratio of 1.9, and its dividend is 1.1%.

The second largest, at one tenth the size by market cap is Dean Foods Co. (DF). This company, based in Dallas, Texas, distributes branded and private label dairy products, including yogurt, butter, cheese, cottage cheese, sour cream, half-and-half, whipping cream, dairy coffee creamers, and ice cream. Its P/E is 22.4 with a PEG of 1.9. Its earnings call is scheduled for May 3.

Wimm-Bill-Dann Foods OJSC (WBD) is the third largest company, and is based in Moscow, Russia. It produces pasteurized milk, yogurt, butter, cream, cheese, kefir, cottage cheese, sour cream, puddings, and cheese. It has a P/E is 37, a PEG of .4, and pays a small yield of .3%.

A U. S. company with an international flavor is Synutra International Inc. (SYUT), which is in the business of marketing dairy-based nutritional products, nonfat dry milk and anhydrous milk-fat in China. The stock carries a P/E of 25. Its price/sales ratio is 3.2, and it does not pay a dividend.

As you can see, publicly traded dairy stocks are few and far between, and are located all around the world.

WBD vs DF vs DA vs SYUT 1-yr chart

Disclosure: Author does not own any of the above.

Comments

[Ulysses Ben...:]

Danon, now that it no longer trades as an ADR, and with milk prices down, is at an attractive price to make 50-100% over a year or two. Farmers are killing parts of their herds due to the last two years low prices on milk. Beef is in surplus short term, probably through the 2009 holidays. Milk and milk based products will start jumping in price around the holidays. The time to look at Danon is now.

Jul 28 10:53 AM

[User 473355:]

Is there a milk etf?

Aug 18 06:14 PM