Investing in Sugar Stocks

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According to the U.S. Department of Agriculture, the average American consumes 17 teaspoons of added sugars each day, which is almost 270 calories. While that’s bad for our health — causing weight gain, obesity, type 2 diabetes, and heart disease — it’s great for the bottom line of companies producing sugar and sweetened food and beverages.

With that profit potential in mind, here’s a look at some of the companies benefiting from our sugar intake.

Image source: Getty Images.

Sugar industry stocks

Those seeking to invest in sugar stocks need to take a unique approach. That’s because no pure sugar-producing companies trade on major U.S. stock exchanges. Instead, a couple of companies produce sugar along with other agricultural products or as part of a diversified portfolio.

In addition, several notable consumer staple stocks and food companies manufacture sugary and confectionery products. With that background, here’s are some of the top sugar stocks:

Company

Ticker Symbol

Market Cap

Description

Tootsie Roll Industries

(NYSE:TR)

$2 billion

Manufacturer of confectionery products.

The Hershey Company

(NYSE:HSY)

$36.2 billion

Chocolate and candy maker.

Whole Earth Brands, Inc.

(NASDAQ:FREE)

$452.4 million

Global food company focused on plant-based sweeteners.

Mondelez International

(NASDAQ:MDLZ)

$84.5 billion

Global snacking and food brands company.

Nestle

(OTC:NSRGY)

$339.4 billion

Nutrition, health, and wellness product company.

Cosan

(NYSE:CSAN)

$8.2 billion

Brazilian bioethanol, sugar, and energy company.

Adecoagro

(NYSE:AGRO)

$1.2 billion

Leading South American agricultural company.

Data source: Company websites and Ycharts. Market cap data as of Sept. 15, 2021.

Here’s a closer look at these sugar companies in the stock market:

Tootsie Roll Industries

Tootsie Roll Industries has been making and selling confectionery candies since introducing the original Tootsie Roll in 1896. It has since grown into one of the country’s largest candy companies.

The candy maker sells familiar brands such as Tootsie Roll, Tootsie Pop, Charms Blow Pop, DOTS, Andes Mints, Sugar Daddy, Charleston Chew, Dubble Bubble, Razzles, Caramel Apple Pop, Junior Mints, Cella’s Chocolate-Covered Cherries, and Nik-L-Nip.

Sales of the company’s sugary candies jumped 18% during the first half of 2021, driven by effective sales and marketing programs as the economy rebounded from the COVID-19 pandemic. Tootsie Roll Industries remains focused on increasing its candy sales by investing in new plant manufacturing operations to meet consumer product demands.

The Hershey Company

Hershey has grown from a single factory to a snacking powerhouse over the past 125 years. The company has more than 90 brands worldwide that ring up more than $8 billion in annual sales. Its iconic brands include Hershey’s, Reese’s, Kit Kat (in the U.S.), Jolly Rancher, Ice Breakers, SkinnyPop, and Pirate’s Booty.

Hershey’s has been a sweet stock to own over the years. It has delivered peer-leading shareholder returns by steadily expanding its portfolio of candy brands and its dividend payments to investors. As of late 2021, Hersey had increased its dividend every year since the Great Recession.

Whole Earth Brands

Whole Earth Brands is a global food company aiming to tap into the world’s sugar cravings by offering healthier alternatives. The company makes premium plant-based sweeteners, flavor enhancers, and other foods. Its brand portfolio includes Whole Earth Sweetener, Wholesome, Swerve, Pure Via, Equal, and Canderel.

The company is taking aim at the massive $100 billion sweetener market that sugar still dominates with a more than 75% market share. Low-calorie sweeteners only represent 3% of global tabletop sweetener volumes, giving the company a tremendous opportunity to provide consumers with a healthier alternative to sugar.

Mondelez International

Mondelez is one of the largest snack companies in the world. Its products include biscuits (cookies, crackers, and salted snacks), chocolate, gum, and candy. Notable sugary brands include Sour Patch Kids, Trident, Cadbury, Chips Ahoy, Oreo, and many others.

The company has delivered sweet returns for shareholders. Mondelez has increased its dividend 46% since 2017 while repurchasing $7.1 billion of its shares during that period. The snack maker believes it can continue returning more cash to shareholders in the future even as it keeps expanding its global portfolio of popular snacking brands.

Nestle

Nestle is a global food, beverage, and nutritional health solutions giant. The Switzerland-based company has more than 2,000 brands in its portfolio, ranging from iconic global ones to local favorites. The company’s sugary confectionery brands include KitKat (outside the U.S.), Toll House, and Smarties, while other sweet brands include Dreyer’s and Haagen-Dazs ice cream, Coffee mate, and Nesquik. 

While Nestle has some sweet offerings, it’s not as pure a play on sugar intake as others. However, the company offers a diversified portfolio that adapts to consumer tastes, which is important as more people try to limit their sugar intake for health reasons. That adaptability has Nestle on track to deliver sustained organic sales growth in the mid-single digits in the coming years.

Cosan

Cosan is a Brazilian holding company. It has a joint venture with Shell (NYSE:RDS.A) called Raizen S.A., an integrated energy company that produces sugar, ethanol, and bioenergy. It also operates one of Brazil’s largest lubricants companies and Latin America’s largest logistics operator, plus it invests in infrastructure, distribution, commercialization, and trading in the natural gas and energy sectors. 

Cosan offers a different spin on sugar. It’s a leading manufacturer of sugarcane ethanol in Brazil and the largest individual sugar exporter globally. Cosan sells its sugar to food manufacturers that put it in chocolate, candies, chewing gum, cakes, biscuits, ice cream, and cereals. The pharmaceutical industry also uses its sugar for syrups, oral intake medicines, and nutritional products, while beverage makers put it in soft drinks, juices, and alcoholic beverages

Adecoagro

Adecoagro is a leading agricultural company in South America. Its farming business produces milk, rice, and grains, and, like Cosan, it has a sugar, ethanol, and energy business.

The company plants and processes sugarcane. It uses some of this sugarcane to produce ethanol, a clean and renewable fuel, which it sells to major Brazilian distributors. It also sells organic, white, and brown sugar to both domestic and international markets.

Do sugar stocks deliver sweet returns?

Investors have lots of ways to invest in our nearly insatiable appetite for sugar. They can buy shares of sugar producers such as Cosan or Adecoagro or invest in companies that use sugar to make confectionary products like chocolate and candy.

Many of these companies have a long track record of delivering sweet returns to shareholders since sugar consumption remains relatively stable even though we should eat less of it. While that’s leading to a rise in lower-calorie substitutes by companies such as Whole Earth Brands, sugar remains the dominant way we sweeten our lives.