Which Consumer Staples Are Good Value Right Now?

Can Canadian food stocks like Saputo Inc. (TSX:SAP) deliver amid “big food” concerns?

| More on:

Consumer staples have long been held as a defensive arm of stock investment, with food and drink being seen as recession-proof industries. However, with some pundits south of the border declaring “big food” a bust, let’s see how a few Canadian companies stand up against one American cousin that’s currently the subject of much speculation.

Saputo (TSX:SAP)

The TSX index’s star stock when it comes to dairy, Saputo, is up 1.94% in the past five days at the time of writing. Offering a dividend yield of 1.46% and with an 8.6% expected annual growth in earnings on the table, Saputo would bring defensiveness and diversification to a passive income portfolio light on consumer staples.

Would-be investors will have to weigh up the rest of it stats, which signify an adequate stock all told: a five-year average past earnings growth of 9.5% indicates a fairly pedestrian track record, though it’s suitably positive amid a tough, competitive industry, while a P/E of 23 times earnings and P/B of 3.2 times book suggest so-so valuation.

Rogers Sugar (TSX:RSI)

It’s been a good 12 months for this TSX index sugar giant, with a past-year earnings growth of 47.1% that eclipses its own 7.4% five-year average. While its level of debt to net worth has gone up over the last half a decade from 73.2% to 95.8%, more shares have been picked up than sold by insiders over the last three months, with the past 12 months seeing significant volumes of shares bought by those in the know.

Lassonde Industries (TSX:LAS.A)

Canada’s steady-rolling drinks producer can boast a stable track record, with a 12-month earnings growth of 17.6% almost identical to its five-year average of 16.5%. An okay track record is on display with a debt level of 51% of net worth, while valuation is fair in terms of its fundamentals (see a P/E of 13.3 and P/B of 1.8). A dividend yield of 1.94% meets a 6.6% expected annual growth in earnings for a decent all-round portfolio filler.

Kraft Heinz (NASDAQ:KHC)

Up 2.4% in the last five days, it seems “big food” stock Kraft Heinz is starting to find its way back into the good books of NASDAQ investors after falling off a cliff post-write down. While some doomsayers are writing this stock off altogether, citing changing consumer behaviour, it would be a shame to overlook some strong stats, from a solid five-year average earnings growth of 45.2% to an attractive P/B ratio of 0.8 times book.

While a debt level of 60.3% of net worth is within the danger zone and denotes a so-so balance sheet, a dividend yield of 4.86% is suitably appetizing, while a high 66.4% expected annual growth in earnings puts this stock firmly in the high-growth column.

The bottom line

It would seem that food stocks on the TSX index are safe from the kind of fear currently following stocks like Kraft Heinz around at the moment. While Saputo’s debt 46% of net worth beats that of Rogers Sugar, the latter stock has the better valuation (a P/E of 15.3 times earnings and P/B of 1.8 times book) as well as a higher dividend yield at 5.93%, making the sugar producer one of the strongest choices right now.

Should you invest $1,000 in Enbridge right now?

Before you buy stock in Enbridge, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the Top Stocks for 2025 and Beyond for investors to buy now… and Enbridge wasn’t one of them. The Top Stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $21,345.77!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 24 percentage points since 2013*.

See the Top Stocks * Returns as of 4/21/25

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Victoria Hetherington has no position in any of the stocks mentioned. Saputo and Rogers are recommendations of Stock Advisor Canada.

More on Dividend Stocks

shoppers in an indoor mall
Dividend Stocks

6.2% Dividend Yield! I’m Buying This TSX Stock and Holding for Decades

This dividend yield may not be double digit, but it's far safer than many others out there.

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

1 Magnificent TSX Value Stock Down 28% I’m Buying With Confidence

goeasy is a rare combination of value, income, and growth worth considering today for high-risk, long-term investors.

Read more »

Trans Alaska Pipeline with Autumn Colors
Dividend Stocks

This Canadian Pipeline Paying 5.5% is My Top Pick for Income Investors

Pembina Pipeline stock’s 5.5% yield, strong contracts, and minimal tariff impact make it a top pick for income investors seeking…

Read more »

Retirees sip their morning coffee outside.
Dividend Stocks

I’d Put $7,000 in This Reliable Monthly Dividend Payer – Immediately

The following three monthly paying dividend stocks can deliver a reliable passive income.

Read more »

stocks climbing green bull market
Top TSX Stocks

Where I’d Invest $13,000 in the TSX Today

TSX stocks that are benefitting from strong fundamentals and offer investors good entry points today include Enbridge and Aecon.

Read more »

Happy shoppers look at a cellphone.
Dividend Stocks

The Only TSX Stock I’d Buy and Hold for the Next 20 Years

This TSX stock offers growth potential, consistent income, and solid value. These characteristics will result in above-average returns.

Read more »

senior man smiles next to a light-filled window
Dividend Stocks

I’d Bet My Entire TFSA on This 3.5% Monthly Dividend Stock

An outperforming monthly dividend stock is a good prospect for TFSA investors in 2025.

Read more »

Electricity transmission towers with orange glowing wires against night sky
Dividend Stocks

My Top 2 TSX Stocks to Buy Right Away for Long-Term Income

These two TSX stocks aren't only looking to climb over time, they also offer up strong dividends to boot!

Read more »