Maple Leaf Foods (TSX:MFI) is a top Canadian packaged foods company. Its shares have climbed 29% over the past three months as of close on June 12. The stock is still down 7.9% year over year.
The company has been on a roll in recent quarters.
Beyond Meat (NASDAQ:BYND) has made waves in North America with its revolutionary plant-based protein product offerings. Many consumers, particularly in younger demographics, are moving away from meat-heavy diets. Fortunately, Maple Leaf also made a lucrative bet on this market several years ago with its acquisition of Lightlife Foods in 2017.
Maple Leaf released its first quarter 2020 results on April 29. The company reported sales growth of 12.8% and an adjusted EBITDA margin of 8.9% on sales. The Meat Protein Group bounced back as Canada and China reopened their meat trade. It achieved sales growth of 12.7% driven by strong Retail volumes and higher sales to Asian markets. Meanwhile, its Plant Protein Group achieved sales growth of 25.9%.
Net loss was $3.7 million for the quarter. The company achieved strong growth in its Meat and Plant Protein groups, but strategic investment in its plant protein weighed on earnings. On April 28, the board of directors approved a quarterly dividend of $0.16 per share. This represents a 2.3% yield.
Shares of Maple Leaf last possessed a favourable price-to-book value of 1.7. There is reason to be excited as it is betting big on its plant-based meat alternatives going forward.
