Is McCormick & Company (MKC) One of the Best Packaged Food Stocks to Buy Now?

Yahoo

11-04-2025

We recently published a list of . In this article, we are going to take a look at where McCormick & Company, Incorporated (NYSE:MKC) stands against other best packaged food stocks to buy now.
According to a report by Grand View Research, the US packaged food market had a size of $1.03 trillion in 2021. It is expected to grow at a compound annual growth rate (CAGR) of 4.8% between 2022 and 2030. The primary growth drivers for the industry include the rising consumer inclination for convenience coupled with consumers' hectic lives and work schedules. In addition, the rise in e-commerce sales in the US is another significant factor supporting the sale of packaged food nationwide. Growing innovation in plant-based products, food packaging, healthy ingredients, and bold flavors is expected to continue driving this growth in the United States in the coming years.
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On April 8, BofA Securities analysts Bryan D. Spillane, Lisa K. Lewandowski, and Peter T. Galbo released their research findings on the consumer staples industry and their expected performance in case of a potential recession. The analysts iterated that in a majority of recent recessions, consumer staples have historically outperformed the S&P 500 as a sector. This trend points towards a defensive edge for the sector. However, the analysts also cautioned that current market conditions, including weak volume growth and lingering high prices, should be considered, as they may affect the sector's resilience in a future downturn. Despite these concerns, consumer staples make up an appealing sector for investors and experts due to their limited exposure to the recently imposed tariffs, potentially helping sustain valuation multiples.
During recessions, the stock prices in the consumer staples sector are typically affected by earnings per share (EPS) instead of sales growth. Yahoo! Finance reported that sector analysis highlights forward EPS accounting for more than 90% of stock price movement across central subsectors, including Packaged Food, Beverages, Household and Personal Care, and Tobacco. The analysts also opined that these trends reflect the significance of earnings strength when determining stock performance in volatile and uncertain economic conditions.
Yahoo! Finance further reported that the top-performing stocks in the consumer staples sector are likely to share three common traits. These include solid balance sheets with the potential to sustain share buybacks to boost EPS, profit flexibility to offset increasing costs and revenue pressure, and a strong manufacturing presence in the US to constrain tariff-related inflation.
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 30 packaged food stocks and chose the top 10 most popular among hedge funds as of Q4 2024. The list is ordered in ascending order of hedge fund sentiment. We sourced the hedge fund sentiment data from Insider Monkey's database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points ().
A close-up of spices, herbs and seasoning mixes in a colorful array, highlighting the company's range of products.McCormick & Company, Incorporated (NYSE:MKC) manufactures, markets, and distributes packaged spices, seasonings, herbs, condiments, and flavors to the entire food and beverage industry, including food manufacturers, retailers, and food service businesses. Its operations are divided into the Consumer and Flavor Solutions segments. The Consumer segment sells its products to retail channels under various brands, including French's, Frank's RedHot, Lawry's, Zatarain's, Simply Asia, Thai Kitchen, and more. The Flavor Solutions segment offers a range of packaged products to food service customers and food manufacturers.
The company reported volume-driven performance in its fiscal Q1 2025 results, reflecting the success of its prioritized investments. It attained share gains in core categories across key markets, delivering volume growth in the Consumer and Flavor Solutions segments.
In a report released on April 9, Robert Dickerson from Jefferies reiterated a Buy rating on McCormick & Company, Incorporated (NYSE:MKC) and set a price target of $89.00.
Overall, MKC ranks 8th on our list of best packaged food stocks to buy now. While we acknowledge the potential for MKC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than MKC but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.