Food stocks still offer growth & income

Article Excerpt

Earnings growth at these three leading food processors has slumped in the past few years. Rising costs for ingredients, steel and plastic packaging, and transportation have cut into their profit margins. Consumer interest in healthier diets has also hurt interest in processed foods. But each of these three have restructured their businesses to focus on their most profitable products. Better efficiency should help shield them from increasing costs, and give them more predictable earnings. New investments in product development should also spur sales growth, and help them maintain their above-average dividend yields. H.J. HEINZ CO. $46 (New York symbol HNZ; Income Portfolio, Consumer sector; WSSF Rating: Above average) is one of the world’s largest producers of condiments and sauces, and accounts for 60% of ketchup sales in the United States. Other products include frozen meals, soups and baby foods. In September 2006, two nominees affiliated with billionaire investor Nelson Peltz became directors of the company after a lengthy proxy fight. Heinz has had…

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