Lower costs put them on a better path

Article Excerpt

The long-term outlook for these two leading food makers remains solid. Their strong brands are also making it easier for them to raise selling prices to cover rising costs. However, the shares of both companies will likely remain in a narrow range while they restructure their operations. MAPLE LEAF FOODS INC. $24 is still a hold. The company (Toronto symbol MFI; Conservative Growth Portfolio, Consumer sector; Shares outstanding: 124.9 million; Market cap: $3.0 billion; Price-to-sales ratio: 0.7; Dividend yield: 3.3%; TSINetwork Rating: Average; www.mapleleaffoods.com) sells fresh and prepared meats under the Maple Leaf and Schneider labels. In the past few years, Maple Leaf has acquired firms that make plant-based hamburgers, hot dogs and other protein products under the Lightlife and Field Roast brands. However, sales of plant-based products have not met Maple Leaf’s expectations. As a result, the company has written down the value of this business by $190.9 million. Separately, it also wrote down its hog stocks by $31.5 million. Due to those charges, Maple Leaf…