It’s tough to deny Gen Z’s disruptive role in the investing realm these days. The digital-savvy generation is rewriting the investment playbook, betting on meme-driven, sustainable, ethical investments and disrupting traditional financial models. With that in mind, adding the best vegan stocks to buy wouldn’t be too shabby.
Studies have shown that a significant majority of young consumers prefer plant-based options. Hence, companies that benefit from the vegan movement are set for robust long-term gains. With Gen Z’s commitment to sustainability, wagering on these three vegan stocks could offer both ethical alignment and financial gains ahead.
Investing in these businesses offers healthy prospects within the vegan market due to their consistent top-line growth and dominance in niche sectors like coconut water. Each company has been delivering solid operating results of late, making notable strides in bottom-line expansion. Hence, their market leadership and recent fundamental achievements highlight their potential for long-term growth and rewarding shareholder returns.
Best Vegan Stocks to Buy: Laird Superfood (LSF)
Laird Superfood (NYSEAMERICAN:LSF) has effectively carved a niche in the burgeoning plant-based food industry, serving a variety of natural and functional products from coffee creamers to beverage-enhancing supplements. Its diverse product lineup appeals to a range of customers, from turmeric coffee creamers to performance-enhancing mushrooms.
Like its peers, it has had a rough couple of years with the normalization of vegan trends. However, its debt-free status and growing margins indicate that a comeback is in motion. The results of its multi-year strategic turnaround, Laird Superfood’s first-quarter (Q1) results, are a testament to its powerful growth strategy.
It posted a stellar 22% increase in net sales, which its management claims stands out among its peers in the food industry. Moreover, it recorded double-digit growth across all its sales channels. Additionally, it maintained a solid 40% gross margin for the second consecutive quarter. Hence, despite being a speculative play, Laird is on a positive trajectory, potentially offering long-term upside ahead.
Vita Coco (COCO)
Vita Coco (NASDAQ:COCO) is another top vegan play, and it’s easily the best pick from the list. That’s because it continues growing rapidly as its stock racks up fresh highs. The company focuses on coconut water-based beverages, which boast natural hydration and rich nutrients. Moreover, it dominates the coconut water market with a 50% market share, offering a unique proposition from mainstream competitive sports and energy drinks. Also, it’s a hit with health-conscious consumers and athletes providing a laundry list of post-exercise recovery benefits.
On the financial front, it continues to impress, with year-over-year (YOY) growth in sales and EBITDA at 12.3% and 186%, respectively. Consequently, its free-cash-flow base has swelled from a negative $19.3 million to a whopping $88.2 million on a trailing 12-month (TTM) basis.
Additionally, Vita Coco recently partnered with British alcohol giant Diageo (NYSE:DEO) as it ventures into the fast-growing ready-to-drink alcoholic beverage sector. This expansion adds a remarkable new dimension to Vita Coco’s growth trajectory, enhancing its long-term appeal.
Calavo Growers (CVGW)
Calavo Growers (NASDAQ:CVGW) distributes avocados and other perishable plant-based foods. Focusing on global retail grocery and food service customers, the company efficiently capitalizes on the increasing shift toward vegan-friendly food options.
To be fair, it hasn’t been the most rewarding of vegan stocks, but recent results suggest it’s turning a corner. Its second-quarter (Q2) results saw a healthy earnings beat due to improved margins in the core avocado business. Particularly, average selling prices of avocados in the grown segment increased by 28% compared to the prior-year period. Moreover, its tomato portfolio also improved sequentially and on a YOY basis. Additionally, its management highlighted improvements in its guacamole business through favourable input costs and operational efficiency.
Furthermore, adjusted net income was $8.9 million, compared to $5.1 million last year. Its adjusted EBITDA of $13.4 million improved from $9.9 million the prior year. It’s also worth noting that CVGW announced a 10-cent per share quarterly dividend, which now yields 1.6%.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.