Higher food prices improved the gross profit margin of food companies worldwide. Here are three names to consider: Whole Earth Brands, Seneca Foods, and AgroFresh Solutions. 

The COVID-19 pandemic has led to supply bottlenecks that triggered rising inflation worldwide. Prices of goods and services shot up also fueled by monetary and fiscal easing policies adopted by most central banks.

One of the areas where inflation surprised markets was food. Food prices, as measured by the Food and Agriculture Organization’s Food Price Index, doubled during the pandemic, leading to improved profit margins for food companies.

Here are three food companies to buy in 2022: Whole Earth Brands, Seneca Foods, and AgroFresh Solutions.

Whole Earth Brands

Whole Earth Brands is a packaged foods and meats company from Chicago, Illinois. It employs close to 600 people and its stock price is almost flat on the year (FREE).

The forward P/E Non-GAAP ratio is 18.40, lower than the sector median by -4.84%, and it operates with a gross profit margin of 34.56%. All seven analysts monitoring the company’s stock price have issued buy ratings, with the highest price target being $23.

Most recently, Cowen and Company maintained its buy rating with a price target of $16, and ROTH Capital Partners did the same, with a price target of $20.

Seneca Foods

Seneca Foods is an American company active in the consumer staples sector. Founded in 1949 and headquartered in Marion, New York, Seneca Foods is a company with an enterprise value of $625.01 million and a market capitalization of $414.26 million (SENEA).

It provides packaged fruits and vegetables and serves customers in 90 countries worldwide. The stock price is up 20.35% YTD, and the company operates with a gross profit margin of 15.11%.

AgroFresh Solutions

AgroFresh Solutions is an American company active in the fertilizers and agricultural chemicals industry. Based in Philadelphia, Pennsylvania, it focuses on the extension of the shelf life of fresh produce and employs over 300 people (AGFS).

The company operates with a gross profit margin (TTM) of 71.49%, much higher than the 30.50% sector median. In 2021, the stock price declined by more than 11%, and the current market capitalization is $104.69 million.