The Hain Celestial Group, Inc. HAIN is worth giving a shot right now as its sound fundamentals and growth efforts look impressive. Further, the Zacks Rank #2 (Buy) stock boasts a Growth Score of B.
Notably, shares of the Lake Success, NY-based company have gained 15.2% in the past six months compared with the industry’s growth of 3.1%. Meanwhile, the Consumer Staples sector has seen a decline of 0.6% during the same period.
That said, let’s delve into the factors that make Hain Celestial a promising bet.
Transformational Plan on Track
The company is progressing well with its transformation strategy for the United States, which is aimed at simplifying its portfolio, solidifying key capacities, enhancing margins, reviving top-line growth, and improving cash flows and ROIC.
It is on track to simplify its business to focus on areas with higher growth potential such as core packaged-foods business. In doing so, the company has divested loss-making brands worth almost $750 million — including Hain Pure Protein, SunSpire, Arrowhead Mills, Tilda, a significant chunk of assets related to the Plainville Farms business, and WestSoy tofu, seitan and tempeh businesses.
Project Terra: Key Growth Driver
Hain Celestial remains on track with Project Terra, which is aimed at cutting costs and complexity alongside aiding sales growth. In this regard, the company intends to optimize plants, co-packers and procurement along with rationalizing product portfolio.
Such well chalked out efforts are expected to generate worldwide cost savings worth $350 million in fiscal 2020. These savings will then be reinvested in brand development and household penetration.
Hain Celestial has been actively pursuing acquisitions to expand base in regions such as India, the Middle East and China. Some of its notable buyouts include Clarks UK, Hartley's, Gale's Robertson's, Frank Cooper's, Sun-Pat and Ella's Kitchen Group.
All said, we believe that the company’s endeavors will help it keep its solid show on.
3 Other Stocks to Consider
Tate & Lyle PLC TATYY has a long-term earnings growth rate of 1.8%. It currently sports a Zacks Rank #1 (Strong Buy).
Post Holdings POST has a long-term earnings growth rate of 7%. It flaunts a Zacks Rank #1.
Campbell Soup Company CPB has a long-term earnings growth rate of 6% and a Zacks Rank #2.