Maple Leaf Foods (TSX:MFI) is a Canadian consumer packaged meats company that has made an aggressive push into plant-based alternatives. The early success of this strategy has yielded some positive price action for the stock in 2019. However, the stock was hit hard by a disappointing third quarter earnings report.
Shares of Maple Leaf have dropped 18% over the past three months as of close on December 17. The company has been negatively impacted by what it called “erratic” pork market conditions. It has also been burdened by its large investment into plant-based proteins, though this latter point is expected to pay off in the long term.
The trade war between the United States and China has been damaging for the global economy. Unsurprisingly, Canada has been sucked into the whirlwind. China is the largest consumer of pork in the world. A pig pandemic was reported as potentially catastrophic back in October, and Maple Leaf has been adversely impacted by the Chinese import suspension of Canadian pork.
Investors finally received goods news on the trade front in December as the U.S. and China appear to be on the verge of a trade deal, limited though it may be. An easing of tariffs should provide a boost to companies like Maple Leaf.
Shares of Maple Leaf are trading at the low end of its 52-week range.
The stock also offers a quarterly dividend of $0.145 per share, representing a 2.2% yield.
I love Maple Leaf’s investment in plant-based proteins, and the pending trade deal between the U.S. and China is worth getting excited about. I’m targeting Maple Leaf stock in December.