As this week started, the Dow Jones Industrial Average showed an 8% gain for stocks this year. Nearly half of that was erased during trading on Wednesday and early Thursday, yet over the past five years the Dow is up nearly 50%.
How do America’s food companies compare with the market’s overall average? The results – this week’s sell-off notwithstanding – are favorable.
Apple and Amazon have led a bull market that is well into its eighth year, and those companies have posted some interesting results. Amazon’s stock price, for instance, has increased 120,000% since its initial public offering in 1997. That means $1000 invested in Amazon 21 years ago would be worth $1,341,000 as of August 31, 2018.
No food company has performed at anything close to that level, but Tyson Foods has done well. In October 2009, a year after the Great Recession began, Tyson stock was trading at about $12 per share. In October, 2013, the stock was at $28 per share, a 130% jump in four years. In early October of this year, Tyson’s stock was trading at about $60 per share, a 115% gain over the past five years, and roughly 400% better than in 2009.
That means a $1,000 investment in Tyson stock in 2009 would have grown to about $4,000 earlier this month. (Tyson stock fell 3% on Wednesday.)
Another food company important to livestock production is McDonald’s, which has performed almost as well as Tyson. In October 2009, McDonald’s stock traded at roughly $57 per share. By October, 2013 it had increased to $95 per share, and by October of this year was trading at $165 per share, a 73% gain over the past five years. (McDonald’s stock fell 2.5% on Wednesday.)
Yum Brands, which owns KFC, Pizza Hut and Taco Bell, produced similar results to McDonald’s, up 74% over the past five years, with early October stock price of about $89 per share.
The most interesting stock review in the food category, however, belongs to Chipotle. In October of 2013 Chipotle stock traded at roughly $425 per share. Five years later it is trading at $430 a share, a minimal increase. But the ride has been nothing short of a roller coaster.
From October 2013 to October 2015, Chipotle stock increased 70% to $724 per share. Then the E. coli and salmonella outbreaks occurred and by October of 2017 Chipotle stock was at $302 per share, a 59% decline in two years. That’s why company executives are optimistic in the fall of 2018, as the current stock price of $430 per share is a 42% gain from last year. (Chipotle stock fell 3% on Wednesday.)