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Just below the Prime Minister of the United Kingdom FTSE 100 the index is the FTSE 250. Is Cranwick (LSE: CWK) one of the best? Let’s take a closer look.
food maker
Cranswick is a British company supplying premium, fresh, value-added food products to a variety of markets and sectors. Some of their products include pork, poultry, pastas, cheeses, pet foods, meats, and more.
So what is the current state of Cranswick shares? As I write, they are trading at 3,546 pence. This time last year, they were trading at 2,974 pence, up 19% over a 12-month period.
The FTSE 250 index has been hit by macroeconomic volatility in recent months. This has hurt many stocks, but Cranswick shares have risen, which is a good sign.
The positives and negatives
One of Cranswick’s best upside traits is his defensive ability. This is related to the fact that food is an essential staple, as we must eat regardless of the economic prospects. This capability should help the business remain stable in terms of performance in times of volatility.
Next, Cranswick has an excellent performance record. I understand that past performance is no guarantee of the future. However, I can’t see the future. That’s why I base some of my investment decisions on a company’s performance to date. I can see that Cranswick has recorded revenue and profit growth for the last four consecutive years. This is great as it also supports growth and investor rewards.
Finally, Cranswick shares offer a dividend yield of 2.6%, higher than the FTSE 250 average of 1.9%. However, I understand that dividends are never guaranteed. Additionally, Cranswick shares are not the cheapest with a price-earnings ratio of 16. However, I am happy to buy shares of a quality company at what I consider a fair price.
To the bearish aspects then. Cranswick’s short-term challenges include rising costs and weakening demand. Rising inflation hasn’t just affected customers when it comes to buying food or paying their energy bills. Companies have to face the same challenges. When costs increase, profits decrease. If Cranswick raises its prices, it could lose customers.
Related to this, there has been an increase in the number of supermarkets and retailers offering essential ranges that are considered alternatives to premium products. This could hurt Cranswick, at least in the short term. There’s no telling when the cost of living crisis will end, so this is a topic I’ll be keeping an eye on in upcoming Cranwick business updates.
One FTSE 250 share I would buy
I think Cranswick is one of the best stocks in the UK’s second index. It has defensive attributes, good track record and reach, as well as a passive income opportunity. The company’s growth story to date is also enviable.
Next time I have some extra money to invest, I’ll buy some Cranswick shares for my holdings. In my opinion, long-term growth and profitability should supersede any short-term issues today.
