Think Americans' love of junk food won't survive GLP-1s? Don't tell that to J.M. Smucker.

The company, known for its jams and peanut butter, is making a killing on Uncrustables, a highly processed, frozen version of the humble PB&J. Annual sales recently topped $1 billion and now account for more than 10% of Smucker's $8.9 billion in annual revenue.

Investors are eating up Uncrustables, too. Wall Street expects Smucker's earnings to rise 10% in 2027. The frozen PB&J is doing much of the lifting and has helped Smucker's stock gain 20% this year.

Most Big Food stocks are giving investors indigestion. Companies like Kraft Heinz, Campbell's, General Mills, and Conagra Brands have been hit by a confluence of pressures: GLP-1s curbing appetites, higher food and energy costs, and increased competition from store brands like Costco Wholesale's Kirkland.

Those issues are well known, however, and the food bin has some bargains. Companies like Smucker are worth considering. Others include PepsiCo, Keurig Dr Pepper, Danone, and Mondelez International.

Shares of those companies look inexpensive and pay dividends that shouldn't succumb to the belt tightening at other firms. Some have turnarounds that could pay off or other measures that could help boost earnings. Activists like Elliott Investment Management and Starboard Value also see bargains, taking stakes in Pepsi, Keurig, and Smucker.

The companies aren't immune to the problems in the packaged-food aisles. Higher fuel costs have pushed up distribution costs just as inflation-weary consumers cut back on spending for snacks like chips and cookies. Higher prices for key ingredients like coffee and cocoa are taking a toll on margins.

But the stocks may now be cheap enough to fully discount those pressures. And investors can profit by focusing on companies rolling out new products that customers actually want, rather than getting distracted by short-term sales volume or marketing goals, according to RBC Capital Markets analyst Nik Modi: "We say, 'Which companies are actually paying attention to the consumer?' You can see a bifurcation in performance based on that."

PepsiCo

Coca-Cola's stock has pulled ahead of Pepsi's lately. But the latter may be the better value if the company can orchestrate a turnaround in its snack food segment.

Soft drinks aren't the problem for PepsiCo. Its North America and international beverage divisions are chugging along, fueled by core soda sales, along with energy drinks like Gatorade and prebiotic soda Poppi, which Pepsi acquired for nearly $2 billion last year.

The snack business remains an albatross. PepsiCo disappointed investors in its latest quarter when its North American snacks failed to show growth. Its stock, trading near 52-week lows around $138 and down 4% this year, reflects investor skepticism that the company will revive snack sales and margins.

Investors like Elliott, which has a $4 billion stake in Pepsi, appear willing to stick around. Elliott struck an agreement with PepsiCo in December to cut costs by streamlining its product roster and to improve recipes by including fewer artificial ingredients. PepsiCo recently overhauled Lay's packaging and ingredients, and cut prices on Doritos and other key snacks by up to 15%.

Analysts see slim sales growth for PepsiCo over the next couple of years, though earnings are forecast to rise around 5% annually. If PepsiCo can fix its snacks business, the stock could fetch a higher multiple, says Goldman Sachs analyst Bonnie Herzog.

She notes that Pepsi's price/earnings ratio of 16 is well below Coke's 24, one of the biggest gaps in years. "It's just too wide," she says. "You don't need Pepsi to trade at a Coke multiple. You just need the gap to narrow." She has a Buy on the stock with a price target of $180, about 29% above its recent $140.

Keurig Dr Pepper

The good doctor is attempting some corporate jujitsu. The company plans to create a separately traded coffee giant by combining its assets with JDE Peet, a company it recently acquired for $18 billion. The soda business, anchored by Dr Pepper, would then be a stand-alone stock. Keurig plans to complete the split in 2027.

Investors aren't buying into it. The stock has been flat for over a year, reflecting concerns about the cost and complexity of the split. Adding to the uncertainty, Peet's CEO, whom Keurig had tapped to run the coffee company, left to take the helm at Heineken.

Investors such as Starboard, however, appear to be backing the plan. Starboard took a stake in Keurig in the fall; both companies declined to comment. Private-equity firms Apollo Global Management and KKR also invested, providing $7 billion in financing to help Keurig reduce leverage following the JDE Peet deal.

The company's soda business is thriving. Dr Pepper recently eclipsed Pepsi and Diet Coke to become America's No. 2 soda, after regular Coca Cola. The beverage division grew revenue 10% year over year for the second quarter.

Keurig's coffee business has struggled and faces margin pressure from high bean prices. But Matthew Hand, portfolio co-manager of the Vanguard Equity Income fund, sees value in the stock.

The soda business generates solid organic sales growth and "has enough scale to operate well on its own," he tells Barron's. As a stand-alone entity, it could fetch a multiple between Coca-Cola's 24 and PepsiCo's 16, well above Keurig's current P/E ratio of 13 times. The coffee business could benefit from the scale added by Peet's and diversification across geographies and coffee segments, he adds.

"Basically, KDP trades like a challenged, low-growth staples company, despite the fact that a majority of their Ebitda is in a high-performing business that is doing well," Hand says, referring to earnings before interest, taxes, depreciation, and amortization.

J.P. Morgan analyst Andrea Teixeira pegs Keurig's share value at $38, about 30% above the current price. Teixeira estimates the soda side is worth 17.4 times estimated 2028 earnings per share of $1.49, valuing the business at $26 a share. She thinks the coffee business is worth 9.4 times estimated EPS of $1.32, for a value of $12 a share.

Mondelez

This global giant sells snack foods and candy, from Ritz crackers to Milka chocolate. Weakness in North America has been a drag on earnings. But North America accounts for 25% of sales, while faster-growing emerging markets are nearly 40%, giving the company a big growth avenue.

Mondelez's organic sales in Latin America surged 8% this past quarter and the company's Asian division grew 7% year over year. Its products are now sold in one million stores in Brazil and the company recently added 100,000 stores in India, noted CEO Dirk Van de Put on the July earnings call. "The categories are still very underpenetrated," he said.

Strength overseas allowed the company to hike its 2026 organic revenue outlook to at least 2% from flat. Mondelez also confirmed its outlook for $3 billion in free cash flow, which should be enough to cover its $2.5 billion annual dividend.

Surging cocoa prices have pressured margins; cocoa went from $2,500 a ton in 2023 to more than $10,000 in 2025. Prices have since settled around $6,000, which should help margins improve.

Analysts expect earnings growth of 4% in 2026 and 10% in 2027. Jefferies analyst Scott Marks rates the stock a Buy, with $73 target, based on improving sales and margins. The company is well positioned to recover cost inflation and grow faster than peers, he wrote in a note.

Smucker

The company is trying to overcome its ill-fated acquisition of Hostess, a $5.6 billion deal that has weighed on earnings and pushed up debt since it closed in 2023. The company's U.S. coffee line, which includes Folgers, has also struggled amid high commodity costs.

Still, Smucker is navigating the tricky environment with hits like Uncrustables and its fast-growing Cafe Bustelo, which saw sales surge 39% in the past year.

An agreement with Elliott in February added two directors to Smucker's board, with an aim to boost sales and focus on more-disciplined capital spending.

Smucker's debt-to-Ebitda ratio stands at a historically high 3.8 times. The company plans to pay down about $500 million in debt in the current fiscal year, pushing the ratio to a target of three times by next summer.

Analysts forecast earnings growth of 10% for the current fiscal year, reaching just over $10 a share.

John Rogers, co-manager of the Ariel Fund and a Barron's Roundtable member, has been buying the stock. He likes Smucker's 3.8% dividend yield and low forward P/E of 12. Wall Street hasn't forgiven Smucker for the Hostess deal, he says, even though recent packaging upgrades and efforts to solve distribution problems have stabilized the situation.

Rogers pegs the stock's fair value at $135, up from recent price around $118. Shares could rally further if Smucker unloads Hostess, which would free up cash to pay down more debt and buy back shares. "If they're able to streamline and successfully execute the divestiture, I think you get even more optimistic," he says. Smucker declined to comment.

Danone

Shares of the yogurt king are down 11% this year, in part because of an infant formula recall that affected batches in Europe and the Middle East.

But Danone estimated its effect at just 0.5% to 1% of first-quarter sales. Overall, organic sales rose 3.5% in the first half, and Danone forecasts sales growth of 3% to 5% for the rest of 2026.

In the long run, infant and medical formula should be a growth area, as should yogurt, says Julien Albertini, deputy head of First Eagle Investments' global value team.

Yogurt could be a GLP-1 winner. Research shows GLP-1 patients crave more yogurt. That helped Danone's protein-fortified Oikos Pro line hit one billion euros in U.S. sales last year, or about $1.2 billion. The company recently upped its Oikos' manufacturing capacity with a 48,000-square-foot expansion of its Ohio plant.

Albertini thinks expanded output should boost sales volumes and improve yogurt margins, which are lower than at Chobani and Fage, according to First Eagle's research.

Wall Street expects the stock, with a P/E ratio around 17, to deliver earnings growth of 7% to 8% in 2027 and 2028. The average price target of $80 implies gains of about 14% from the recent price of about $70.

"We have pretty good, high visibility into the earnings growth, and you get a dividend, too," Albertini says. "It's not Micron, but it's very simple and very defensive."