What’s better than Greggs shares for 2026?

Should you observe my work or my social media accounts, you’ll know that I’m not the most important fan of Greggs (LSE:GRG) shares. I don’t suppose the inventory is vastly overvalued at the moment — I used to — however I’m additionally undecided what going to tug the inventory greater.

Taking a fast snapshot, it’s at present buying and selling round 13.2 instances ahead earnings and it has a price-to-earnings-to-growth (PEG) ratio of three.2. That’s not nice, nevertheless it’s barely higher if you issue within the 4% dividend yield.

In different phrases, it’s a really middling inventory. The yield is first rate, however the remainder of the valuation isn’t notably sturdy. The steadiness sheet is beginning to look a little bit regarding, nonetheless, with internet debt representing 25% of the market cap.

Is it a top quality inventory? Nicely, it has nice model energy and it’s virtually all over the place within the UK. However probably not. It makes sausage rolls, not extremely technical engine elements.

Briefly, I’m saying I’m not anticipating there to be a large uptick in demand or margins right here. And basically that’s what must occur to make this valuation make sense for me.

Because it stands, the forecasts present unfavourable earnings development when averaged throughout the following two years.

So, what’s higher worth?

Actually, there are quite a lot of shares that I believe are higher worth. However I’m going to stay with client items and decide Contemporary Del Monte (NYSE:FDP). Sure, the fellows who make the pineapple chunks — and many different issues.

It’s a US-listed inventory because the ticker suggests, and easily, I desire it. It’s one of many to- ranked shares in line with a number of quantitive fashions, scoring excessive on valuation, high quality, and momentum.

Firstly, it’s cheaper than Greggs, buying and selling at 12.2 instances ahead earnings. It’s additionally rising earnings sooner, with an anticipated earnings development price round 9%.

This provides us a PEG ratio round 1.4 instances, which, when mixed with a 3.2% dividend yield, I believe is sweet worth. That sense of worth is bolstered by sturdy price-to-sales and price-to-free-cash-flow ratios.

It’s additionally acquired a a lot stronger steadiness sheet. The corporate’s internet debt is round $81.1m, which actually isn’t an excessive amount of of a priority for an organization price $1.4bn. For the sake of comparability, that’s round 6% of the market cap — a a lot safer place than Greggs.

I additionally like that it owns huge swathes of land, giving it a tangible asset base that underpins long-term worth. Land tends to carry its price even in unstable markets, offering a level of safety alongside development potential.

The dangers are broad, together with publicity to local weather and climate shocks, provide chain disruptions, regulatory and meals issues of safety, international competitors, and fluctuations in commodity costs.

Nevertheless, I nonetheless suppose it is a higher choice than Greggs, and one which must be thought-about by development or dividend-focused traders.