Investing in vegan stocks hasnt been an easy decision. Much like cannabis stocks and, to a lesser extent, electric vehicle stocks, investing in a future that seems certain can be elusive.

There are benefits of a plant-based diet that shouldnt be ignored at a time when weight-loss drugs are all the rage. Those benefits are more likely to drive this sectors growth than concerns over sustainability. But the latter is where most of the marketing effort focuses.

However, regardless of the reason, acceptance of this kind of diet ultimately comes from the product itself. How does it taste? Is it affordable? For the most part, the industry has conquered the first question. Its the second question that remains a challenge, particularly at a time when consumers are trying to make their food dollars stretch further.

That brings to light another lesson about investing in vegan stocks, particularly pure-play stocks. That is, revenue is only a starting point. To their credit, many of these companies have revenue coming in. But positive, growing earnings are the fuel for stock price growth. And many of these companies are still years away from being profitable. Some have filed for bankruptcy or carry a significant risk of that fate.

Then theres the fact that many pure-play companies in this sector, like Impossible Foods, are private companies that therefore are not publicly traded. Its a tricky sector, but one that may still have upside for patient investors. Here are three vegan stocks that maygive you different ideas for investing in the sector.

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Investing in Kroger (NYSE:KR) is likely the safest of the vegan stocks on this list. In addition to carrying plant-based foods from other companies, the company has its own private label, Simple Truth, which has a range of plant-based alternatives. Theres ample evidence that consumers are trading down to house brands to combat food inflation.

Plus, the grocery giant has over 2,800 locations in 35 states. Thats a solid base if the goal is broad acceptance. And it will nearly double once the companys planned merger with Albertsons (NYSE:ACI) which should be complete sometime in 2024.

KR stock is up just 1.23% in 2023 with just a few days left to trade as of this writing. When you look at the companys earnings report, you can see why the stock is a laggard. The results arent bad, theyre just not exciting.

However, investors may be overlooking the companys gross margin which increased by 300 basis points when the company reported earnings in November 2023. The company also strengthened its balance sheet by suspending share repurchases to build cash, pay dividends and keep its debt manageable.

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Ingredion (NYSE:INGR) gives investors another way to invest in vegan stocks. The company isnt a pure play on the sector. In fact, its best known for starches and sweeteners. But Ingredion is increasing its selection of plant-based proteins that help provide plant-based meat and dairy alternatives. Increasing the protein content of plant-based foods is considered to be one of the factors that will drive future revenue.

To that end, in 2021, Ingredion opened a facilityfocused on producing pea protein isolate and pea starch. It was the first-of-its-kind in North America and positions the company as a future leader in the sector.

INGR stock is up about 11.76% in 2023 with most of that gain coming in the market rally in November and December. That is discounting the companys strong earnings growth in 2023 which is still expected to grow around 4% in the next 12 months. Plus, investors get a dividend with a 2.87% yield that has been growing for the last 13 consecutive years.

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If you have a speculative itch to scratch when it comes to plant-based stocks, Oatly (NASDAQ:OTLY) may be a good choice. Oatly is a Swedish company that uses oats to produce dairy alternatives. One of its more common products is oat milk.

This is a small company with a $768 million market cap as of December 27, 2023. Its also a company that just over a month ago was trading for under one dollar.

However, OTLY stock is up about 45.88% in the last month of 2023. Any move of that type is worth exploring. In this case, it appears that analyst sentiment has improved. The consensus price target of $2.06 is 58% higher than the current price. And out of eight analysts offering ratings, three give it a Strong Buy rating.

Like any stock that is not profitable and generates only about $750 million in sales, there is a risk of bankruptcy with Oatly. The compelling news is that revenue is increasing, and the company is moving close to profitability. Its still a risk, but with a strong upside, it may be a risk worth taking.

On the date of publication, Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

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Vegan Stocks to Watch: 3 Players Leading the Plant-Based Revolution - InvestorPlace