Sign In  |  Register  |  About Walnut Creek Guide  |  Contact Us

Walnut Creek, CA
September 01, 2020 1:43pm
7-Day Forecast | Traffic
  • Search Hotels in Walnut Creek Guide

  • CHECK-IN:
  • CHECK-OUT:
  • ROOMS:

3 Must-Buy Consumer Good Stocks

Consumers seem to be resilient in the face of macroeconomic headwinds. Given stable demand, investors might consider buying consumer goods stocks Unilever (UL), Kimberly-Clark (KMB), and Henkel AG (HENKY). Read on...

Despite economic uncertainty and the possibility of a recession, the consumer goods industry will likely remain steady amid technological advancements and increased consumer awareness. So, quality consumer goods stocks Unilever PLC (UL), Kimberly-Clark Corporation (KMB), and Henkel AG & Co. KGaA (HENKY) could be wise additions to your portfolio.

Consumer spending is resilient in the face of still-high inflation and rising borrowing costs. Retail sales rose 0.3% in May from the prior month. According to the National Retail Federation, retail sales will increase between 4% and 6% in 2023.

Moreover, the global consumer goods industry is expected to grow to $224.33 billion by 2032 at a CAGR of 7.8%, as the markets are adapting to changing trends, pushed by digital innovation, the pandemic, and a focus on sustainable living.

In addition, the Fast Moving Consumer Goods (FMCG) and Consumer Packaged Goods (CPG) market is expected to grow between 2023 and 2030 at a CAGR of 7.5%.

Investors’ interest in consumer goods stocks is evident from the iShares U.S. Consumer Goods ETF’s (IYK) 10.2% returns over the past nine months.

Take a detailed look at the stocks mentioned above:

Unilever PLC (UL)

Headquartered in London, the United Kingdom, UL operates as a fast-moving consumer goods company. It operates through Beauty & well-being, Personal Care, Home Care, Nutrition, and Ice Cream segments.

UL’s trailing-12-month ROCE of 42.31% is 315.9% higher than the industry average of 10.17%. Its trailing-12-month levered FCF margin of 12.44% is 317.4% higher than the industry average of 2.98%.

UL has paid dividends for 12 consecutive years. Over the last five years, UL’s dividend payouts have grown at a 0.26% CAGR. While UL’s four-year average dividend yield is 3.50%, the company’s annual dividend of $1.88 yields 3.68% at the current price level.

UL’s turnover for the first quarter ended March 31, 2023, increased 7% year-over-year to €14.75 billion ($16.04 billion). Its underlying sales growth came in at 10.5%. Its Beauty & Wellbeing turnover increased 13.3% year-over-year to €3.09 billion ($3.36 billion). Also, its Home Care turnover increased 8.6% year-over-year to €3.35 billion ($3.30 billion).

The consensus revenue estimate of $65.38 billion for the year ending December 2023 represents a marginally increase year-over-year. Its EPS is expected to grow 5.1% year-over-year to $2.90 for the same period. UL’s shares have gained 18.3% over the past nine months to close the last trading session at $51.15.

UL’s POWR Ratings reflect this promising outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

UL has a B grade for Stability, and Value. It is ranked #11 out of 54 stocks in the Consumer Goods industry. Click here for the additional POWR Ratings for Growth, Sentiment, Momentum, and Quality for UL.

Kimberly-Clark Corporation (KMB)

KMB manufactures and markets personal care and consumer tissue products worldwide. It operates through three segments, Personal Care, Consumer Tissue, and K-C Professional.

KMB’s trailing-12-month levered FCF margin of 9.78% is 228% higher than the 2.98% industry average, while its trailing-12-month ROCE of 277.67% is significantly higher than the industry average of 10.17%.

KMB has paid dividends for 50 consecutive years. Over the last five years, KMB’s dividend payouts have grown at a 3.5% CAGR. While KMB’s four-year average dividend yield is 3.27%, the company’s annual dividend of $4.72 yields 3.49% at the current price level.

For the fiscal first quarter ended March 31, 2023, KMB’s net sales increased 2% year-over-year to $5.20 billion. Its cash provided by operations increased 200.5% year-over-year to $613 million. The company’s net income attributable to KMB’s increased 8.2% over the prior-year quarter to $566 million. Also, its EPS came in at $1.67, representing an increase of 7.7% year-over-year.

Street expects KMB’s revenue to increase 2.4% year-over-year to $20.66 billion for the year ending December 2023. Its EPS is expected to grow 11.2% year-over-year to $6.26 for the same period. It surpassed EPS estimates in three of four trailing quarters. Over the past nine months, the stock has gained 22.7% to close the last trading session at $135.18.

It’s no surprise that KMB has an overall B rating, equating to a Buy in our POWR Ratings system. It has a B grade for Value, Stability, and Quality. It is ranked #9 in the same industry.

Beyond what is stated above, we’ve also rated KMB for Growth, Sentiment, and Momentum. Get all KMB ratings here.

Henkel AG & Co. KGaA (HENKY)

Headquartered in Düsseldorf, Germany, HENKY, together with its subsidiaries, engages in the adhesive technologies, beauty care, and laundry and home care businesses worldwide.

HENKY’s trailing-12-month net income margin of 5.62% is 78.2% higher than the industry average of 3.16%. Its trailing-12-month gross profit margin of 42.30% is 34.9% higher than the industry average of 31.36%.

HENKY has paid dividends for ten consecutive years. Over the last five years, HENKY’s dividend payouts have grown at a 3.5% CAGR. While HENKY’s four-year average dividend yield is 2.58%, the company’s annual dividend of $0.50 yields 2.96% at the current price level.

HENKY’s sales increased 11.6% year-over-year to €22.40 billion ($24.14 billion) in the year ended December 31, 2022. Its gross profit increased 4.4% year-over-year to €9.37 billion ($10.09 billion).

Also, its total current assets came in at €10.43 billion ($11.23 billion) for the period that ended December 31, 2022, compared to €10.41 billion ($11.22 billion) for the period that ended December 31 2021. Also, its current liabilities came in at €9.15 billion ($9.86 billion), compared to €9.27 billion ($9.99 billion) for the same period.

Analysts expect HENKY’s revenue to increase marginally year-over-year to $24.11 billion for the year ending December 2024. The stock has gained 20.6% over the past nine months to close the last trading session at $17.11.

HENKY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which equates to a Buy in our proprietary rating system.

It is ranked #7 in the same industry. It has an A grade for Stability and a B for Growth. To see additional HENKY ratings for Momentum, Sentiment, Value, and Quality, click here.

What To Do Next?

Get your hands on this special report with 3 low priced companies with tremendous upside potential even in today’s volatile markets:

3 Stocks to DOUBLE This Year >


UL shares were trading at $51.17 per share on Tuesday morning, up $0.02 (+0.04%). Year-to-date, UL has gained 3.42%, versus a 16.09% rise in the benchmark S&P 500 index during the same period.



About the Author: Rashmi Kumari

Rashmi is passionate about capital markets, wealth management, and financial regulatory issues, which led her to pursue a career as an investment analyst. With a master's degree in commerce, she aspires to make complex financial matters understandable for individual investors and help them make appropriate investment decisions.

More...

The post 3 Must-Buy Consumer Good Stocks appeared first on StockNews.com
Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.
 
 
Copyright © 2010-2020 WalnutCreekGuide.com & California Media Partners, LLC. All rights reserved.