Seven Consumer Goods Stocks Analysts Are Bullish On For 2014
Markets have had a heck of a year. The unemployment rate has ticked down and the uncertainty about when the Fed's quantitative easing will begin to taper is over.
And the prospects for Europe and China are looking better. Though analysts do not expect another banner year for stocks, and some are even warning of a sizable correction, they remain optimistic about certain stocks.
Here is a quick look some dividend payers in the consumer goods sector that have a consensus recommendation of analysts of Strong Buy. Furthermore, based on their mean price targets, analysts see more than 10 percent potential upside in these stocks, relative to their current share prices.
Shares of British American Tobacco (NYSE: BTI) have pulled back more than five percent since the beginning of November, but the share price turned upward again last week. Analysts anticipate continued growth of both revenue and the dividend yield.
This London-based maker of Lucky Strike cigarettes and other tobacco products has a dividend yield near 2.8 percent and a market capitalization of more than $99 billion. Its return on equity is more than 94 percent. Over the past six months, the stock has outperformed competitor Philip Morris.
Shares of Diageo (NYSE: DEO), maker of Baileys Irish Cream and Guinness stout, have struggled to recapture the 52-week high reached in September. The share price is up more than nine percent over the past year, and the more than $78 billion market cap company is expected to see almost eight percent revenue growth for this fiscal year and more than nine percent in the next.
The London-based wine and spirits company has a dividend yield of about 2.9 percent and a price-to-earnings (P/E) ratio that is less than the industry average. Over the past six months, the stock has outperformed competitor Brown-Foreman but underperformed Constellation Brands.
Movado (NYSE: MOV) has pulled back about six percent from the multiyear high back in early November. But the share price still is nearly 50 percent higher than a year ago. The maker of fine watches posted better-than-expected results in its most recent quarterly report.
This company is headquartered in Paramus, New Jersey, and has a market cap near $1 billion. The dividend yield is about 0.7 percent, and the long-term earnings per share (EPS) growth forecast is about 12 percent. Over the past six months, the stock has outperformed luxury goods makers Tiffany and Coach.
The share price of Sony (NYSE: SNE) has retreated almost six percent in the past month, though it is still up more than 52 percent year to date. The recently launched PlayStation 4 has been well reviewed and sales have been strong despite competition from the recently launched Xbox One.
The $18 plus billion market cap company has a dividend yield near 1.4 percent. Its long-term EPS growth forecast is more than 55 percent, though its return on equity is only about three percent. Over the past six months, Sony has underperformed the likes of Apple and the broader markets.
Steelcase (NYSE: SCS) shares have traded mostly between $15.00 and $16.50 since mid-September. The share price is more than 27 percent higher than it was a year ago. Revenue growth at this Grand Rapids, Michigan-based company was better than expected in last week's quarterly report.
This maker of business furniture and interior architectural products has a market cap near $2 billion and a dividend yield of about 2.6 percent. The long-term EPS growth forecast is about 20 percent. The stock has underperformed the S&P 500 over the past six months.
Tata Motors (NYSE: TTM) is up almost 28 percent from six months ago, despite a six percent pullback in the past two weeks. This Mumbai, India-based automaker recently said that sales at its Jaguar and Land Rover units was strong in November, especially in China.
Tata Motors has a dividend yield of about 0.4 percent and a market cap of more than $19 billion. While the P/E ratio is less than the industry average, the operating margin is greater. The stock has outperformed competitors Ford, General Motors and Toyota over the past six months.
Shares of Thor Industries (NYSE: THOR) are more than 12 percent lower than the 52-week high back in October. But the share price is still up more than 35 percent year to date. The recent rebound in sales of recreational vehicles has been good for this Indiana-based bus and RV maker.
Also a maker of trailers and ambulances, the company has a market cap of less than $3 billion. Its dividend yield is about 1.3 percent, and the P/E ratio is lower than that of rival Winnebago. However, over the past six months, the stock has underperformed Winnebago and the S&P 500.
At the time of this writing, the author had no position in the mentioned equities.
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