Black Friday is the traditional start to the holiday shopping season, but it will not be just holiday shoppers who are searching for bargains starting next week. With U.S. markets at or near record highs, investors are no doubt keeping an eye out for bargains as well.
Analysts on average see more than 10 percent upside potential in the following five consumer goods stocks and rate them highly.
- Brunswick Corporation BC
- Goodyear Tire & Rubber Co GT
- La-Z-Boy Incorporated LZB
- Thor Industries, Inc. THO
- Tyson Foods, Inc. TSN
These U.S.-based dividend payers all have price-to-earnings (P/E) ratios less than their respective industries, the long-term earnings per share growth forecasts of 11 percent or more, returns on equity of more than 13 percent and bullish indications in their moving averages to some degree.
Brunswick
Barron's recently made the case for shares of this marine recreational products maker to rise 20 percent. It has a market capitalization of more than $4 billion. Its return on equity is more than 85 percent, while the operating margin is greater than the industry average. The dividend yield is near 1.0 percent.
All but one of the 11 analysts surveyed by Thomson/First Call recommend buying shares, with four of them rating the stock at Strong Buy. The share price is up more than 21 percent since the October sell-off, and both the 50-day and 200-day moving averages have been rising in the past few weeks.
Goodyear
This more than $7 billion market cap tire maker posted better than expected third-quarter earnings, due in part to lower materials costs. Goodyear has a dividend yield of about 0.9 percent. The return on equity is more than 44 percent, and here too the operating margin is greater than the industry average.
The consensus recommendation is to buy Goodyear shares, as it has been for at least three months. The mean price target is more than 11 percent higher than the current share price, even after a more than 27 percent rise in the stock in the past month, when shares were near the 52-week low.
La-Z-Boy
The furniture maker also beat third-quarter earnings estimates, and it raised its quarterly dividend by a third. The dividend yield is about 1.3 percent, and the market cap is less than $1.5 billion. Its EPS growth forecast is about 16 percent, and the operating margin is higher than the industry average.
All of the six surveyed analysts recommend buying shares, with five of them rating the stock at Strong Buy. Despite about a 31-percent rise from the 52-week low during the October sell-off, the share price is still down about 18 percent year to date. Analysts see more than 12 percent further upside.
Thor Industries
A recent 17-percent dividend hike helped boost the shares of this manufacturer of recreational vehicles. It sports a market cap of about $3 billion and offers a dividend yield of about 1.9 percent. The long-term EPS growth forecast is about 20 percent, and the return on equity is more than 19 percent.
All but one of the eight analysts surveyed recommend buying shares, with five of them rating the stock at Strong Buy. The share price is up more than 13 percent in the past month, compared to more than 8 percent for the S&P 500. A move to the mean price target would be a further 15 percent gain.
Tyson Foods
This meat producer has a market cap of less than $16 billion. It posted record quarterly sales last week, despite ongoing issues in China. The long-term EPS growth forecast is about 19 percent, and the forward earnings multiple is less than the trailing P/E ratio. Note that short interest is almost 10 percent of the float.
Ten analysts were polled, and all but two recommended buying shares. Shares are up more than the S&P 500 average in the past month and more than 26 percent higher year to date. Analysts see a further nearly 14 percent gain. The 50-day moving average recently broke above the 200-day moving average.
At the time of this writing, the author had no position in the mentioned equities.
image credit: Alan Cleaver, Flickr
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