Are These The Best Consumer Stocks To Invest Right Now?
Even with fears of an oncoming recession growing, investors may not want to overlook consumer stocks just yet. For one thing, consumer stocks offer a wide range of businesses for investors to bet on. On one hand, consumer discretionary firms such as Apple (NASDAQ: AAPL) continue to reel in consumers with its latest tech offerings. On the other hand, those eyeing more defensive stocks could consider consumer staples stocks. After all, consumers tend to purchase their offerings out of necessity. Hence, the demand for these goods will, in theory, persist regardless of the current condition of the economy. Therefore, I could understand if investors are keen on consumer stocks right now.
For instance, Mondelez (NASDAQ: MDLZ) announced yesterday that it has agreed to acquire Clif Bar & Company, an energy bar producer. Basically, the company has plans to buy Clif Bar for about $3 billion to expand its global snack bar business. This acquisition deal will be the ninth deal by the company since 2018. With the addition of Clif Bar to the company’s portfolio, it is set to create a $1 billion-plus global snack bar franchise.
Another consumer-focused firm worth watching right now would be Target (NYSE: TGT). Last week, the company announced the return of its Target Deal Days event. Planned to be from July 11 to July 13, it is set to directly compete with Amazon’s (NASDAQ: AMZN) Prime Day which is held on July 12 and July 13. Furthermore, Target Deal Days do not require a membership unlike Amazon’s Prime Day deals. This could possibly make it a more attractive promotion for budget shoppers now. Knowing all of this, check out these consumer stocks in the stock market today.
Consumer Stocks For Your Watchlist Today
Kellogg Company
Starting us off today, we have Kellogg’s, a consumer company in the food manufacturing sector. It produces cereal and convenience foods, including crackers and toaster pastries. Furthermore, it has a wide portfolio of well-known brands like Corn Flakes, Pringles, and Rice Krispies among others. In 2021, the company reported net sales of over $14 billion, consisting principally of snacks and convenience foods.
Today, the company announced that its board of directors has approved a plan to separate its North American cereal and plant-based foods business. This would result in three independent public companies, each better positioned to unlock their full standalone potential. Notably, the three companies, whose names will be determined later, will be leading in the global, North America, and plant-based segments. The separation comes after many years of transformation and improving results. Additionally, the company believes that this is the time to separate these businesses as it pursues its individual strategic priorities.
“Kellogg has been on a successful journey of transformation to enhance performance and increase long-term shareowner value. This has included re-shaping our portfolio, and today’s announcement is the next step in that transformation,” said Steve Cahillane, Kellogg Company’s Chairman and Chief Executive Officer. “These businesses all have significant standalone potential, and an enhanced focus will enable them to better direct their resources toward their distinct strategic priorities. In turn, each business is expected to create more value for all stakeholders, and each is well positioned to build a new era of innovation and growth.” With that in mind, is K stock worth investing in right now?
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Procter & Gamble Company
Procter & Gamble (PG) is a multinational consumer goods corporation. It serves consumers around the world with a strong portfolio of trusted and quality brands like Oral-B, Head & Shoulders, and Ambi Pur among others. The company announced a major expansion of its sustainability efforts to make water available in critically water-stressed areas around the world. This would include a global portfolio of water restoration projects which will protect ecosystems and replenish groundwater supplies.
Recently, it received a price target of $171 per share from Deutsche Bank. Analyst Steve Powers also maintains his Buy rating of the shares. He notes that after 6 months of outperformance against consumers, difficult cost, and supply, it seems like something PG is doing something right to break into the U.S. consumer products spree. Ahead of its fourth-quarter financials in July, let’s review its third-quarter financials released in late April.
Diving in, PG posted a net sales of $19.4 billion for the quarter, a 7% increase year-over-year. It also reported a diluted earnings per share of $1.33 for the quarter, increasing 6% year-over-year. Operating cash flow was $3.2 billion for the quarter. On top of that, it also returned over $3.4 billion of cash to its shareholders. This amount comprises approximately $2.2 billion of dividend payments and $1.2 billion of common stock repurchases. The company also raised its guidance for organic sales growth from a range of four to five percent to a range of six to seven percent. All things considered, is PG stock worth investing in?
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The Coca-Cola Company
Topping our list today, we have Coca-Cola, one of the world’s largest non-alcoholic beverage companies. In fact, it has products sold in more than 200 countries and territories. In the company’s portfolio, its brands include Coca-Cola, Sprite, and Dasani. It also continues to innovate and transform its portfolio, reducing sugar in its drinks and bringing new products to the market.
Last week, the company received a new price target of $76 from Morgan Stanley (NYSE: MS). Analyst Dara Mohsenian also reiterated an Overweight rating on the company’s shares. This latest price target is based on the view that the company could well achieve an above-consensus post-pandemic topline and EPS recovery through next year. Mohsenian also pointed to new detailed analysis showing that consensus revenue remains too low on the company not only this year, but also next year.
On June 13, 2022, the company announced a global relationship with Brown-Forman Corporation (NYSE: BFA) to debut the iconic Jack & Coke cocktail as a branded, ready-to-drink pre-mixed cocktail option. The beverage will be available in markets around the world, with an initial launch planned for Mexico in late 2022. The can and packaging will feature two of the world’s most recognizable and valuable trademarks from Coca-Cola and Jack Daniel’s. Moreover, it will feature visible responsibility marks indicating that it is solely for people of legal drinking age. Given this piece of news, is KO stock a buy right now?
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