4 Consumer Stocks To Consider Buying As Summer Nears
Consumer stocks have been a mixed bag for investors in the stock market. Of course, the coronavirus pandemic has wreaked havoc on many businesses. As bad as these impacts could be, there are always a few that would outperform its industry peers. That means there are still opportunities in the consumer sector. Sometimes, they are just harder to find. Admittedly, the coronavirus pandemic has had a devastating effect on the economy over the past year as many lost their jobs, and there was a growing list of retail bankruptcies.
Fortunately, we saw the ramp-up of vaccination efforts and a string of stimulus aids by the government. Many analysts are far more optimistic about our current state of the economy than just a few months ago. Judging from the current first-quarter earnings, there were some consumer stocks that topped Wall Street’s estimates. For instance, apparel brand Under Armour, Inc. (NYSE: UA) today announced that its first-quarter revenue was up 35% to $1.3 billion. Besides, it raised full-year revenue guidance, expecting a high-teen percentage revenue growth compared to a high-single-digit percentage previously.
Investors have many reasons to follow some of the top consumer stocks in the stock market today. It is not just companies that focus on consumer staples that are attracting attention. Companies focusing on consumer discretionary products are also seeing a recovery in their businesses. If anything, this is suggesting that the economic recovery is here and could continue to do so in the near term. With all that in mind, let’s take a look at some of the top consumer stocks to watch.
Top Consumer Stocks To Watch In May 2021
- Crocs Inc. (NASDAQ: CROX)
- Boston Beer Company (NYSE: SAM)
- Colgate-Palmolive Company (NYSE: CL)
- eBay Inc. (NASDAQ: EBAY)
Crocs
First up the list, Crocs stocks have been on a tear during the pandemic. It might come as a surprise to some, especially since the company has been on the market for more than a decade now. So, what changed? The foamy clogs exploded in popularity when people set aside fashion for comfort during the pandemic. If you have been going out to the beach, chances are that you have seen quite a number of people wearing the foam clogs shoes. Recently, CROX stock received another shot in the arm after the shoemaker increased its revenue outlook for the full year and reported record first-quarter sales.
From its first-quarter report, revenue came in 64% higher to $460.1 million from $281.2 million a year earlier. That’s the best growth rate Crocs has reported in years. What’s impressive is that this came amid an economy that is struggling to recover smoothly. As for the second quarter, Crocs is now calling for sales to grow by 60% to 70% year over year.
Some speculate that there is a shift in consumer preference towards comfort rather than just appearance. If you believe that more people wearing Crocs is a trend that’s going to last, Crocs could stand to benefit further. With that in mind, would you bet on CROX stock today?
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Boston Beer Company
Next up, Boston Beer’s stock has been on a tear since the start of the pandemic. While sales plunged when the stay-at-home measures were imposed, the company continued to defy gravity. That is partly thanks to rising demand from retailers for products like Truly hard seltzer and Twisted Tea.
No doubt, it’s already been a great year for SAM stock, but things are getting even better after the company reported its first quarter earnings. The company’s growth came in 48% higher year-over-year. More impressively, the company raised its aggressive outlook for fiscal 2021 thanks to its strong demand from its Truly hard seltzer. While competition has been heating up for seltzer products, Truly is having no problem continuing to win a growing share of the booming hard seltzer market.
The founder and chairman Jim Koch is also confident in their ability to innovate and build strong brands that complement its current portfolio and help support its mission of long-term profitable growth. Furthermore, let’s not forget Boston Beer’s track record of innovation and consistent profitability in recent years. Thus, would you say that the recent dip in SAM stock provides a good opportunity for investors to buy in?
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Colgate-Palmolive Company
Colgate-Palmolive is possibly one of the best consumer stocks in the market. Chances are, you most probably have used this brand for at least some time in your life. Investors love CL stock because it has good regional diversification. Its key business segments include home care, personal care, oral care and pet nutrition. Consumers globally use its products daily, including its famous toothpaste. These are essential products people naturally use in good times and bad.
On April 30, the company reported first-quarter revenue and profit that topped expectations. Sales rose 6.0% to $4.34 billion, exceeding analysts’ consensus of $4.27 billion. Besides, its earnings per share of $0.80 narrowly beat consensus of $0.79. CEO Noel Wallace believes the strong results reflect the impact of the company’s premium innovation, digital transformation and advertising. He also stated that the company has an exciting pipeline of innovation for the rest of the year across its product categories.
But the real reason why some investors are turning to CL stock is because of its enviable record in paying a dividend. If you’re an income investor, CL stock would stand out as one of the best dividend stocks to buy. The company made its first payout in 1895, and has begun increasing the dividend yield every year since 1963. Considering all these, does CL stock have a place in your portfolio?
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eBay Inc.
Last on the list, eBay is a global e-commerce leader that connects millions of buyers and sellers around the world. The company recently topped Wall Street expectations as its quarterly revenue came in 42% higher to $3 billion. Besides, quarterly net income rose 45% to $758 million. Despite beating analysts’ estimates, investors don’t seem to be impressed with the company’s forward guidance.
There’s no question that the pandemic acts as a catalyst to online retailing, and that has continued to benefit eBay. According to the company annual active buyers grew by 7% to reach 187 million. On the other hand, annual active sellers rose by 8% to 20 million. These suggest that users have been more active on the platform during the pandemic. Nevertheless, the second-quarter outlook of an 8-10% revenue growth year-over-year might have disappointed some investors.
Now, eBay is open to the possibility of accepting cryptocurrency as a form of payment, putting EBAY stock in the limelight. The company is also looking at ways to get non-fungible tokens (NFTs) on its platform. With the rise in NFTs, could eBay be looking at an alternative revenue growth driver in the near future? If so, would it be a good time to add EBAY stock to your portfolio?
