Got $5,000? 3 Consumer Stocks to Buy and Hold for Years
Because consumer spending has increased over the past few months and is expected to climb even more during the upcoming holiday season, we think it could be wise to invest...
Because consumer spending has increased over the past few months and is expected to climb even more during the upcoming holiday season, we think it could be wise to invest one’s disposable money in quality consumer stocks Unilever (UL), Ennis (EBF), and Natural Grocers (NGVC). Read on to learn why.
With the holiday season around the corner, consumer stocks have been enjoying immense investor attention. According to a National Retail Federation report, holiday sales will grow between 8.5% -10.5% year-over-year this month and next month. U.S. retail sales were up 0.7% in September.
Supply-chain issues continue to impact the consumer sector in terms of the production and delivery of goods. Rising inflation is also a concern, but improving labor market prospects have been easing those worries. In addition, consumer spending increased 0.6% in September, and The Conference Board Consumer Confidence Index rose to 113.8 in October from 109.8 in September.
So, if one has $5,000 lying about, we think one should consider betting on fundamentally sound consumer stocks Unilever PLC (UL), Ennis, Inc. (EBF), and Natural Grocers by Vitamin Cottage, Inc. (NGVC). They are each expected to generate significant returns this year and beyond.
Unilever PLC (UL)
Based in London, UL operates as a fast-moving consumer goods company worldwide. It operates through Beauty & Personal Care, Foods & Refreshment, and Home Care segments.
On August 2, 2021, UL announced its acquisition of Paula’s Choice, a digital-led skincare brand. The acquisition is expected to boost the company’s revenues.
UL’s Beauty and Personal Care segment’s turnover was €5.70 billion ($6.60 billion) for the third quarter, ended September 30, 2021, up 2.6% year-over-year. It's Home Care segment turnover came in at €2.70 billion ($3.12 billion), up 1.4% year-over-year. And its Foods & Refreshment sales increased 3% year-over-year to €5.10 billion ($5.90 billion).
Analysts expect UL’s revenue and EPS to increase 4.5% and 9.6%, respectively, year-over-year to $62.83 billion and $3.12 in its fiscal year 2022. The stock has gained 3.1% in price since hitting its 52-week low of $51.98 on February 26, 2021, to close Friday’s session at $53.58. It has a 0.20 beta.
UL’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
UL has a B grade for Stability and Sentiment. Within the Consumer Goods industry, it is ranked #7 out of 71 stocks. Click here to see the additional POWR Ratings for Growth, Value, Momentum, and Quality for UL.
Ennis, Inc. (EBF)
EBF designs, manufactures, and sells business forms and other business products in the United States. The Midlothian, Tex.-based concern has a nationwide footprint, with 55 facilities across the U.S. that engage in the print and manufacture of business forms and commercial print for the wholesale trade.
On June 2, 2021, EBF reported its acquisition of the assets and business from AmeriPrint Corporation in Harvard, Illinois. Keith Walters, the Chairman, President & CEO of EBF, stated, “We are delighted to have the opportunity to bring AmeriPrint, their employees and their customers into the Ennis family. AmeriPrint is strategically located company in the Chicago area with 30 years of print industry experience and we will continue to operate the company in its same location.”
For the fiscal second quarter, ended August 31, 2021, EBF’s revenue increased 16% year-over-year to $100.45 million. The company’s gross profit margin came in at $28.90 million, up 14.9% year-over-year. Also, its net earnings were $7.46 million, representing a 16.2% year-over-year rise.
EBF’s revenue is expected to be $400.48 million in its fiscal year 2022, representing an 11.9% year-over-year rise. The company’s EPS is expected to increase 31.2% year-over-year to $1.22 in the current year. Over the past year, the stock has gained 21.5% in price to close Friday’s trading session at $18.94. It has a 0.54 beta.
It’s no surprise that EBF has an overall A rating, which equates to a Strong Buy in our proprietary rating system. In addition, it has an A grade for Quality, and a B grade for Value, Momentum, Stability, and Sentiment.
EBF is ranked #3 in the Consumer Goods industry. Click here to see the additional POWR Rating for EBF (Growth).
Natural Grocers by Vitamin Cottage, Inc. (NGVC)
NGVC, together with its subsidiaries, retails natural and organic groceries and dietary supplements in the United States. The Lakewood, Colo., company operates its retail stores under the Natural Grocers by Vitamin Cottage trademark and has around 162 stores in 20 states.
On September 29, 2021, NGVC announced the opening of its Springfield, Mo., store, its seventh location in the “Show-Me” state. This expansion is expected to boost the company’s sales.
NGVC’s operating income increased 5.4% year-over-year to $7.05 million for its fiscal third quarter, ended June 30, 2021. Its net income came in at $5.03 million, up 7.3% year-over-year. Also, its EPS has increased 4.8% year-over-year to $0.22.
For its fiscal year ending September 2022, NGVC’s revenue and EPS are expected to grow 10% and 13.6%, respectively, year-over-year to $1.10 billion and $0.75.In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. Over the past year, the stock has gained 10.9% in price to close Friday’s trading session at $12.18. It has a 0.63 beta.
NGVC’s strong fundamentals are reflected in its POWR ratings. The stock has an overall B rating, which equates to a Buy in our proprietary rating system.
In addition, it has a B grade for Value, Sentiment, Stability, and Quality. NGVC is ranked #12 out of 41 stocks in the Grocery/Big Box Retailers industry. Click here to see NGVC’s ratings for Growth and Momentum as well.
UL shares were trading at $53.82 per share on Monday morning, up $0.24 (+0.45%). Year-to-date, UL has declined -8.43%, versus a 24.04% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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