Are These The Best Consumer Stocks to Watch Ahead of 2021?
It has been a rough year for many consumer stocks. This is due to the coronavirus pandemic significantly affecting consumer discretionary spending earlier on in the year. Consumer stocks have suffered since the stock market crashed in March despite being amongst the most well-known names in the world. Nevertheless, some of the top consumer stocks have rebounded splendidly since then. Companies such as Target (TGT Stock Report) and Walmart (WMT Stock Report) are seeing their best year on the stock market so far. Aside from providing customers with their daily necessities, these companies have adapted fairly well to the new norms. Allowing for curbside-pickup and bolstering their e-commerce services has and continues to play out well for them. But, investors may be wondering how the rest of the industry is looking.
With the holiday season and news of Pfizer’s (PFE Stock Report) and Moderna’s (MRNA Stock Report) vaccine being rolled out, consumer stocks could be riding on a recovery wave in 2021. Additionally, a $900 billion stimulus package is currently on the way as well. As surging coronavirus cases continue to batter the economy, this aid would be arriving at a crucial time. All things considered, it could provide the breather that the industry has been needing.
Considering all the recent positive developments, it is understandable that investors have been looking at consumer stocks. Buying on the current dips of some of the best consumer stocks now can be tempting. As always, it pays to be selective. Especially for those looking to add long-term growth stocks to their portfolios. To help with that, here is a list of the top consumer stocks to watch going into 2021.
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Best Consumer Stocks To Watch This Month: Simply Good Foods Co.
To start things off, we will look at Simply (SMPL Stock Report). Simply is a developer, marketer, and seller of nutritional foods and snacking products. The company’s stock price shot up by over 10% during Tuesday’s trading session. Notably, the company was announced to be a component of the S&P SmallCap 600 Index.
The stock will be replacing financial service company Kinsale Capital Group (KNSL Stock Report) on the index effective December 29. This is certainly a positive development for the company. Being part of a major stock index will definitely put Simply in the spotlight. In addition, passive funds tracking the index would be purchasing shares of Simply. Moreover, the company has been growing its market share in the nutritional snacking sector throughout its fiscal 2020. Could this still be a good time for investors to buy in?
Another factor helping with that decision would be the company’s recent quarterly report. From its fourth-quarter fiscal, the company saw a 59% year-over-year jump in total revenue. Furthermore, it also saw increases of 71% in earnings per share and 104% in net income over the same period. CEO Joseph Scalzo said, “We remain confident in our business model and long-term growth prospects. We are executing our strategies and are positioned for long-term sustainable net sales and earnings growth that we expect will create value for all shareholders.” With Simply’s current momentum, do you think SMPL stocks will continue to thrive in 2021?
Best Consumer Stocks To Watch This Month: Nike Inc
Following that, we have sports apparel titan Nike (NKE Stock Report). Consumers are all too familiar with the brand of Nike. It appears that the same can be said for investors as well. NKE stocks are up by over 120% since the March lows. In fact, it just hit a new all-time high of $145.21 a share on December 21. The company’s latest quarterly results also provide a positive outlook moving forward. As this is not something most companies in the sector can boast at this time, investors are undoubtedly interested.
From its second-quarter fiscal report last Friday, the company reported total revenue of $11.2 billion for the quarter. With a year-over-year rise of 84% on its digital sales this is definitely something that would please investors. CFO Matt Friend said, “With healthy inventory positions across all geographies, our return to growth is a testament to our digital strength, as well as our disciplined marketplace and financial management.” Evidently, Nike is a company that has adapted especially well to the new norms. However, investors could be keen to know how the company plans to make the most of the upcoming tailwinds for the rest of its fiscal 2021.
Nike also announced on the same earnings call that it has plans to open 30 stores in 2021. The company also mentions intentions to improve customer outreach and supply chain management. Despite its stellar performance over the last two quarters, Nike is not resting on its laurels. Friend had this to say, “Consumer interest in sport, fitness, health, and wellness has never been greater. And Nike’s market opportunity is as large as ever.” Do you share the same optimism regarding NKE stock?
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Best Consumer Stocks To Watch This Month: Starbucks Corporation
World-renowned coffee house chain Starbucks (SBUX Stock Report) needs no introduction. SBUX stocks saw a new all-time high after its investor day held on December 9. It has taken a breather since then falling by 2.83% as of Tuesday’s closing bell. Considering the company is having its best year on the stock market, let’s take a closer look.
In its recent quarter fiscal posted in October, Starbucks reported total revenue of $6.2 billion for the quarter. It also saw a 61% increase in cash on hand year-over-year which amounted to $4.35 billion. CEO Kevin Johnson said, “I am very pleased with our strong finish to fiscal 2020, underpinned by a faster-than-expected recovery in our two lead growth markets, the U.S. and China. These results demonstrate the continued strength and relevance of our brand.” He also cited the company’s digital platform and rapid innovation as factors that will continue to fuel the company’s recovery moving forward. With such immense funds, what has the company done to stay ahead of the competition?
Last week, Starbucks announced a collaboration with Microsoft (MSFT Stock Report). Microsoft will be integrating the Starbucks app within its workplace messaging service Microsoft Teams. The service is available in the U.S. and Canada and will enable users to share personalized Starbucks eGift cards in Teams. In addition, the company also announced plans to open 22,000 new stores globally over the next ten years. With all that being said, it seems to me that Starbucks is not slowing down anytime soon. Thus, do you have SBUX stock on your 2021 watchlist?