Best Consumer Stock Picks for 2013

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Dec 14, 2012
Today I like to hunt for the best consumer growth stock picks of the next year 2013. The consumer sector is one of my favorite investment areas.

Nearly half of my investments were made in consumer-related product companies. I really love this sector due to the fact that there are so many well-diversified companies with low risks.

Stocks from the sector raise dividends like clockwork and share their business success with shareholders.

In addition, I believe that the end-consumer spending will grow steadily because it’s a desire of humans to attain wealth and supply. People also want to represent something special. All ends in rising consumer demand.

The consumer goods sector has nearly 400 companies listed and most of them are of low growth. Smart investors should take a closer look at the buy opportunities in order to find the best share to invest in.

Let's go! I made a screen of the best consumer growth picks. These are my criteria:

- Forward P/E under 15

- Past five-year sales growth over 10 percent

- Earnings per share growth for the next five years over 10 percent

- Operating margin over 10 percent

Twelve stocks fulfilled these criteria of which six pay dividends and all twelve are currently recommended to buy. The results are dominated by textile, apparel, footwear and accessories stocks.

Here are my favorite stocks:

Coach (COH) has a market capitalization of $16.07 billion. The company employs 18,000 people, generates revenue of $4.763 billion and has a net income of $1.04 billion. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1.64 billion. The EBITDA margin is 34.53 percent (the operating margin is 31.74 percent and the net profit margin 21.81 percent).

Financial Analysis: The total debt represents 0.75 percent of the company’s assets and the total debt in relation to the equity amounts to 1.17 percent. Due to the financial situation, a return on equity of 57.63 percent was realized. Twelve trailing months earnings per share reached a value of $3.57. Last fiscal year, the company paid $0.98 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 15.86, the P/S ratio is 3.36 and the P/B ratio is finally 8.07. The dividend yield amounts to 2.13 percent and the beta ratio has a value of 1.60.

Ingredion (INGR) has a market capitalization of $4.90 billion. The company employs 11,100 people, generates revenue of $6.219 billion and has a net income of $423 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $886 million. The EBITDA margin is 14.25 percent (the operating margin is 10.79 percent and the net profit margin 6.80 percent).

Financial Analysis: The total debt represents 36.66 percent of the company’s assets and the total debt in relation to the equity amounts to 92.63 percent. Due to the financial situation, a return on equity of 20.4 percent was realized. Twelve trailing months earnings per share reached a value of $5.28. Last fiscal year, the company paid $0.66 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 12.15, the P/S ratio is 0.79 and the P/B ratio is finally 2.32. The dividend yield amounts to 1.62 percent and the beta ratio has a value of 1.26.

PVH (PVH) has a market capitalization of $7.68 billion. The company employs 10,900 people, generates revenue of $5.890 billion and has a net income of $317.88 million. The firm’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $690.3 million. The EBITDA margin is 11.72 percent (the operating margin is 9.5 percent and the net profit margin 5.4 percent).

Financial Analysis: The total debt represents 28.37 percent of the company’s assets and the total debt in relation to the equity amounts to 70.56 percent. Due to the financial situation, a return on equity of 12.52 percent was realized. Twelve trailing months earnings per share reached a value of $5.81. Last fiscal year, the company paid $0.15 in the form of dividends to shareholders.

Market Valuation: Here are the price ratios of the company: The P/E ratio is 18.73, the P/S ratio is 1.30 and the P/B ratio is finally 2.93. The dividend yield amounts to 0.14 percent and the beta ratio has a value of 1.93.

Take a closer look at the full list of consumer growth picks for 2013. The average P/E ratio amounts to 14.72 and forward P/E ratio is 10.88. The dividend yield has a value of 1.11 percent. Price to book ratio is 2.94 and price to sales ratio 1.34. The operating margin amounts to 16.30 percent. The average stock has a debt to equity ratio of 0.44.

Related stock ticker symbols:

CRESY, TRLG, COH, INGR, PVH, TWI, ALN, SHOO, GMCR, DECK, FOSL, VRA

Selected Articles:

· The Best Consumer Goods Stocks To Buy

· The 20 Biggest Consumer Goods Dividend Payers

· 16 Best Growing Dividend Paying Consumer Goods Stocks

· The Best Yielding Large Cap Consumer Stocks