Back to top

Image: Bigstock

Don't Overlook These Consumer-Centric Stocks it's Time to Buy

Read MoreHide Full Article

Easing inflation is starting to make global economic headwinds subside and could lead to stronger consumers. Several consumer staples and consumer discretionary stocks are becoming more attractive and worthy of investors’ consideration.

Here are three consumer-focused stocks that investors may want to consider as they offer diversity to consumers in a variety of global markets.

Aaron’s (AAN - Free Report) )

Landing a Zacks Rank #2 (Buy) Aaron’s Company is worth a look as an Atlanta-based omnichannel provider of lease-to-own purchase solutions to underserved and credit-challenged customers. Aaron’s provides lease ownership and specialty retailing of furniture, home appliances, electronics, and computers among other products and accessories.

With inflation beginning to ease earnings estimates are noticeably higher and Aaron’s price to earnings valuation is starting to stand out. Trading at $13 a share, fiscal 2023 earnings estimates have soared 33% over the last two months to $1.20 per share compared to $0.90 a share 60 days ago.  

Furthermore, Aaron’s stock trades at 11.8X forward earnings which is slightly beneath its industry average of 12.5X and well below the S&P 500’s 20.3X. More intriguing, Aaron’s appears to be in good financial health when looking at price to cash flow. Aaron’s P/CF of 0.67 is well below the optimum level of less than 20 and the industry average of 9.86.

Zacks Investment Research
Image Source: Zacks Investment Research

Ahold (ADRNY - Free Report) )

Based in the Netherlands, Ahold stock also sports a Zacks Rank #2 (Buy) with the company operating retail stores that offer food and non-food products in the United States and Europe.

Trading at $32 a share, Ahold’s top and bottom-line growth is steady with earnings estimates slightly up over the last two months. Ahold’s earnings are now forecasted to be up 4% this year and rise another 6% in FY24 at $2.95 per share.

At current levels, Ahold trades at 11.4X forward earnings which is nicely beneath the industry average of 17.2X and the benchmark. On the top line, sales are projected to jump 8% in FY23 and rise another 2% in FY24 to $100.82 billion.

Zacks Investment Research
Image Source: Zacks Investment Research

Embotelladora Andina (AKO.B - Free Report) )

Lastly, Embotelladora Andina stock currently sports a Zacks Rank #1 (Strong Buy) with the company distributing Coca-Cola products in Chile, Brazil, and Argentina. Through subsidiaries, Embotelladora also produces pet packaging and distributes juice and mineral water along with canned fruits and tomato products.

At $15 a share, Embotelladora’s EPS growth is very attractive at the moment with earnings forecasted to soar 58% this year at $1.39 per share compared to EPS of $0.88 in 2022. Fiscal 2024 earnings are expected to jump another 19% at $1.66 per share.

Even better, Embotelladora’s stock trades at just 10.7X forward earnings which is a considerable discount to its industry average of 23.5X and the benchmark’s 20.3X.

Zacks Investment Research
Image Source: Zacks Investment Research

Bottom Line

At the moment these stocks have an overall “A” VGM Zacks Style Scores grade for the combination of Value, Growth, and Momentum. With these consumer-centric stocks especially standing out in terms of value now appears to be a good time to buy as global economic conditions stabilize and inflation eases.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

The Aaron's Company, Inc. (AAN) - free report >>

Embotelladora Andina S.A. (AKO.B) - free report >>

Ahold NV (ADRNY) - free report >>

Published in