To celebrate the holidays, we here at the Fool are devoting extra virtual ink to all things consumer-focused in a special section, "The 12 Days of Christmas." Over the coming week, we'll have our "12 Days of Content" surrounding consumer-focused names that look set to profit or perish from the holiday cheer.
When preparing a holiday feast for family and friends, it's wise to make a shopping list before you head out for supplies. Those same shopping lists can be a key to consumer-staples companies that can form the bedrock of a Foolish portfolio. Legendary investor Peter Lynch took just such an approach when prospecting for stocks. Search for those great products that you use every day, then see whether they can make great stock picks.
Every Fool's list will be different, but here's how it would work at my house. To cook the Christmas turkey, we need Kingsford charcoal for the smoker, and Bud Light Lime for the turkey cannon. That puts Clorox
A holiday dinner just isn't complete without green bean casserole. Put some cream of mushroom soup in the shopping basket, and put Campbell Soup
Coffee with dessert is a must. Folgers is on sale, and that's a J.M. Smucker
Just because a company has well-known, popular brands doesn't mean it's a good investment. The table below is a first cut for the stocks from my shopping list.
Company |
Forward PE |
Earnings Growth Rate (3-yr average) |
Dividend Yield |
Dividend Growth Rate (3-yr average) |
---|---|---|---|---|
Clorox |
16.0 |
9.8% |
3.5% |
13.9% |
Anheuser-Busch InBev |
15.2 |
24.1% |
1.0% |
N/A |
Campbell |
13.3 |
(0.6%) |
3.3% |
10.3% |
McCormick |
17.0 |
16.1% |
2.3% |
9.4% |
Smucker |
13.3 |
43.0% |
2.4% |
9.5% |
Procter & Gamble |
14.8 |
5.3% |
3.0% |
11.8% |
Colgate-Palmolive |
16.0 |
8.6% |
2.6% |
12.6% |
Sources: Yahoo! Finance and Capital IQ, a division of Standard & Poor's.
It's tough to find great bargains on heavily followed stocks like these, and most of the list is fairly valued, but Smucker is a definite standout. Strong earnings and dividend growth history with a reasonable valuation mean that Mr. Market has put the company on the discount aisle. It's worth digging in to a jam jar of news and numbers to see whether Smucker belongs there, or if it's a bargain. You can start following Smucker by adding it to My Watchlist.
What's on your shopping list? Add a comment below to share your opinion and kick in $0.10 for Foolanthropy.