Despite concerns over decreased consumer spending, many consumer good stocks have pulled through.
Consumer goods, to name a few categories, include textiles (such as clothing, shoes, and accessories), auto parts, meat products, cigarettes, beverages, appliances, toys and more.
We then screened a universe of consumer good stocks with market caps over $300M for those that are also highly profitable, beating their industry peers on gross, operating, and pre-tax margins.
If you are not familiar with these terms, have no fear! We review them below.
We were left with 42 names, from which we further screened for the companies that are rallying above their 20, 50, and 200-day market averages (MA). We were left with 23 names.
We list the top 10 by market cap below. Companies with higher market cap are considered to have more trustworthy information because they have greater histories of profitability and data.
Rallying: When a stock is rallying it means it is performing above its market average for a given time period. It is presented as a % of performance relative to the average. When a stock is performing above its 20-day moving average (MA) as well as its 50- and 200-day market averages, it signals bullish momentum. All the stocks in this list are rallying above their 20, 50, and 200-day MA.
Trailing 12 months (TTM): An indication that the calculated data has come from the last 12 months. For example, if data released in July 2045 is ""TTM"" (ie, P/E TTM or ""Trailing P/E""), this means the price and the earning-per-share data comes from the twelve-month period of August 2044 to July 2045.
TTM Gross margin: This metric that tells us the percentage of a company's revenue is left after paying all production expenses. Costs include overhead, payroll and taxation. ((revenues-cost of goods sold) / Revenue ) *100 = Gross margin %
TTM Operating margin: This tells us the percentage remaining after all operating expenses are paid. Operating expenses include: supplies, repairs, research and development, and depreciation:
(Operating Income / Net Operating Revenue) *100 = Operating Margin %
TTM Pre-tax margin: A company's earnings before taxes. This incorporates all of the expenses associated with business excluding taxes. It can help to determine the overall operating efficiency of the firm. The higher the pre-tax margin, the more profitable the company:
(Net profit before taxes / net sales) *100 = Pre-tax Margin
Market capitalization (market cap): Market capitalization, commonly referred to as market cap, is the total market value of a company's outstanding shares. It can be thought of as a measure of company's size. It can be calculated by multiplying the number of shares by the current price of the shares.
Example, If company X has 15 million outstanding shares valued at $25 a share, the market cap would be $15M x $25 = $375M. If Company's X's stock price rises to $30 then the new market value will be $450 Million ($15M x $30 = $450M).
Now that you're armed with information, take a look at our profitable stocks below. Do you think their momentum will continue to benefit their market values? Use the list as a starting-off point for your own analysis.
List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)
1. Coca-Cola (NYSE: KO ) : Beverages Industry. Market cap of $157.66B. Current price at $69.54. TTM gross Margin at 66.67% vs. industry average of 60.21%. TMM operating margin at 24.47% vs. industry average of 23.18%. TTM pre-tax margin at 36.13% vs. industry average at 25.44%. Stock is currently operating 3.14% above its 20-day MA, 4.23% above its 50-day MA, and 8.59% above its 200-day MA. The stock has gained 31.08% over the last year.
2. Philip Morris International (NYSE: PM ) : Cigarettes Industry. Market cap of $121.27B. Current price at $71.75. TTM gross Margin at 68.08% vs. industry average of 61.17%. TMM operating margin at 42.01% vs. industry average of 32.76%. TTM pre-tax margin at 38.64% vs. industry average at 26.55%. Stock is currently operating 6.86% above its 20-day MA, 5.76% above its 50-day MA, and 16.37% above its 200-day MA. The stock has gained 42.51% over the last year.
3. Honda Motor Co. (NYSE: HMC ) : Auto Manufacturers Industry. Market cap of $73.38B. Current price at $40.66. TTM gross Margin at 33.81% vs. industry average of 24.29%. TMM operating margin at 6.89% vs. industry average of 4.87%. TTM pre-tax margin at 8.62% vs. industry average at 5.36%. Stock is currently operating 3.97% above its 20-day MA, 6.73% above its 50-day MA, and 5.48% above its 200-day MA. The stock has had a good month, gaining 11.23%.
4. Canon (NYSE: CAJ ) : Photographic Equipment & Supplies Industry. Market cap of $62.79B. Current price at $48.15. TTM gross Margin at 55.39% vs. industry average of 51.37%. TMM operating margin at 10.14% vs. industry average of 9.53%. TTM pre-tax margin at 10.22% vs. industry average at 8.9%. Stock is currently operating 1.88% above its 20-day MA, 2.89% above its 50-day MA, and 1.91% above its 200-day MA. The stock has gained 23.44% over the last year.
5. Colgate-Palmolive (NYSE: CL ) : Personal Products Industry. Market cap of $43.30B. Current price at $89.11. TTM gross Margin at 61.35% vs. industry average of 53.25%. TMM operating margin at 24.18% vs. industry average of 19.22%. TTM pre-tax margin at 23.31% vs. industry average at 17.86%. Stock is currently operating 1.73% above its 20-day MA, 2.84% above its 50-day MA, and 11.19% above its 200-day MA. The stock has gained 9.6% over the last year.
6. Estee Lauder (NYSE: EL ) : Personal Products Industry. Market cap of $20.87B. Current price at $107.13. TTM gross Margin at 80.95% vs. industry average of 69.19%. TMM operating margin at 13.74% vs. industry average of 12.31%. TTM pre-tax margin at 11.36% vs. industry average at 8.52%. Stock is currently operating 2.59% above its 20-day MA, 5.75% above its 50-day MA, and 22.07% above its 200-day MA. The stock has gained 75.29% over the last year.
7. Kellogg (NYSE: K ) : Processed & Packaged Goods Industry. Market cap of $20.09B. Current price at $55.87. TTM gross Margin at 45.53% vs. industry average of 34.31%. TMM operating margin at 16.02% vs. industry average of 12.48%. TTM pre-tax margin at 13.32% vs. industry average at 9.85%. Stock is currently operating 1.27% above its 20-day MA, 0.47% above its 50-day MA, and 6.63% above its 200-day MA. The stock has gained 11.68% over the last year.
8. HJ Heinz (NYSE: HNZ ) : Market cap of $17.27B. Current price at $54.18. TTM gross Margin at 39.57% vs. industry average of 34.31%. TMM operating margin at 15.5% vs. industry average of 12.48%. TTM pre-tax margin at 12.83% vs. industry average at 9.85%. Stock is currently operating 1.5% above its 20-day MA, 2.11% above its 50-day MA, and 9.67% above its 200-day MA. The stock has gained 23.61% over the last year.
9. Hershey (NYSE: HSY ) : Confectioners Industry. Market cap of $12.76B. Current price at $57.52. TTM gross Margin at 46.31% vs. industry average of 34.23%. TMM operating margin at 17.79% vs. industry average of 12.46%. TTM pre-tax margin at 14.27% vs. industry average at 9.85%. Stock is currently operating 1.09% above its 20-day MA, 2.81% above its 50-day MA, and 11.52% above its 200-day MA. The stock has gained 16.65% over the last year.
10. J. M. Smucker (NYSE: SJM ) : Processed & Packaged Goods Industry. Market cap of $8.98B. Current price at $79.59. TTM gross Margin at 40.72% vs. industry average of 34.23%. TMM operating margin at 18.97% vs. industry average of 12.46%. TTM pre-tax margin at 14.86% vs. industry average at 9.85%. Stock is currently operating 3.97% above its 20-day MA, 3.51% above its 50-day MA, and 15.9% above its 200-day MA. The stock has gained 31.1% over the last year.
Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.
Kapitall's Becca Lipman does not own any of the shares mentioned above.
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