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4 Top Consumer Stocks to Watch in April

By James Brumley - Apr 6, 2021 at 9:26AM

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This collection of companies is a good proxy for the health of the entire sector.

We're now over a year removed from the onset of the COVID-19 pandemic. In some ways, the dust has settled and in other ways, the echoes of disruptive effects are still ringing. Investors continue to weigh where individual companies -- as well as the world as a whole -- are on this spectrum.

To this end, news from four different consumer staples companies due this month will not only help flesh out their current financial health but will paint a broad picture of how the entire sector is faring. In order of when to pay close attention...

1. April 19: Coca-Cola

It's not the first staples name slated to report its quarterly numbers this earnings season. But Coca-Cola (KO -1.97%) is one of the earliest major names to do so. It will post its fiscal first-quarter results before the market opens on Monday, April 19, giving investors a close-up look at how it's shrugging off the ill effects of the pandemic.

Man looking through binoculars under sunny blue skies.

Image source: Getty Images.

You may recall that the past three quarters have been marred by lower sales and weaker year-over-year earnings. Those disappointing results, however, are almost entirely the result of logistics and demand complications stemming from COVID-19. Analysts expect the company's upcoming Q1 to look like Q1 2020, indicating things are moving back to normal.

2. April 20: Procter & Gamble

The day after Coca-Cola posts its quarterly numbers, Procter & Gamble (PG -2.62%) will share its fiscal third-quarter results. As of the latest look, analysts collectively expect earnings of $1.20 per share on sales of $17.96 billion. That's up just a bit from the year-ago comparisons of $1.17 EPS and $17.21 billion in sales.

P&G is a COVID-19 survivor because its products -- like Pampers diapers, Gillette shaving supplies, and Charmin toilet paper -- don't become any less necessary in the midst of a global pandemic. That's not to suggest it's not been affected by the dramatically different environment of 2020, though. E-commerce revenue soared 50% year over year for the three-month stretch ending in December, now accounting for a little over 14% of its total business.

Obviously, that proportion of its total top line stands to shrink as more and more vaccinated consumers inch their way back into stores. Procter & Gamble is looking to continue growing its online business, however, leveraging its mountain of digital data on over 1 billion different individuals to support the effort. Investors will want to listen carefully for how the company's going to proceed on this front when people aren't making a point of avoiding a trip inside a brick-and-mortar store.

3. April 30: Walt Disney

Whereas Procter & Gamble has pushed through the coronavirus headwind -- thanks to the nature of its business -- travel and tourism giant Walt Disney (DIS -0.37%) is at the epicenter of the pandemic's carnage. Before 2020, theme parks and resorts accounted for roughly 40% of its business, but the coronavirus contagion has effectively cut that business in half. Disneyland has been closed for a little more than a year, while Disney World is operating at limited capacity. The company's other amusement parks and all of its hotels are similarly shuttered or operating at a minimized capacity.

There's a light at the end of the tunnel, however, assuming nothing changed in the meantime. Disneyland and Disney California Adventure are both scheduled to reopen to a limited number of California residents on April 30. Other parks are also in the midst of reopening or expanding the number of daily guests allowed through the gates.

It's encouraging progress, but investors must be wary of assuming the worst is over based on the slow but steady cadence of park reopenings. While COVID-19 vaccines are now widely available, the number of newly reported cases in the United States is growing again. Ditto for Europe and China, which are also important markets for Walt Disney. With lockdowns being reimposed in some places, Disney may be forced to slow or postpone its reopening plans.

4. April sales (out in early May): Costco

Finally, add Costco (COST -0.84%) to your list of consumer staples stocks to watch in April -- or, to be more precise, its early May report of April's sales.

The club-based retailer is one of the few left that still posts monthly sales data. These figures have been outstanding over the course of the past year, with consumers opting/forced to cook more at home because they're eating out less. Same-store sales in the United States were up 10.3% for February, and by the time you're reading this, March's numbers may be posted. They should be similarly strong. Online shopping has helped drive a great deal of this growth.

We're past the one-year anniversary of the pandemic's arrival in the United States, however, which means April's sales data won't have the benefit of being boosted by altered consumer habits. Any growth from here will have to be organic. In other words, we're on the verge of seeing just how well the retailer is able to do something constructive with the flood of new customers and additional business it garnered specifically because of the coronavirus contagion.

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Stocks Mentioned

Costco Wholesale Corporation Stock Quote
Costco Wholesale Corporation
COST
$425.79 (-0.84%) $-3.61
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$103.91 (-0.37%) $0.39
The Coca-Cola Company Stock Quote
The Coca-Cola Company
KO
$59.99 (-1.97%) $-1.21
The Procter & Gamble Company Stock Quote
The Procter & Gamble Company
PG
$141.25 (-2.62%) $-3.79

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