2 Consumer Discretionary Stocks – BRG And ALL

3 min read | January 04, 2019 07:08 PM AEDT | By Team Kalkine Media

Breville Group Limited (ASX:BRG) belongs to consumer discretionary market segment in the Australian landscape. The company is engaged in the production and distribution of consumer electrical appliances. Its flagship product is Breville band targeting on premium kitchen appliances. The company owns other brands as well such as Kambrook and Ronson offering irons, heating & cooling products, vacuum cleaners and kitchen appliances. The company offers Breville, Kambrook and Ronson brands in Australian and New Zealand market.

Breville’s stock represents a performance growth of approximately 1488% since its inception. The shares have however shown a downward trend since the last three months, falling by 19%, from AUD 12.77 on 3 October 2018 to AUD 10.350 on 3 January 2019. With the close of the trading session today (4th January 2019), the share price stands at AUD 10.580, up by 2.2% from the previous close of AUD 10.350. With earnings per share of AUD 0.450x, the price-earnings ratio stands at 23.

In its recently released annual financial results, the group recorded annual revenue of $652.3 million, representing an increase of 7.7% over last year. The global product segment rose to $526.9 million (upside of 12.2%). Although the distribution segment posted a 7.8% lower revenue of $125.5 million, EBIT increased to $13.6 million (upside of 106.1%). The overall EBIT for the group stood at $86.9 million (upside of 10%). Net profit after tax was recorded at $58.5 million (upside of 8.7%). The group increased the dividend payout from 8.2% last year to 33% this year. Standing at the 3rd year of Acceleration Program, the group’s EBIT grew at 1.2% in FY15 which impressively rose to 10% in FY18.

With strong financial performance in FY18 and six anticipated product launches in FY19, investors may keep the stock in their watchlist.

Aristocrat Leisure Limited (ASX:ALL) is a global leader in offering digital, web and mobile gaming solutions as well as casino management machines. It is involved in producing Class III gaming machines such as roulette, craps, black jack, slot machines and many more. It is also engaged in developing Class II video game technologies. Besides, the company offers Product Madness, Plarium and Big Fish games.

The stock of Aristocrat Leisure has been on a major downside since last six months, plunging from AUD 30.50 on 3 July 2018 to AUD 21.40 on AUD 3 January 2019. With the close of the trading session today (4 January 2019), the company’s share price stands at AUD 21.50, up by 4.7% from the previous close of AUD 21.40. With earnings per share of AUD 0.850x, the price-earnings ratio stands at 25.180. The annual dividend yield for the company is 2.15.

In its recently released annual financial results for the year ending 30 September 2018, Aristocrat Leisure recorded Net Profit After Tax of $542.6 million, representing an increase of 9.6% as compared to $495.1 million for the last year. The company has offered a final dividend of 27 cents per share as compared to 20 cents per share in the previous year. Operating cash inflow increased by 16.9% from $799.1 million in FY17 to $933.8 million in FY18. The company completed the acquisition of Plarium Global Limited and Big Fish Games Inc during the year. It spent around $100 million in D&D (Design & Development) to secure its market position amidst global competition.


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