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Highlights
- Canada’s retail sales are expected to have surged by a per cent in October amid easing pandemic restrictions.
- As of last Friday, the S&P/TSX Capped Consumer Discretionary Index was up by roughly 17 per cent so far this year.
- A retail stock mentioned here zoomed by more than 58 per cent in the past nine months.
After falling by 0.6 per cent to C$ 56.6 billion in September, Canada’s retail sales are expected to have surged by a per cent in October amid easing pandemic restrictions, said a report by Statistics Canada on Friday, November 19.
As the Canadian economy is rapidly evolving to curb the global supply chain challenges, some market experts believe that discount holidays like Black Friday could bolster consumers’ interest and, in turn, boost retail sales.
As of last Friday, the S&P/TSX Capped Consumer Discretionary Index was up by roughly 17 per cent so far this year and up by almost seven per cent month-to-date (MTD).
Now, let us explore three consumer stocks listed on the TSX that you could explore ahead of Black Friday.
Also read: 2 Canadian pizza stocks to enjoy this weekend
1. Linamar Corporation (TSX: LNR)
Linamar Corporation is a Guelph, Ontario-based company that manufactures powertrains, drivelines and mobile industrial equipment.
The company showed the signs of recovery from its COVID-19 as its industrial sales surged by 45.4 per cent year-over-year (YoY) to C$ 433.9 million in the third quarter of fiscal 2021.
On the other hand, its total revenue was up by C$ 7.6 million YoY to C$ 1.645 billion in the latest quarter.
Linamar is scheduled to pay a quarterly dividend of C$ 0.2 per share on December 3, as against its previous dividend of C$ 0.16 per share (distributed in September).
LNR stock closed at a price of C$ 78.44 apiece on November 19, after hitting a day high of C$ 79.
The stock grew by more than 19 per cent on a quarter-to-date (QTD) basis and was up by more than 30 per cent in the last 12 months.
On the valuation front, Linamar held a return on equity (ROE) of 11.58 per cent (as of November 22).
2. Gildan Activewear Inc (TSX: GIL)
Gildan Activewear Inc is a Montreal-based apparel manufacturer with vertically integrated operations across North America, Latin America, Europe, and Asia-Pacific.
Gildan recorded a 33 per cent YoY increase in its revenue of US$ 802 million in the third quarter of fiscal 2021. It also marked an eight per cent increase from its top line of US$ 740 million in Q3 FY2019.
Its operating income amounted to US$ 201 million in the latest quarter, noting a YoY rise of 25.1 per cent, and reported a free cash flow of US$ 232 million.
Gildan is set to pay a quarterly dividend of US$ 0.154 apiece on December 20.
GIL stock closed at a value of C$ 53.07 apiece on November 19, up by more than 17 per cent in the last month. It had also swelled by about 57 per cent in the past 12 months.
Image source: © 2021 Kalkine Media Inc
As of November 22, Gildan held an ROE of 29.93 per cent.
Loblaw Companies Ltd (TSX: L)
Loblaw Companied Ltd is a Brampton, Ontario-headquartered retailer that operates grocery, pharmacy and general merchandises.
The Canadian retail giant saw a revenue growth of 2.4 per cent YoY to C$ 16.05 billion in the third quarter of fiscal 2021. Its net earnings available to common shareholders amounted to C$ 431 million in this quarter, noting an increase of 26 per cent YoY.
Loblaw stock closed at C$ 98 apiece on November 19, up by nearly seven percent in the last month and by over 58 per cent in the past nine months.
At the time of writing this, Loblaw held a market capitalization of C$ 32.8 million and an ROE of 12.38 per cent.
Also read: 5 Black Friday stocks for Canadians to buy
Bottom line
The current weather conditions in Canada’s British Columbia has brought much trouble to people as well as businesses. As a result, especially with most transport systems down, the consumer market is likely to suffer.
However, the approaching holiday season and major shopping events like Black Friday and Cyber Mondays are likely to bring the consumer space some joy.
