Consumer stocks have always been considered an important addition to an investment portfolio, taking into account the sector’s centrality to the economy. The COVID-19 pandemic has enhanced the sector’s significance even further.

Investors explore consumer stocks in the hopes of healthy returns as these enterprises cater to a large market and rope in several other sectors and industries for their operations.

Let us now look at some TSX-listed consumer stocks that are likely to offer healthy returns as the Canadian market approaches greater immunization and easier movement restrictions.

Aritzia Inc. (TSX:ATZ)

Aritzia’s vast offerings are marketed in the US and Canada, with the majority of its revenues flowing from the latter. The apparel and accessories manufacturer could be a key consumer stock to watch in 2021 as the demand for its products may increase going forward with the gradual reopening of the economy.

It is currently one of the top performing consumer stocks on TSX, having risen nearly 97 per cent in the last one year. Its growth was about double the TSE 300 Composite Index’s growth in the same period.

The stock’s market capitalization has ballooned to touch nearly C$ 4 billion and it posts earnings per share (EPS) of about C$ 0.38, as of June 28. It has a 94.70 price-to-earnings (P/E) ratio, and a 10.976 price-to-book (P/B) ratio.

Aritzia recently expanded its men’s wear segment through the acquisition of a 75 per cent stake in Reigning Champ, a premium athletic wear brand.

Its financial results for fiscal year 2021 as well as the fourth quarter ending February 28, 2021, were robust despite pandemic-led disruptions. The apparel manufacturer’s e-commerce channel sales were at about 80 per cent of their pre-pandemic levels.

Dollarama Inc. (TSX:DOL)

Apart from being one of the top TSX-listed consumer sector stocks, Dollarama is also one of the companies offering the highest return on equity (ROE) in the TSX universe. The consumer defensive stock operates discount retail outlets offering general merchandise, seasonal products, and other everyday items at lower prices.

The C$ 17.6-billion market cap company saw a 13 per cent year-over-year (YoY) jump in its sales revenue of C$ 954.2 million in the first quarter ending May 2, 2021. Its operating margin was up 16 per cent YoY, while its operating income was up 18 per cent YoY in the latest quarter.

Its current ROE is about 786 per cent, while its return on assets is about 14.95 per cent.

The retail giant pays a C$ 0.05 apiece dividend on a quarterly basis, which will be payable on August 6, 2021. Its dividend grew at an annualized rate of 5.93 per cent in the last three years.

The company expects its financial results to be hit in the second quarter of fiscal 2021 due to COVID-19 restrictions.

Source: Pixabay

AutoCanada Inc. (TSX:ACQ)

AutoCanada is a C$ 1.3 billion market cap company operating car dealerships in Canada. The company sells a plethora of brands under its banner. It also offers new and used spare parts, vehicle financing and its maintenance services.

The auto retailer recorded a 37 per cent YoY rise in its revenue in the first quarter of 2021. Its net income in the quarter was about C$ 21.3 million as against a net loss reported in the same period last year.

The automobile retail operator outperformed its peers in the first quarter of 2021, with a 30 per cent YoY rise in same-store new retail sales, as against the Canadian market that rose about 15.2 per cent during this period.

AutoCanada stock, on the other hand, rose 105 per cent year-to-date (YTD) to outperform the TSX 300 Composite’s 77.3 per cent rise.

Alimentation Couche-Tard Inc. (TSX:ATD)

Alimentation Couche-Tard is one of the largest consumer stocks listed on the TSX. With a C$ 47.8 billion market capitalization, it operates general merchandise stores in geographies including North America, Scandinavia, Russia, the Baltic region, etc.

Its key offerings include road transportation fuel, merchandise and services, etc.

Couche-Tard has a quarterly dividend payment cycle. Its last announced dividend of C$ 0.087 a share was paid on April 9, 2021.

The consumer sector giant has noted that its traffic remained subdued in the third fiscal quarter of 2021 following restrictions imposed to curb COVID-19 infection.

Linamar Corporation (TSX:LNR)

Linamar is a consumer cyclical stock operating in the vehicle and (auto) parts industry. The company has a public stake worth C$ 5.2 billion, with about 65 million outstanding shares.

The consumer cyclical stock traded at C$ 79.47 as on June 28, 2021, about 12 per cent lower than its 52-week high of C$ 91.98, which it touched on March 11, 2021.

The stock has risen 21.09 per cent in the YTD period, while the broader market’s growth has been about 4.35 per cent in the same period.

The firm has a dividend yield of 0.784 per cent. It last announced a quarterly dividend of C$ 0.16 per share, paid on June 8, 2021.

Linamar offers C$ 5.42 as EPS, with a 15.10 P/E ratio. The stock offers an 8.47 per cent ROE, while its debt-to-equity ratio stands at 0.22.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.