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Summary
- Growth in certain categories of consumer stocks indicates they weathered well the turbulence of pandemic Covid-19.
- Stocks of automobile retail chain AutoCanada Inc. rides on recent acquisitions and expansions.
- Household retail giant North West Company reported a profitable third quarter.
If there is one market that has been highly responsive due to the impact of the COVID-19 pandemic, it is the Canadian consumer industry. Consumption of essential goods and services can neither be halted nor postponed, irrespective of the economic or financial condition.
During the lockdown period, people rushed to buy essentials like food items in bulk and discretionary spending on non-essential items were deferred. In the last one year, the TSX consumer staples index declined by 5.6 per cent while the consumer discretionary index up almost 20 per cent in the last one year.
AutoCanada Inc. (TSX:ACQ)
AutoCanada stock has advanced by over 100 per cent in one year and up by almost 30 per cent in the last three months.
One of the largest automobile dealership in Canada, the company operates through 49 franchises in Canada across eight provinces and 17 franchises in Illinois, US.
The dealership provides a diversified choice to the consumer from a mix of luxury, domestic and imported brands of cars.
The consumer company generated a revenue of C$3.3 billion in one year (for the 12-month period ending September 30, 2020) and posted C$93 million in adjusted EBITDA. It also registered a 3.6 per cent change in consolidated revenue and an 87.9 per cent increase in adjusted EBITDA.
In October 2020, AutoCanada acquired controlling interest in French automaker, Auto Bugatti Inc. Additionally, it purchased the net assets of Peoria, a luxury dealership with franchise rights of premium luxury cars.
@Kalkine Image 2020
North West Company Inc. (TSX:NWC)
Stocks of leading Canadian retailer North West Company are over 20 per cent in the last one year.
North West’s third quarter (ended October 31, 2020) consolidated sales grew 6.4 per cent year-over-year (YoY) to C$ 553 million. Net earnings increased by C$ 11.1 million to C$35.9 million.
Food products accounting for majority of the company’s revenue.
It distributed quarterly dividend of C$ 0.36 and presently yields 4.324 per cent. The stocks five-year dividend growth is 2.25.
