Kalkine Media lists 5 TSX consumer stocks to watch ahead of Christmas

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 Kalkine Media lists 5 TSX consumer stocks to watch ahead of Christmas
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  • The S&P/TSX Capped Consumer Staples Index has surged by 4.45 per cent year-to-date.
  • Alimentation clocked US$ 4.1 billion in revenue from merchandise and services in Q1 2023.
  • Equity markets have remained highly volatile, so it is crucial to conduct thorough research.

The approaching holiday season offers investors a chance to carry out tactical bets during a seasonal increase. Yes, the holiday season brings material gifts and opportunities to the market. Investors typically explore consumer stocks at this time of the year because they predict a rise in demand for consumer products and services.

Global stock markets use an industry taxonomy that divides major business fields into 11 main sectors. Finance and energy are the two sectors with the most weightage on the TSX. However, the consumer industry is also one of the important sectors in Canada.

The S&P/TSX Capped Consumer Staples Index has surged by 4.45 per cent year-to-date (YTD) and 0.54 per cent month-to-date (MTD).

Let's explore some of the consumer stocks listed on the Toronto Stock Exchange and see how they have performed:

Alimentation Couche-Tard Inc. (TSX: ATD)

ATD is one of the biggest consumer stocks on the TSX, and in Q1 FY23, net earnings were C$ 872.4 million, as opposed to the first quarter of fiscal 2022's net earnings of C$ 764.4 million. Meanwhile, in comparison to the first quarter of fiscal 2022, when adjusted net earnings were C$ 758 million, adjusted net earnings were about C$ 875 million in Q1 2023.

Alimentation clocked US$ 4.1 billion in revenue from merchandise and services, an increase of 0.1 per cent year-over-year (YoY). Revenues from same-store purchases climbed by 3.5 per cent in the US, 2.8 per cent in Europe, and other areas.

The dividend yield of the ATD stock was 0.718 per cent at the time of writing, and it last paid a quarterly dividend of C$ 0.11 per share. Meanwhile, Alimentation's market cap was C$ 62.15 billion, and the price-to-earnings (P/E) ratio was 12 as of writing.

Dollarama Inc. (TSX: DOL)

Dollarama displayed significant growth in Q2 FY23 as its sales climbed by 18.2 per cent to C$ 1,217.1 million compared to C$ 1,029.3 million in Q2 FY22. The company said that this increase was caused by an increase in comparable store sales and the total number of stores in the last 12 months.

In the second quarter of Fiscal 2023, its net earnings were C$ 193.5 million, or C$ 0.66 per diluted common share, as opposed to C$ 146.2 million, or C$ 0.48 per diluted common share, in Q2 2022.

The company's inventory climbed from C$ 586.3 million on August 1, 2021, to C$ 823.4 million as of July 31, 2022.

Dollarama said it aims to open 60 to 70 net new outlets and achieve a gross margin between 42.9 per cent and 43.9 per cent of sales in Fiscal 2023.

George Weston Limited (TSX: WN)

The company earns most of its revenues from Loblaw and Choice Properties. George Weston's net earnings from continuing operations were C$ 640 million in Q2 FY22, up C$ 525 million from the same period in 2021.

Adjusted net earnings from continuing operations attributable to the company's common shareholders were C$ 328 million, up C$ 53 million from the previous year's period.

WN stock's dividend yield is 1.7 per cent, and it paid a quarterly dividend of C$ 0.66 apiece on October 1, 2022. George Weston's earnings per share (EPS) is 9.11, and its price-to-book (P/B) ratio is 3.585.

Metro Inc. (TSX: MRU)

One of Canada's biggest grocery chains is Metro. It also has a substantial pharmacy footprint because of its 2018 acquisition of Jean Coutu. In Q3 2022, the sales jumped 2.5 per cent YoY to C$ 5,865.5 million.

Meanwhile, Metro's operating income (before depreciation and amortization) came to C$ 565.1 million, up 5.9 per cent from the same period in Fiscal 2021.

The company’s fully diluted net earnings per share for Q3 2022 were C$ 1.14 compared to C$ 1.03 in the corresponding quarter of 2021. Net earnings for the quarter were C$ 275 million, up from C$ 252 million for the same quarter of 2021.

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Saputo Inc. (TSX: SAP)

A multinational dairy processor having operations in Canada, the United States, and other international markets, Saputo offers dairy products such as fluid milk, cream, and cheese.

Saputo's revenues increased by C$ 839 million to C$ 4,327 billion in Q1 2023. Meanwhile, the net earnings amounted to C$ 139 million, up from C$ 53 million in Q1 2022.

SAP stock's dividend yield was 2.19 per cent and its market cap stood at C$ 13.74 billion at the time of writing. Also, the dividend growth of the company was at 2.15 per cent in the last three years.

Bottom line

The equity markets have remained highly volatile in 2022, so it is crucial to conduct in-depth research before putting your hard-earned money in a stock you plan to acquire for investment purposes. Finding a decent deal should be your objective, especially if you plan to buy stocks in the long run.

High-volatility stocks will move sharply upward on bullish days and lower on bearish days. If a recent high starts to reverse and you invest in a stock with low volatility and sluggish movement, you will have time to make changes.

Conversely, equities with rapid movement do not allow you much time to decide, and losses may result when a trend reverses.

Please note, the above content constitutes a very preliminary observation based on the industry and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


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