Stocks in focus as consumer confidence declines

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Stocks in focus as consumer confidence declines

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 Stocks in focus as consumer confidence declines
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Highlights

  • As per the latest survey, consumer confidence plunged by 4.2 points in August.
  • The fall from 103.0 to 98.8 marks the greatest decline in consumer confidence since June 2020.
  • The survey was conducted before PM Truss announced freezing energy bills at £2,500 yearly for the average household.

Since the initial stages of the Covid-19 pandemic, consumer confidence in the UK has gone into the negative zone for the first time. As per a recent survey conducted by YouGov and the Centre for Economics and Business Research (Cebr), the Consumer Confidence Index has witnessed a decline of 4.2 points. This fall from 103.0 to 98.8 in August marks the greatest fall in consumer confidence since the pandemic.

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Consumer confidence plunged amid the soaring inflationary pressures, which are majorly driven by the rising energy costs. Households have been struggling with rising bills, which may aggravate further in the winter months, pushing the economically weaker ones towards poverty. Consumer confidence has hit with a darkening economic outlook and rough winter months ahead.

The August survey was conducted before PM Truss announced freezing energy bills at £2,500 yearly for the average household. But, the household finances over the past month have dipped by 3.1 points, and the outlook for the next year, too, isn’t great as it shows a deterioration of 10 points. All other measures also witnessed deteriorating scores, which included the prospects for house prices plunging by 7.2 points to 124.9. Job security perceptions also dropped from 120.9 to 118.5.

Amid the plunging consumer confidence, Kalkine Media explores three stocks on their 52-week performance.

ME Group International plc (LON: MEGP)

The market cap of the instant-service vending equipment provider focused on the consumer market, ME Group International plc, stands at £350.06m as of 15 September. With a low P/E ratio of 9.12, the company’s current dividend yield stands at 2.8% yearly. MEGP shares were trading at GBX 92.60 at around 8:00 AM (GMT+1) as the market opened on Thursday. The company’s EPS (earning per share) stands at 0.06, and its annual and YTD (year-to-date) returns stand at 30.06% and 46.98%, respectively. 

British American Tobacco Plc (LON: BATS)

The market cap of the leading British cigarette maker, British American Tobacco Plc, stands at £76,579.40m as of 15 September. With a P/E ratio of 15.24, the company’s current dividend yield is 6.2% yearly. BATS shares were trading at GBX 3,416.50, down by 2.25%, at around 8:00 AM (GMT+1) as the market opened on Thursday. The FTSE 100 company’s EPS stands at 2.97, and its annual and YTD basis returns at 29.20% and 25.68%, respectively. 

Compass Group plc (LON: CPG)

The market cap of the international contract foodservice group, Compass Group plc, stands at £33,644.70m as of 15 September. With a P/E ratio of 46.88, the company’s current dividend yield is 1.2% yearly. CPG shares were trading at GBX 1,916.00, down by 0.62%, at around 8:00 AM (GMT+1) as the market opened on Thursday. The FTSE 100 company’s EPS stands at 0.20, and its annual and YTD basis returns at 33.74% and 16.32%, respectively.

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