MUSA to TH: Five consumer discretionary stocks to explore in June

Highlights 

• Murphy USA Inc. (NYSE:MUSA) opened six new Murphy Express stores and one QuickChek store, bringing its total stores to 1,686 at the end of Q1,
• H&R Block, Inc. (NYSE:HRB) has a P/E ratio of 10.26 and a dividend yield of 3.15%, with an annualized dividend of US$1.08.
• Target Hospitality Corp. (NASDAQ:TH) revenue increased 77% YoY to US$80.3 million in Q1 ended March 31, 2022. Its P/E ratio is 63.38.

Consumer discretionary stocks are companies that manufacture or offer services considered non-essential, such as entertainment, cars, furniture, etc. Some large consumer discretionary companies are Amazon.com Inc (AMZN), Tesla Inc (TSLA), and Nike Inc (NKE). 

According to the latest official data, US consumer spending rose 0.7% in April as the pace of inflation slowed. Consumers bought more recreational, non-essential goods, such as clothing, motor vehicles, furnishing and household equipment. 

Here we discuss five consumer discretionary stocks that grew more than 25% year-to-date.

Murphy USA Inc. (NYSE:MUSA)

Closing price on May 26, 2022: US$249.22 

Eldorado, Arkansas-based Murphy USA Inc is a gasoline product and convenience-store merchandise retailer in the US.

Its stores are 90% company-owned and 100% company-operated, mostly adjacent to Walmart stores. It offers low-price fuels through low-cost kiosks and small stores.

For the quarter ended March 31, 2022, the company earned an operating revenue of US$5.12 billion compared to US$3.54 billion in the same quarter in the previous year.

Its net income came in at US$152.4 million or US$6.08 per share diluted compared to US$55.3 million or US$2.01 per share diluted in the March quarter of 2021. 

During Q1 2022, the company opened six new Murphy Express stores and one QuickChek store, bringing its total stores to 1,686 at the quarter-end.

The stock has a market capitalization of US$6.1 billion. Its P/E ratio is 13.21, and the forward P/E for one year is 14.82. The dividend yield is 0.51%, with an annualized dividend of US$1.24.

MUSA stock traded in the range of US$262.58 to US$126.56 in the last 52 weeks. 

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H&R Block, Inc. (NYSE:HRB)

Closing price on May 26, 2022: US$34.46 

H&R Block Inc provides tax filing services to the public in the US, Canada, and Australia. Its services include income tax return preparation, digital do-it-yourself tax solutions, and other related services. The company is headquartered in Kansas City, Missouri.

The company reported a revenue of US$2.06 billion in the quarter ended March 31, 2022, compared to US$1.98 billion in the same quarter a year ago. 

Its net income was 673 million or US$4.05 per share diluted compared to US$758 million or US$4.08 per share diluted in the March quarter of 2021. 

The stock has a market capitalization of US$5.58 billion. Its P/E ratio is 10.26, and the forward P/E for one year is 10.60. The dividend yield is 3.15%, with an annualized dividend of US$1.08.

HRB stock traded in the range of US$34.96 to US$21.08 in the last 52 weeks. 

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Tenneco Inc. (NYSE:TEN)

Closing price on May 26, 2022: US$16.74 

The Lake Forest, Illinois-based auto parts company provides emissions-control products in line with air-quality legislation, fuel economy, and engine performance based on the vehicle profile. 

The company booked a net loss of US$19 million for the quarter ended March 31, 2022, compared to the net income of US$87 million in the previous year’s March quarter. The net sale was US$4.65 billion compared to US$4.73 billion in the March quarter of 2022. Its EPS diluted came in at US$83.1 compared to US$82.5 in the March quarter of 2021. 

The stock has a market capitalization of US$1.41 billion. Its P/E ratio is 4.29. TEN stock traded in the range of US$22.75 to US$9.51 in one year. 

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Target Hospitality Corp. (NASDAQ:TH)

Closing price on May 26, 2022: US$6.08 

Target Hospitality Corp is a vertically integrated specialty rental and hospitality services company headquartered in Houston, Texas. It provides food catering, housekeeping, maintenance, laundry, workforce lodge management, etc.

For the first quarter ended March 31, 2022, its revenue was US$80.3 million, an increase of 77% YoY, compared to US$45.49 million in the same period in 2021. Its net income was US$0.49 million or US$0.01 per share diluted compared to the net loss of US$13.1 million or US$0.14 per share diluted in the March quarter of 2021. 

The stock has a market capitalization of US$614 million. Its P/E ratio is 63.38, and the forward P/E for one year is 60.80. 

TH stock moved in the range of US$7.68 to US$2.72 in the last 52 weeks.  

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StoneMor Inc. (NYSE:STON)

Closing price on May 26, 2022: US$3.42 

StoneMor Inc owns and operates cemeteries and funeral homes in the US. The Bensalem, Pennsylvania based company, sells cemetery products and services. Its two operating divisions are cemetery operations and funeral homes.

For the quarter ended March 31, 2022, the company reported a revenue of US$80.98 million compared to US$78.31 million in the same quarter the previous year. It incurred a net loss of US$12.23 million or US$0.10 per share diluted compared to the net loss of US$4.62 million or US$0.04 per share diluted in the March quarter a year ago.

The stock has a market capitalization of US$405.26 million. Its stock traded in the range of US$3.45 to US$1.82 in the last 52 weeks. 

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Bottom line:

The existing macroeconomic situation influences the performance of discretionary stocks. The sector flourishes when consumers spend more and slows down in a tough economic scenario.