TSLA to KR: Top consumer stocks to watch in March

Highlights

• Tesla, Inc’s (NASDAQ: TSLA) total revenue increased by 71% YoY to US$53.82 billion in FY 2021. It has a P/E ratio of 174.58.
  
  
• Home Depot, Inc. (NYSE: HD) expects positive sales growth in fiscal 2022. It has a P/E ratio of 20.99.
  
  
• Kroger Company’s (NYSE: KR) total company sales were US$137.9 billion in fiscal 2021, compared to US$132.5 billion a year ago. Its P/E ratio is 41.24.

The consumer discretionary sector comprises various consumer durable goods, including apparel, auto components, etc. These companies typically enjoy brand loyalty in the market.  

The Russia-Ukraine war has cast a shadow over the market amid supply concerns. Prices of several essential commodities, from oil, food, and metals, are already at a record high. 

Against this backdrop, the consumer discretionary sector might be worth exploring. Here we discuss five such stocks based on their market capitalization. 

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Tesla, Inc. (NASDAQ: TSLA)

Market Cap: US$884.12 billion

Closing price on March 2, 2022: US$879.89

Palo Alto-based Tesla is a vertically integrated sustainable energy company. It makes electric vehicles, solar panels, solar roofs, and batteries for residential and commercial purposes.  

In fiscal 2021, Tesla’s total revenue increased by 71% YoY to US$53.82 billion. Its net income attributable to common shareholders was US$5.52 billion versus US$0.721 billion a year ago.

Its cash and equivalents were US$17.58 billion as of December 31, 2021, compared to US$1.81 billion at the end of FY 2020.

TSLA stock traded in the price range of US$1,243.49 to US$539.49 in the last 52 weeks. It has a P/E ratio of 174.58 and a forward P/E for one year of 115.78.

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Home Depot, Inc. (NYSE: HD)

Market Cap: US$340.2 billion

Closing price on March 2, 2022: US$327.37

Home Depot is one of the largest home improvement specialty retailers. It operates some 2,317 retail stores and employs around 500,000 associates.

The company is based in Atlanta, Georgia. It sells home improvement products like lawnmowers, power tools, building materials, and various garden and home decor products.

For the full year 2021, its net sales increased 14.4% over the previous year to US$151.2 billion. The same-store sales in the US rose 10.7%. The net earnings were US$16.4 billion, up 27% YoY, compared to US$12.9 billion in fiscal 2020. The earnings per diluted share came in at US$15.53 in FY 2021 compared to US$11.94 per diluted share in the previous year. 

The company expects positive sales growth in fiscal 2022.

The HD stock traded in the price range of US$420.61 to US$246.59 in one year. It has a P/E ratio of 20.99, a dividend yield of 2.06%, and an annualized dividend of US$7.60.

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Lowe's Companies, Inc. (NYSE: LOW)

Market Cap: US$152.6 billion

Closing price on March 2, 2022: US$228.66

The home improvement retailer operates over 1970 company-owned stores and 230 dealer-owned stores in the US and Canada. The company is located in Mooresville, North Carolina. Lowe’s offers home decorating, maintenance, repair, and re-modelling products and services.

For the fiscal year ended January 28, 2022, its net sales were US$96.2 billion compared to US$89.6 billion in the previous year. The net earnings were US$8.44 billion or US$12.04 per diluted share compared to US$5.8 billion or US$7.75 per diluted share in fiscal 2021.

On February 28, Lowe's unveiled its home improvement skill-building program DIY-U.

Its stock moved in the price range of US$263.31 to US$150.84 in one year. LOW has a P/E ratio of 19.03, a dividend yield of 1.44% and an annualized dividend of US$3.20.

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Target Corporation (NYSE: TGT)

Market Cap: US$106.9 billion

Closing price on March 2, 2022: US$224.9

Minnesota-based Target Corporation is a general merchandise retailer. It offers beauty and household products, food and beverage, home furnishings, apparel, and accessories. 

For the full year 2021, its revenue was US$106 billion, up 13.3% from the previous year. Its comparable sales grew 12.7% YoY. The net earnings came in at US$6.95 billion versus US$4.36 billion a year ago. Its GAAP EPS from continuing operations was US$14.10, up 63.1% YoY. 

Target’s stock moved in the price range of US $268.98 to US$166.82 in one year. Its P/E ratio is 16.12, the dividend yield is 1.64%, and the annualized dividend is US$3.60.

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Source: Pixabay

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Kroger Company (NYSE: KR)

Market Cap: US$40.32 billion

Closing price on March 2, 2022: US$49.37

Kroger runs 2800 supermarkets across the US. The food chain company is based in Cincinnati, Ohio. The company sells pharmacy, fuel, jewelry items, etc. 

For fiscal 2021, the total sales were US$137.9 billion compared to US$132.5 billion in FY 2020. Excluding fuel, its total sales grew 0.2% YoY.

The company posted an operating profit of US$3.5 billion. Its earnings per share diluted came in at US$2.17, and adjusted EPS was US$3.68 in fiscal 2021.

Its stock moved in the price range of US$50.15 to US$32.19 in the last 52 weeks. KR’s P/E ratio is 41.24, the dividend yield is 1.74%, and the annualized dividend is US$0.84.

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Bottomline

Stocks in this segment are sensitive to the business cycle because consumers can increase or decrease consumption based on their economic health. These stocks perform well when the market is under expansion. Investors, however, should apply caution before investing in the stock market.