Top 5 retail stocks to keep an eye on in 2022

Highlights

• Ingles Markets, Incorporated (NASDAQ: IMKTA) has a P/E ratio of 6.8 and a dividend yield of 0.76%. 
  
  
• Target Corporation (NYSE: TGT) has a dividend yield of 1.64%, with an annualized dividend of US$3.60.
  
  
• The United Natural Foods, Inc. (NYSE: UNFI) stock rose 208.02% YTD.

US consumer spending rose 0.6% in November from the previous month. Similarly, it rose 1.4% in October 2021. Consumer spending accounts for two-thirds of the US economic activity.

The November spending rose due to an increase in housing and utility expenditures, the Commerce Department noted in its latest report, which assumes special significance due to the high inflation, which economists blamed on the pandemic and supply chain disruptions.

Here, we discuss five consumer stocks that saw strong growth this year.

 Ingles Markets, Incorporated (NASDAQ: IMKTA)

The Black Mountain, North Carolina-based Ingles Market is a supermarket chain. It sells food items, general merchandise, and health, pharmacy, and beauty-care products. 

For the fiscal year ended Sept 25, 2021, the company posted net sales of US$4.99 billion compared to US$4.61 billion for the fiscal year ended Sept 26, 2020.

The net income attributable to common shareholders was US$249 million compared to US$178.6 million for FY 2020. The cash and cash equivalents increased to US$70.3 million as of Sept 25, 2021, versus US$6.9 million as of Sept 26, 2020.

The company has a market capitalization of US$1.66 billion and a P/E ratio of 6.8. Its dividend yield is 0.76%, and its annualized dividend is US$0.66.

The stock traded in the range of US$92.76 to US$40.41 in the last 52 weeks and closed at US$87.15 on Dec 23, 2021.

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Weis Markets, Inc. (NYSE: WMK)

The Sunbury, Pennsylvania-based Weis markets is a food product retailer. The products include groceries, frozen foods, alcoholic beverages, dairy and bakery products, seafood, meat, etc.

For the nine months ended Sept 25, 2021, its net sales were US$3.1 billion compared to US$3.09 billion for the same period a year ago.

The net income was US$86.2 million or US$3.21 per share diluted versus US$99.5 million or US$3.70 per share diluted in the same period of 2020.

The company has a market capitalization of US$1.74 billion and a P/E ratio of 16.48. It has a dividend yield of 1.99%, with an annualized dividend of US$1.28.

The WMK stock traded in the range of US$66.95 to US$46.41 in the last 52 weeks. It closed at US$64.77 on Dec 23, 2021.

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SpartanNash Company (NASDAQ: SPTN)

Headquartered in Grand Rapids, Michigan, SpartanNash is a distributor and grocery retailer. It distributes grocery products to store chains and independent retailers in 50 states.

For the nine months ended Oct 9, 2021, SpartanNash had net sales of US$6.8 billion compared to US$7.1 billion in the previous year’s corresponding period.

The net income was US$51.5 million against US$63.8 million in the corresponding nine months of 2020. The EPS diluted was US$1.44 compared to US$1.78 for the same period in 2020.

Its current market capitalization is US$911 million. It has a P/E ratio of 14.32 and a forward P/E one-year ratio of 14.10. Its dividend yield is 3.22%, and its annualized dividend is US$0.80.

The stock price moved in the range of US$26.14 to US$16.75 in the last 52 weeks and closed at US$25.35 on Dec 23, 2021.

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Target Corporation (NYSE: TGT)

The Minneapolis, Minnesota-based Target is a leading retailer in the US. It sells products ranging from food and beverage, beauty and household essentials, home furnishing and décor, to apparel and accessories. It also sells products through its e-commerce platform.

 The company had 1,924 stores as of Oct 30, 2021.

For the nine months ended Oct 30, 2021, its revenue was US$75 billion compared to US$65 million in the corresponding period of 2020. The net income was US$5.4 billion or US$10.87 per share diluted against US$2.99 billion or US$5.91 per share diluted in the same period of 2020.

Target’s market capitalization is US$105 billion, the P/E ratio is 16.26, and the forward P/E one-year ratio is 16.51. Its dividend yield is 1.64%, and the annualized dividend is US$3.60.

The stock traded in the range of US$268.98 to US$166.82 in the last 52 weeks and closed at US$221.01 on Dec 23, 2021.

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United Natural Foods, Inc. (NYSE: UNFI)

It is a wholesale distributor of organic and specialty food and other items. Its products include grocery, general merchandise, frozen foods, nutritional supplements, sports nutrition, perishable foods, foodservice products, personal care items, etc. 

For the fiscal year ended July 31, 2021, the company posted net sales of US$26.95 billion compared to US$26.56 billion in FY 2020. The net income was US$149 million compared to a net loss of US$274 million in FY 2020. 

It has a market capitalization of US$2.9 billion. Its P/E ratio is 13.15, and the forward P/E one year is 11.59. The stock traded in the range of US$57.89 and US$15.53 in the last 52 weeks. The UNFI stock closed at US$49.19 on Dec 23, 2021.

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Bottomline

The retail sector saw considerable growth this year, lifted by steady demand for consumer staples. However, investors should carefully analyze the companies before investing in stocks.