This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

10 Consumer Stocks for the Stay-at-Home Investor (Update1)

(Story updated to add that Dollar General's fourth-quarter earnings rose 31%.)

BOSTON ( TheStreet) -- Perhaps the best suggestion for investors seeking new opportunities is to stick with consumer-oriented stocks with a U.S. focus.

At least that's what S&P Capital IQ is suggesting. That's because the recent strong performance of "more globally insulated, domestic sectors like consumer discretionary, financials and information technology" will continue as the Federal Reserve hints that it's not yet done priming the pump for a U.S. economic recovery. All the while, macro-economic jitters continue to emanate from Greece and China, putting a damper on international growth stocks.

"We see this grudging rally persisting with U.S.-focused, globally insulated sectors likely continuing to lead the way," said Alec Young, S&P Capital IQ's global equity strategist, in a research note Tuesday.

S&P specifically recommends an "overweight" to consumer companies as consumer-discretionary stocks are seen "benefiting from the Fed's accommodation and improving U.S. news flow," and consumer-staples stocks "from inelastic demand and strong dividend growth."

Underscoring that, S&P's Consumer Discretionary Index is working on its 11th weekly gain in 12 weeks, "one of the most consistent runs for the discretionary sector since 1998," said Young. The S&P Consumer Staples Index is heading toward its eighth straight positive week.

Consumer-discretionary stocks are up an average of 14.5% this year, while consumer staples are up 3.5%. The S&P 500 Index has risen 12.9%.

S&P also suggests an overweight to the industrials sector on the basis of "easy U.S. and European monetary policy," while noting that it is more globally oriented and highly cyclical, and hence potentially more volatile.

For the market in general, Young said that while U.S. corporate earnings growth has slowed sharply this quarter and many stocks are approaching full value on a price-to-earnings basis due to the sustained rally, "we see few catalysts for a major near-term setback given unprecedentedly easy global monetary policy."

That's because "whenever equity markets have recently wobbled amid growth fears, central bankers have been quick to reassure, rekindling risk appetite. Look no further than the latest surge to new highs (Monday) likely triggered by (Federal Reserve Bank) Chairman Bernanke's assertion that accommodative policy is still needed to ensure a self-sustaining recovery."

Here are 10 stocks from the consumer-staples and consumer-discretionary sectors with excellent long-term prospects ranked in inverse order of the number of analysts' "buy" ratings:
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AMZN $536.02 -0.02%
DG $80.29 -0.10%
CVS $112.89 0.37%
HD $117.20 0.15%
TPX $75.71 0.21%

Markets

Chart of I:DJI
DOW 17,611.95 -77.91 -0.44%
S&P 500 2,102.21 -1.63 -0.08%
NASDAQ 5,133.1080 +4.8270 0.09%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs