6 Stocks Benefiting From Lower Gas Prices
Investors are taking note of that as Dollar Tree's shares are up 27% this year, while Family Dollar's are up 18%.
Here then are summaries of six stocks that S&P Capital IQ says are likely to benefit from the current gas price environment arranged in inverses order of the number of "buy" ratings:
6. Advance Auto Parts (AAP)
Company Profile: Advanced Auto, with a market value of $5 billion, is a retailer of automotive aftermarket parts, accessories, batteries, and maintenance items. It owns over 3,000 retail parts stores.
Dividend Yield: 0.34% Investor Takeaway: Shares are up 3% this year, after a 20.5% slide over the past three months. They have a three-year, average annual return of 17.2%. S&P's year-end price target is $90, a 26% premium to the current price. Analysts give its shares four "buy" ratings, four "buy/holds," and 15 "holds," according to a survey of analysts by S&P. Analysts' consensus earnings estimate is for $5.71 per share this year and growth of 13% to $6.48 next year. 5. O'Reilly Automotive (ORLY) Company Profile: O'Reilly, with a market value of $12 billion, is the second-largest auto-parts retailer in the U.S., with over 3,700 stores. Investor Takeaway: Shares are up 14.7% this year and have a three-year, average annual return of 38%. Analysts give its shares five "buy" ratings, six "buy/holds," 12 "holds," and one "weak holds," according to a survey of analysts by S&P. S&P rates it "buy" and says "we think the shares are attractive at under 16 times our 2013 (earnings per share) estimate, a modest discount to historical averages." For fiscal year 2012, analysts estimate it will earn $4.62 per share and that that will grow by 14% to $5.27, in 2013. 4. Family Dollar Stores (FDO) Company Profile: Family Dollar Stores, with a market value of $8 billion, operates about 6,800 general merchandise discount stores in 44 states. They offer a variety of apparel, food, cleaning supplies, beauty and health products, toys, pet products, and seasonal goods, typically at prices from under $1 to $10. The chain targets low- and middle-income consumers. Dividend Yield: 1.2% Investor Takeaway: Its shares are up 18% this year, and have a three-year, average annual return of 32%. Analysts give its shares six "buy" ratings, seven "buy/holds," 11 "holds," and two "weak holds," according to a survey of analysts by S&P.S&P has its "buy" rated, upgrading it from "hold," on June 26, and has a $79 price target on its shares, which is an 18% premium to the current price. S&P analysts write that although its customer base of lower income families are expected to spend less in the near term, "we believe the company is well positioned to drive increases in both customer traffic and average customer transaction value with its growing consumables assortment and planned increases in national brand and private label offerings." It has also recently expanded its food assortment to include refrigerated foods and quick-prep and ready-to-eat products. Analysts' consensus estimate is for earnings of $3.65 per share this year, and growing 16% to $4.24 next year.
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