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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

5 Big Consumer Stocks to Buy on the Cheap

While many investors don't realize it, McDonald's is actually part restaurant chain and part REIT -- the firm owns much of the land underneath franchised store locations, generating bigger royalty streams from each location than rival quick service restaurant chains. A 3.4% dividend yield completes the picture for McDonald's financial health. The combination of cash generation, shareholder returns, and a discounted share price makes this consumer stock a good choice for 2013. Keep an eye on fourth quarter earnings slated for January 23.

Procter & Gamble

Another blue chip giant is personal care product maker Procter & Gamble (PG), the $187 billion firm behind household name brands such as Tide, Charmin and Cover Girl. Procter's size guarantees that the firm has no shortage of eyes on it -- that's why it may come as such a surprise that shares are trading at a big discount to the rest of the household products industry right now; as I write, Procter sports a 23% discount to P/E versus the rest of the industry.

Procter's brand portfolio is mammoth. In all, the firm lays claim to 25 individual brands that bring home more than $1 billion in annual revenues, providing impressive diversification on its income statement. As with McDonald's, P&G's massive scale presents some challenges, so the firm is focusing on cutting costs here at home while it introduces new products to consumers in emerging markets. The former should help to expand P&G's already stout margins while keeping the top line widening on the income statement too.

The balance sheet over at P&G is everything you'd expect from a firm this big. While there is considerable leverage at play -- around $32 billion worth -- a hefty cash position and ample cash generation abilities help to ensure that P&G continues to earn excellent ratings (and borrowing costs) for its credit. Procter is another dividend name, with a 3.3% dividend yield at current price levels. Even though Procter's discount isn't huge, with earnings slated for January 25, more eyes will be coming onto this big stock very soon.

Clorox

Household product peer Clorox (CLX) is another stock that's looking discounted compared to the rest of the industry. Even though Clorox isn't even close to P&G's scale, the $10 billion firm is hardly a small player in the personal and household goods category -- the firm owns a stable of brands that includes Glad, Hidden Valley and Brita, in addition to the firm's household-name bleach products. Even so, Clorox currently trades for nearly a 30% P/E discount, and a 15% relative discount on cash flows.

2 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,079.57 -42.44 -0.25%
S&P 500 1,996.74 -3.38 -0.17%
NASDAQ 4,557.6950 -11.9260 -0.26%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs