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

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 - Get Report), 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 - Get Report) 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

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

Check Out Our Best Services for Investors

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
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!
SYM TRADE IT LAST %CHG
CLX $109.26 0.00%
MCD $94.88 0.00%
PG $82.53 0.00%
SJM $117.42 0.00%
WMT $77.88 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs