3 Consumer Stocks Analysts Like

NEW YORK (TheStreet) -- Nu Skin Enterprises (NUS), RC2 (RCRC) and Deer Consumer Products (DEER) are three consumer stocks that analysts on average expect will gain between 20% and 43%.

In comparison, global counterparts like Procter & Gamble ( PG), Johnson & Johnson ( JNJ), Avon Products ( AVP), Unilever ( UN) and Colgate-Palmolive ( CL) are expected to gain between 5% to 19%, according to analysts.

Global Hunter Securities writes that the global consumer space has rebounded significantly over the past 18 to 24 months. Looking ahead to 2011, the trend is likely to continue as consumer spending across countries is rising.

Nu Skin Enterprises is a global direct-sales company that makes and distributes anti-aging personal care products and nutritional supplements under its Nu Skin and Pharmanex brands. Among the analysts covering the stock, 73% rate it a buy while the rest rate it a hold. On average, analysts polled by Bloomberg expect the stock to rise 20%.

For the fourth quarter, net earnings were up 26% to 58 cents per share, supported by growth in China, South Korea and South Asia. Revenue rose 6% to $401.2 million. Given the company's strong cash flow and financial stability, the board of directors has approved an 8% increase in quarterly cash dividend to 13.5 cents per share, or an annual dividend of 54 cents per share, payable March 16.

For 2011, earnings per share are forecast in the range of $2.25 to $2.35, while revenue is expected to come in between $1.6 and $1.63 billion, which would mark growth of 5% to 7% growth compared with the previous year. Nu Skin foresees free cash flows at $164 million, up from $151 million in 2010.

Nu Skin is planning to launch its nutritional products Vitality and Alpha in the global markets during the fourth quarter of this year, adding $8 million to $10 million in additional revenue. Vitality has performed strongly in the domestic market. Nu Skin also is keen to enter emerging markets, especially India and Brazil.

RC2 is a leading designer, producer and marketer of mother, infant and toddler products. Its geographic segments are divided into North American markets and international markets. RC2 targets its customers through multiple channels of distribution, supported by more than 25,000 retail outlets. Nearly 67% of analysts covering the stock rate the stock a buy, while the rest rate it a hold. On average, analysts polled by Bloomberg expect the stock to rise 30.1%.

The company's financial position is strong. At the end of the third quarter of 2010, the company had $49.2 million of cash and cash equivalents and outstanding term debt of $41.3 million. RC2 reported gross margins of 41.4%, driven by its new preschool and MIT product lines. Besides its cost-containment initiatives, RC2 plans to increase prices in 2011 and 2012 so as to drive margins.

For 2010, EPS guidance was reaffirmed between $1.40 and $1.45, with capital expenditures amounting to $11 million. Gross margins are expected in the range of 42% to 43%. The company's Chuggington products have been launched in multiple international markets in 2010, which augurs well for 2011 results. In addition, during the third quarter, Walt Disney ( DIS) acquired these products' Series 2 programming for broadcast on its U.S. preschool channels in 2011 and 2012.

The company's new range of products, which includes Chuggington, Dinosaur Train and Early Engineers, coupled with its mother, infant and toddler products, will sustain growth. The company recently acquired JJ Cole, a private developer and marketer of mother, infant and toddler care products, for $40 million, which will likely add 20 cents to 25 cents to 2011 EPS. In addition, RC2 expects sales in the mother, infant and toddler care segment to increase to 50% from 44%.

RC2 plans to launch new product lines in 2011. The company is making efforts to expand its customer base through the Internet medium. Heading into the upcoming quarters, a strong product line will likely improve sales further.

Deer Consumer Products is a China-based manufacturer of home and kitchen appliances. In the domestic market, the products are sold under the brand Deer, while in the export markets sales are made under the brands of global consumer product companies like Stanley Black & Decker ( SWK). Deer's annual production capacity is 14 million units. All the analysts covering the stock rate it a buy. On average, analysts polled by Bloomberg expect the stock to rise 42.7%.

In 2010, China's home appliance industry accounted for $157.7 billion in retail sales. For the third quarter, Deer reported a record 108% surge in revenue to $55.3 million, compared with the same period a year ago. Net income rose 125% to $9.27 million. The company recorded earnings of 28 cents per share during the quarter, ahead of Zacks' analysts' estimate of 7 cents per share. In the household appliances segment, Deer reported its best-ever quarterly operating margin: 21%.

Domestic markets were a major contributor to Deer's organic sales, growing 708% year over year. Buoyed by this growth, the company has initiated plans for a second production facility in China's eastern AnHui province, a strategic move to meet demand from more than 300 million customers in 2011. The facility, which is likely to be completed in 2011, is estimated to add $250 million in revenue. The China National Bureau of Statistics says the nation's domestic retail sales are seen growing by 15% to $2.58 trillion in 2011, mainly because of robust growth in per-capita income of people.

Encouraged by its current order fulfillment and product shipments to domestic and global customers, Deer raised its revenue guidance by almost $12 million to a record $172 million for full-year 2010. Net income is forecast to increase by $3 million to $29 million and earnings per share are seen in the range of 87 cents to 88 cents, up from the earlier estimate of 76 cents. For 2011, Deer expects revenue and net income to grow by at least 30%.

>To see these stocks in action, visit the 3 Consumer Stocks portfolio on Stockpickr.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.

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