NEW YORK (TheStreet) -- The consumer sector, like the tech sector, is comprised of many familiar household names, but they may not be good investments. That said, there are plenty of popular brands that provide good opportunities.

So what are some ideas for best consumer companies to invest in?

Credit Suisse (CS) analysts put forth best investment ideas in a variety of sub-sectors for the next six to 12 months, in a report issued Wednesday. Analysts were allowed to choose up to three stocks in their coverage area. The exercise resulted in a list of 140 top stock ideas -- 29 are small cap (under $4.1 billion), 56 are SMID (under $9.6 billion), and 81 are mid cap ($2-27.1 billion), the report said.

In the consumer sector, Credit Suisse analysts listed eight best of the best stocks to own.

TheStreet paired Credit Suisse's investment perspectives on the stocks with ratings from TheStreet Ratings, its proprietary research tool, to give an added perspective on the stock picks.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Here are Credit Suisse's top picks for the consumer sector. And when you're done make sure to check out Credit Suisse's top health care stocks to buy. Year-to-date returns are based on March 4, 2015 closing prices.

 

HBI Chart HBI data by YCharts

1. Hanesbrands (HBI - Get Report)
Sub-industry: Apparel & Footwear
Market Cap: $12.8 billion
Target Price: $130
Year-to-date return: -15.3% (Hanesbrands completed a 4:1 stock split on March 4.)

Credit Suisse's Christian Buss said: Strong and steady free cash flow generator with opportunity to catalyze EPS growth via acquisitions and mix shift towards premium priced products.

TheStreet Ratings said: TheStreet Ratings team rates HANESBRANDS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate HANESBRANDS INC (HBI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, notable return on equity, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • HBI's revenue growth has slightly outpaced the industry average of 17.4%. Since the same quarter one year prior, revenues rose by 18.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 175.00% and other important driving factors, this stock has surged by 71.46% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, HBI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • HANESBRANDS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HANESBRANDS INC increased its bottom line by earning $3.96 versus $3.25 in the prior year. This year, the market expects an improvement in earnings ($6.46 versus $3.96).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Textiles, Apparel & Luxury Goods industry. The net income increased by 177.2% when compared to the same quarter one year prior, rising from $32.27 million to $89.44 million.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Textiles, Apparel & Luxury Goods industry and the overall market, HANESBRANDS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
LEA Chart LEA data by YCharts

2. Lear Corp. (LEA - Get Report)
Sub-industry: Auto & Auto Parts
Market Cap: $8.6 billion
Target Price: $115
Year-to-date return: 11.4%

Credit Suisse's Dan Galves said: Secular growth in Electrical (26%) is under-appreciated and Seating business (74%) is not as bad as the Street thinks. Recent acquisition of Eagle Ottawa supports our view that the margin profile of the Seating business will be better-than-expected (recent guidance pointed to 70bp YOY margin expansion, only 20bp from EO). Positive trends in each division (including recently announced growth in new business backlog) leads to better-than-expected earnings growth despite our below-consensus US demand view. Strong FCF ($550MM in 2015E is 7% yield), plus nearly $1bn in excess capital points to accelerating cash return activity. Activists can again begin to pressure mgmt. in early 2015 and we think Lear is most likely beneficiary of increased M&A in supplier space.

TheStreet Ratings said: TheStreet Ratings team rates LEAR CORP as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate LEAR CORP (LEA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, compelling growth in net income and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • LEA's revenue growth has slightly outpaced the industry average of 0.7%. Since the same quarter one year prior, revenues slightly increased by 6.9%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 268.18% and other important driving factors, this stock has surged by 35.18% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LEA should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • LEAR CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, LEAR CORP increased its bottom line by earning $8.24 versus $4.99 in the prior year. This year, the market expects an improvement in earnings ($9.55 versus $8.24).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 259.6% when compared to the same quarter one year prior, rising from $72.80 million to $261.80 million.

 

MGM Chart MGM data by YCharts

3. MGM Resorts International (MGM - Get Report)
Sub-industry: Gaming & Lodging
Market Cap: $10.8 billion
Target Price: $30
Year-to-date return: 3.3%

Credit Suisse's Joel Simkins said: Strong velocity of progression in Cotai where MGM is moving ahead with construction and could open in early/mid 2016. Given Cotai as well as high probabilities around MD and MA in the regional markets, MGM is assembling an attractive mid-decade growth pipeline that will bolster a recovery in the core LV business. Further out, we expect Macau dividends, recapitalization of Crystals, and other refinancing activities should further improve MGM's balance sheet. In Vegas, a fresher set of assets, several new attractions (Hakkasan) and other improvements coming (Delano) we think MGM remains well-positioned versus peers.

TheStreet Ratings said: TheStreet Ratings team rates MGM RESORTS INTERNATIONAL as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate MGM RESORTS INTERNATIONAL (MGM) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its expanding profit margins and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and a generally disappointing performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • 36.85% is the gross profit margin for MGM RESORTS INTERNATIONAL which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of -14.34% is in-line with the industry average.
  • MGM RESORTS INTERNATIONAL has experienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, MGM RESORTS INTERNATIONAL continued to lose money by earning -$0.32 versus -$0.35 in the prior year. This year, the market expects an improvement in earnings ($0.48 versus -$0.32).
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 7.7%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • The debt-to-equity ratio is very high at 3.46 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, MGM maintains a poor quick ratio of 0.81, which illustrates the inability to avoid short-term cash problems.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 502.5% when compared to the same quarter one year ago, falling from -$56.81 million to -$342.26 million.

 

MAS Chart MAS data by YCharts

4. Masco (MAS - Get Report)
Sub-industry: Homebuilding & Building Products
Market Cap: $9.3 billion
Target Price: $30
Year-to-date return: 5.1%

Credit Suisse's Mike Dahl said: We expect improving growth for Masco given it's ~80% exposure to the recovering U.S. housing market (particularly R&R, which is 75% of end market exposure) and see potential for meaningful improvement in profitability for the cabinet segment over the next two years. Additionally, we see support for the stock driven by the recently announced share buyback, restructuring efforts, and upcoming spin of the Installation business. Sentiment is also less constructive on MAS, which we see as an opportunity as execution improves.

TheStreet Ratings said: TheStreet Ratings team rates MASCO CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate MASCO CORP (MAS) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in stock price during the past year, reasonable valuation levels, compelling growth in net income and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • MAS's revenue growth has slightly outpaced the industry average of 2.0%. Since the same quarter one year prior, revenues slightly increased by 3.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Building Products industry. The net income increased by 108.3% when compared to the same quarter one year prior, rising from $48.00 million to $100.00 million.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. In comparison to other companies in the Building Products industry and the overall market on the basis of return on equity, MASCO CORP has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.

 

MDLZ Chart MDLZ data by YCharts

5. Mondelez International (MDLZ - Get Report)
Sub-industry: Household, Personal Care Products & Beverage/Packaged Foods
Market Cap: $60 billion
Target Price: $42
Year-to-date return: 0.32%

Credit Suisse's Michael Steib said: With its strong emerging market platform (44% of sales) and excellent brands (Oreo, Cadbury, Trident), Mondelez is a key beneficiary of the consumer trend toward snacking in emerging markets. We think the appointment of Nelson Peltz to the Board will lead to better execution by current management and an improvement in operating margins to 15-16% by 2016. The recently announced divestiture of the coffee business is a good example of how we expect Peltz will continue to drive value creation for shareholders.

TheStreet Ratings said: TheStreet Ratings team rates MONDELEZ INTERNATIONAL INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate MONDELEZ INTERNATIONAL INC (MDLZ) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we also find weaknesses including deteriorating net income and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The debt-to-equity ratio is somewhat low, currently at 0.60, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.46 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • 38.06% is the gross profit margin for MONDELEZ INTERNATIONAL INC which we consider to be strong. Regardless of MDLZ's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.66% trails the industry average.
  • MONDELEZ INTERNATIONAL INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. However, the consensus estimates suggest that there will be an upward trend in the coming year. During the past fiscal year, MONDELEZ INTERNATIONAL INC reported lower earnings of $1.27 versus $1.28 in the prior year. This year, the market expects an improvement in earnings ($1.73 versus $1.27).
  • Net operating cash flow has significantly decreased to $2,413.00 million or 53.70% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Food Products industry. The net income has significantly decreased by 71.7% when compared to the same quarter one year ago, falling from $1,766.00 million to $500.00 million.

 

JWN Chart JWN data by YCharts

6. Nordstrom (JWN - Get Report)
Sub-industry: Broadlines & Department Stores
Market Cap: $15 billion
Target Price: $85
Year-to-date return: 0.71%

Credit Suisse's Michael Exstein said: Capital-intensive growth strategy through 2018 positions JWN for further relevance to core and targeted customers. The Trunk Club acquisition will be dilutive to EPS; however, we think a credit card receivables sale will likely close by mid '15 and allow JWN to buyback shares, potentially more than offsetting the dilution.

TheStreet Ratings said: TheStreet Ratings team rates NORDSTROM INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate NORDSTROM INC (JWN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, expanding profit margins, good cash flow from operations and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JWN's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 8.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Compared to its closing price of one year ago, JWN's share price has jumped by 32.71%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, JWN should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • NORDSTROM INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. Stable earnings per share over the past year indicate the company has sound management over its earnings and share float. We anticipate these figures will begin to experience more growth in the coming year. During the past fiscal year, NORDSTROM INC's EPS of $3.72 remained unchanged from the prior years' EPS of $3.72. This year, the market expects an improvement in earnings ($3.78 versus $3.72).
  • 41.58% is the gross profit margin for NORDSTROM INC which we consider to be strong. Regardless of JWN's high profit margin, it has managed to decrease from the same period last year.
  • Net operating cash flow has increased to $704.00 million or 16.94% when compared to the same quarter last year. Despite an increase in cash flow, NORDSTROM INC's cash flow growth rate is still lower than the industry average growth rate of 27.82%.

 


DG Chart DG data by YCharts

7. Dollar General (DG - Get Report)
Sub-industry: Food & Drug
Market Cap: $22 billion
Target Price: $80
Year-to-date return: 1.8%

Credit Suisse's Ed Kelly said: DG's failed bid for FDO is certainly a disappointment given the potential value creation for all shareholders, but we believe the stock still represents one of the most attractive investments in staples retail. Now that the fog has cleared on the outcome of this transaction, investors should begin to focus on the company's improving fundamental outlook, the possibility of more aggressive capital allocation, and maybe even some change to the strategic growth plan. Each could represent catalysts for the stock in our view, especially given that the valuation is near lower-growth peers.

TheStreet Ratings said: TheStreet Ratings team rates DOLLAR GENERAL CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate DOLLAR GENERAL CORP (DG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • DG's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 7.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • DOLLAR GENERAL CORP has improved earnings per share by 5.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DOLLAR GENERAL CORP increased its bottom line by earning $3.17 versus $2.86 in the prior year. This year, the market expects an improvement in earnings ($3.50 versus $3.17).
  • Net operating cash flow has increased to $353.62 million or 27.91% when compared to the same quarter last year. In addition, DOLLAR GENERAL CORP has also modestly surpassed the industry average cash flow growth rate of 27.82%.
  • The current debt-to-equity ratio, 0.52, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.11 is very weak and demonstrates a lack of ability to pay short-term obligations.

 

HD Chart HD data by YCharts

8. Home Depot (HD - Get Report)
Sub-industry: Hardlines
Market Cap: $150 billion
Target Price: $120
Year-to-date return: 9.3%

Credit Suisse's Seth Sigman said: We view HD as a best-in-class retailer with a strong management team that participates in one of the strongest segments of retail, marked by oligopoly pricing, reduced supply, and relative insulation from e-commerce. From a macro standpoint, we expect better housing turnover, a recovery in pent-up remodel work and product replacement in home products, appliances, and furnishings, and gradual improvements in household formation, a key variable that could add 50-100 bps to comp growth. HD also stands to benefit from the ongoing erosion of SHLD's retail business in appliances and tools. Lastly, internal opportunities include the company's focus on the Pro, increasing vendor collaboration, and additional supply chain improvements, which position HD well for higher sales productivity. Combined with share buybacks, which have been growing at a 5% CAGR, we expect double-digit earnings growth to continue despite limited square footage growth opportunities.

TheStreet Ratings said: TheStreet Ratings team rates HOME DEPOT INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate HOME DEPOT INC (HD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Powered by its strong earnings growth of 43.83% and other important driving factors, this stock has surged by 41.22% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • HOME DEPOT INC has improved earnings per share by 43.8% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HOME DEPOT INC increased its bottom line by earning $4.72 versus $3.75 in the prior year. This year, the market expects an improvement in earnings ($5.23 versus $4.72).
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Specialty Retail industry average. The net income increased by 36.1% when compared to the same quarter one year prior, rising from $1,013.00 million to $1,379.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 13.5%. Since the same quarter one year prior, revenues slightly increased by 8.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Specialty Retail industry and the overall market, HOME DEPOT INC's return on equity significantly exceeds that of both the industry average and the S&P 500.