Due to the rise of the FMCG market and rising demand for luxury goods, the consumer goods industry is expected to thrive. So, I think it might be ideal to buy Kimberly-Clark Corporation (KMB), Ennis, Inc. (EBF), and Mannatech, Incorporated (MTEX), considering their strong fundamentals.
U.S. consumer spending increased last month, with households boosting purchases at online retailers as well as spending more at restaurants and bars, showing resilience. Retail sales increased 0.4% in April.
Moreover, the global consumer products and retail market is expected to exhibit a CAGR of 7.5% until 2028.
In addition, fast-moving consumer goods (FMCG) and consumer packaged goods (CPG) markets have experienced tremendous expansion due to technological developments and rising consumer awareness. The market is predicted to grow at a CAGR of 7.5% until 2030.
On the other hand, demand for personal luxury goods is driving the worldwide specialty consumer products business. The specialty consumer products market is expected to be worth $386.73 billion by 2027, growing at a significant annual growth rate of 5.2% during the period.
Take a look at the stocks mentioned above:
Kimberly-Clark Corporation (KMB)
KMB manufactures and markets personal care and consumer tissue products worldwide. It operates through three segments: Personal Care; Consumer Tissue; and K-C Professional.
KMB’s trailing 12-month EBITDA margin of 17.31% is 74.5% higher than the 9.92% industry average. Its trailing 12-month net income margin of 9.75% is 209% higher than the 3.16% industry average.
On April 20, KMB declared a quarterly dividend of $1.18, payable on July 5, 2023.
The company pays a $4.72 dividend annually, which translates to a yield of 3.46% at the current price level. Its dividend payments have grown at CAGRs of 3.9% over the past three years. The company has a four-year average dividend yield of 3.26%.
KMB’s net sales increased 2% year over year to $5.20 billion in the first quarter that ended March 31, 2023. Also, its gross profit increased 13.6% year-over-year to $1.73 billion, and net income per share increased 7.7% year-over-year to $1.67.
KMB’s revenue is expected to increase 1.1% year-over-year to $5.12 billion for the fiscal second quarter ending June 2023. The company’s EPS for the same quarter is expected to increase 8.2% year-over-year to $1.45. Also, the company has surpassed revenue and EPS estimates in three of the trailing four quarters, which is impressive.
KMB gained 8% over the past three months to close its last trading session at $136.60.
KMB’s POWR Ratings reflect its promising outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
KMB also has a B grade for Quality and Stability. It is ranked #5 out of 51 stocks in Consumer Goods industry.
For additional ratings for KMB’s Growth, Value, Momentum, and Sentiment, click here.
Ennis, Inc. (EBF)
EBF designs, manufactures, and sells business forms and other business products. The company offers snap sets, continuous forms, laser cut sheets, tags, labels, envelopes, integrated products, jumbo rolls, and pressure-sensitive products.
On May 23, 2023, EBF announced its acquisition of the real estate and operating assets of Stylecraft Printing Company in Canton, Michigan. Stylecraft is a trade only printer since 1967 specializing in business forms, integrated products, and commercial printing.
EBF’s trailing 12-month EBITDA margin of 17.82% is 34.7% higher than the 13.23% industry average. Its trailing 12-month net income margin of 11% is 70.6% higher than the 6.42% industry average.
The company pays a $1.00 dividend annually, which translates to a yield of 4.99% at the current price level. Its dividend payments have grown at CAGRs of 3.6% and 4.6% over the past three and five years, respectively. The company has a four-year average dividend yield of 4.84%.
EBF’s revenue rose 3% year-over-year to $102.7 million in the fourth quarter that ended February 28, 2023. The company’s non-GAAP EBITDA increased 37.1% year-over-year to $20.48 million. Also, its earnings per share came in at $0.47, up 80.8% from the prior-year quarter.
Street’s EPS is estimated to be $0.36 for the fiscal first quarter ending May 2023. Its revenue estimate for the same quarter is expected to be $104.12 million. Additionally, EBF has topped consensus revenue estimates in each of the trailing four quarters.
The stock has gained 12.9% over the past year to close the last trading session at $20.05.
EBF’s robust prospect is reflected in its POWR Ratings. The stock has an overall B rating, equating to Buy in our proprietary rating system.
EBF has an A grade for Quality and B for Sentiment and Stability. It is ranked #2 in the same industry.
Click here for the additional POWR Ratings for EBF (Value, Growth, and Momentum).
Mannatech, Incorporated (MTEX)
MTEX operates as a health and wellness company worldwide. It develops, markets, and sells nutritional supplements; topical and skin care, anti-aging products; and weight-management products.
On April 18, 2023, MTEX announced the formation of a new wholly-owned subsidiary that will serve as its innovation hub. After many months of study and exploration, this subsidiary is introducing the brand Trulu to the gig economy.
Its trailing 12-month asset turnover ratio of 2.48x is 175.2% higher than the 0.90x industry average. Its trailing 12-month gross profit margin of 75.97% is 142.3% higher than the 31.36% industry average.
On May 25, MTEX announced that its Board of Directors declared a cash dividend of $0.20 per share of common stock, payable on June 29, 2023
MTEX pays a $0.80 per share dividend annually, which translates to a 6.29% yield on the current price. Its dividend payments have grown at a CAGR of 17% and 9.9% over the past three and five years, respectively. It has a four-year average dividend yield of 6.53%.
MTEX’s net sales increased 5.3% year-over-year to $34.11 million in the fiscal first quarter that ended March 31, 2023. The company’s net income increased 350.7% year-over-year to $604 thousand. Also, its income per common share increased 433.3% year-over-year to $0.32.
The stock gained 4.8% intraday to close its last trading session at $12.73.
MTEX’s POWR Ratings reflect its positive outlook. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
MTEX also has an A grade for Value and Quality and a B for Sentiment. It is ranked #4 in the same industry.
Beyond what is stated above, we’ve also rated MTEX for Growth, Stability, and Momentum. Get all MTEX ratings here.
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KMB shares were unchanged in premarket trading Monday. Year-to-date, KMB has gained 1.37%, versus a 10.25% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
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