Despite supply chain disruptions, labor shortages, and high inflation, the household and personal products industry has rebounded thanks to rising consumer spending. Moreover, as most retailers in this space have increased their online presence, their products have become much more accessible to a broader range of consumers.
The COVID-19 pandemic has also led to an increasing number of customers opting for personal care products, driving the industry’s sales. According to a Technavio report, the personal care market is expected to grow at a CAGR of 5.7% by 2025.
So, it could be wise to bet on fundamentally sound household and personal products stocks USANA Health Sciences, Inc. (USNA) and Nature's Sunshine Products, Inc. (NATR), which are currently trading at discounts to their peers.
USANA Health Sciences, Inc. (USNA)
USNA develops, manufactures, and sells science-based nutritional and personal care products. The company offers USANA nutritional products that comprise essentials/CellSentials, such as vitamin and mineral supplements that provide a foundation of total body nutrition for various age groups.
On February 8, 2022, Kevin Guest, USNA’s CEO and Chairman of the Board said, “During the year, we will continue investing in technology and digital tools to improve our overall customer experience further. We will continue to lay the foundations for expansion into new markets and pursue accretive business development opportunities."
In terms of forward EV/EBIT, USNA’s 9.18x is 45.9% lower than the industry average of 16.97x. The stock’s 11.51x forward P/CF ratio is 19% lower than the industry average of 14.20x.
For fiscal 2023, analysts expect USNA’s EPS and revenue to increase 10.2% and 5.1% year-over-year to $6.37 and $1.23 billion, respectively. Over the past five years, the stock has gained 46% to close yesterday’s trading session at $85.29.
It’s no surprise that USNA has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
The stock has an A grade for Value and Quality and a B grade for Sentiment and Stability. Click here to see USNA’s rating for Growth and Momentum as well. USNA is ranked second out of eight stocks in the A-rated Medical - Consumer Goods industry.
Nature's Sunshine Products, Inc. (NATR)
NATR is a natural health and wellness company that primarily manufactures and sells nutritional and personal care products. The company offers general health products related to blood sugar support, bone health, cellular health, sleep, sports and energy, and vision.
On January 18, 2022, NATR announced the launch of AIVIA, a new line of nutrition products designed to support fitness and weight management goals. The collection features clean, natural ingredients to nourish active lifestyles, leading to increasing demand for its products.
In terms of forward EV/S, NATR’s 0.70x is 63.9% lower than the industry average of 1.94x. The stock’s forward EV/EBITDA ratio of 6.75x is 45.7% lower than the industry average of 12.43x.
Analysts expect NATR’s EPS and revenue to increase 45.1% and 7.3% year-over-year to $1.19 and $467.10 million, respectively, in fiscal 2022. Over the past six months, the stock has gained 6.1% to close yesterday’s trading session at $17.65.
NATR’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to a Strong Buy in our proprietary rating system.
The stock has an A grade for Value, Sentiment, and Quality and a B grade for Stability. Within the same industry, NATR is ranked first. To see NATR’s ratings for Momentum and Growth, click here.
USNA shares were trading at $87.24 per share on Thursday afternoon, up $1.95 (+2.29%). Year-to-date, USNA has declined -13.79%, versus a -5.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Nimesh Jaiswal
Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles.
2 Dirt-Cheap Household & Personal Products Stocks to Buy in February StockNews.com
