The easing inflationary pressures is a relief to households and businesses and should boost consumer demand. According to Fitch Ratings, consumer net worth is notably higher compared to the pre-pandemic period.
Moreover, excluding government transfers, real household income was approximately 1% higher year-over-year in 2022 despite the macroeconomic headwinds.
In addition, the global Consumer Packaged Goods market size is projected to reach $2.46 trillion by 2028 at a CAGR of 3%. The changing lifestyle of consumers in developed and developing countries should drive the market's growth.
Consumer spending showing resiliency in the face of the Fed’s aggressive action to slow the economy and tame inflation, helped the U.S. economy to end 2022 on a positive note. Real GDP increased at an annual rate of 2.9% in the last quarter.
Therefore, fundamentally strong consumer goods stocks Vivint Smart Home, Inc. (VVNT), Ennis, Inc. (EBF), and Mannatech, Incorporated (MTEX) might be ideal buys in 2023.
Vivint Smart Home, Inc. (VVNT)
VVNT engages in the sale, installation, servicing, and monitoring of smart home and security systems, primarily in the United States and Canada.
On November 28, 2022, VVNT announced a new feature for its customers to view solar production data from their solar panels directly in its app. This feature is the next step in further integrating solar energy into the Vivint Smart Home experience and helping customers achieve a smarter, greener, and safer home that saves them money.
VVNT’s forward EV/EBITDA of 6.79x is 31.7% lower than the industry average of 9.94x.
VVNT’s recurring and other revenue increased 13.6% year-over-year to $439.37 million in the fiscal third quarter, which ended September 30, 2022. Adjusted EBITDA increased 23.3% year-over-year to $195.50 million, while its income from operations increased 185.4% year-over-year to $21.15 million.
VVNT’s revenue for the fiscal fourth quarter that ended December 2022 is expected to come in at $424.25 million, indicating a 7.1% year-over-year growth. The company’s EPS for the same quarter is expected to increase by 8.7% from the prior-year quarter. Additionally, it has topped consensus revenue and EPS estimates in each trailing four quarters.
The stock has gained 131.53% over the past six months to close the last trading session at $11.97.
VVNT’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.
VVNT also has a B grade for Quality. It is ranked #13 out of 58 stocks in the Consumer goods industry.
To access additional ratings for VVNT’s Stability, Sentiment, Growth, Value, and Momentum, 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. It distributes business products and forms through independent distributors.
EBF’s forward EV/Sales of 1.11x is 39% lower than the industry average of 1.82x. Its forward Price/Sales multiple of 1.28 is 11.3% lower than the industry average of 1.45.
The company pays a $1.00 dividend annually, which translates to a yield of 4.68% at the current price. Its dividend payments have grown at a CAGR of 3.6% and 5.2% over the past three and five years. The company has a four-year average dividend yield of 4.80%. Also, it has paid dividends for eight consecutive years.
EBF’s revenue rose 7.1% year-over-year to $110.25 million in the third quarter that ended November 30, 2022. The company’s non-GAAP EBITDA increased 35.1% year-over-year to $20.80 million, and earnings per share came in at $0.44, up 51.7% from the prior-year quarter.
Street EPS estimate of $0.36 for the current fiscal fourth quarter (ending February 2023) reflects a rise of 33.3% year-over-year. Its revenue estimate for the same quarter of $101.85 million indicates an improvement of 2.2% from the prior-year quarter. Additionally, EBF has topped consensus revenue and EPS estimates in three of the trailing four quarters.
The stock has gained 22.3% over the past nine months to close the last trading session at $21.21.
EBF’s robust prospects are reflected in its POWR Ratings. The stock has an overall A rating, equating to a Strong Buy in our proprietary rating system.
EBF has an A grade for Quality and B in Growth, Sentiment, and Stability. It is ranked first in the same industry.
Click here to see the additional POWR Ratings for EBF (Value 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 December 15, 2022, MTEX announced its continued expansion into the ASEAN region, with the official launch into the Thailand market. This opening will bring MTEX’s global presence to 26 markets.
Al Bala, President and CEO of MTEX, said, “The expansion of Mannatech into Thailand will present an exciting opportunity for the company. As a global leader in the health and wellness industry, this expansion will help us continue to grow and reach more individuals around the world.”
In terms of the trailing-12-month EV/Sales, MTEX’s multiple of 0.16 is 91.1% lower than the industry average of 1.79. Also, its trailing-12-month Price/Sales multiple of 0.23 is 80.3% lower than the industry average of 1.16.
MTEX pays a $0.80 per share dividend annually, which translates to a 4.72% 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. The company has a four-year average dividend yield of 6.71%.
MTEX’s non-GAAP net sales stood at $38.90 million in the third quarter that ended September 30, 2022. The company’s total operating expenses decreased 5.4% year-over-year to $26.74 million. Also, its non-GAAP income from operations stood at $2.20 million.
The stock has gained 1.5% over the past month to close its last trading session at $16.95.
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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VVNT shares were trading at $11.98 per share on Tuesday afternoon, up $0.01 (+0.08%). Year-to-date, VVNT has gained 0.67%, versus a 8.23% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
3 Consumer Goods Stocks to Hold Onto in 2023 StockNews.com
