Top Picks to capture the growth of Consumer Products industry
The consumer spending on food is not likely to fluctuate drastically, the level of spending on optional purchases like beauty care, cosmetics, electronics and specific foods, depends on the economic conditions (employment, wages, inflation, interest rates and consumer confidence) of the consumer. Higher levels of consumer confidence mean, consumers are more likely to increase their spending on optional purchases and big-ticket purchases and the likelihood of using credit to make purchases.
Historically low unemployment rates, rising incomes and low inflation contributed to strong consumer activity in Canada and United States, lately. Continued growth friendly environment and the initiatives to push growth rates higher have all yielded steady improvement in employment rates and incomes. After almost two decades, US consumer sentiment was close to 100 in 2018, from 2015 it stayed above 90 and it is showing strong consistency between 95 to 100 in the past one year or so. The improved economic conditions have brought new enthusiasm to consumer activity.
Top Picks to capture the growth in consumer products
Canada has seen unemployment rate declining from around 7 percent in 2016 to 5.8 percent in February of 2018. From around 5 percent in 2016, United States unemployment rate declined to 4.1 percent in February 2018.
The positive economic conditions that have consistently increased consumer spending in United States and Canada in the past few years has enlarged effective consumer products company’s revenues in a big way. Experts at Stockchase have selected well managed consumer product companies with bold strategies as their Top Picks.
Michael Simpson, CFA, senior vice-president at Sentry Investments recommends Allergan PLC. (AGN-N),
Erin Gibbs, vice-president at S&P Global Market Intelligence recommends Ulta Salon Cosmetics and Fragrance Inc. (ULTA-Q),
Ryan Modesto, Managing Partner at 5i Research recommends Dollarama Inc. (DOL-T),
Gradual increase in employment and wages is a great boon to the consumer product companies with sound product and service base. This is appropriate time to invest in consumer product companies, as they are the biggest beneficiaries of the employment and wage growth.
Top 14 Consumer Products Industry References
- Allergan PLC.
- Ulta Salon Cosmetics and Fragrance Inc.
- Dollarama Inc.
- Allergan – Company Profile
- About Ulta Beauty
- Dollarama – Investor relations
- Which economic factors most affect the demand for consumer goods?
- Deloitte – Consumer Products
- Canada Unemployment Rate
- United States Unemployment Rate
- Canada Consumer Confidence
- United States Consumer Sentiment
- Canada Average Hourly Wages
- United States Average Hourly Wages