Settling on the right trend in consumer goods can mean big things for any company. Apple (AAPL) may be a tech company, but they’re still a prime example of this trend. It’s easy to forget that a mere five years ago no one had ever heard of a smart phone or a tablet (aside from Moses) and that Apple’s shares were trading for just over $85 a pop. However, Apple managed to tap into a demand that catapulted its profits and its stock into the stratosphere.
Being able to anticipate demand and create products that, while not a necessity, are still a must-have for most American consumers can mean big things for a business. As many consumer goods companies come and go, the ones that stick around over time are those that can find a strong market and plant their flag there firmly.
So, here are seven consumer discretionary stocks that are anticipating solid earnings in the near future and over the next five years. Each has projected annual EPS growth of 25 percent a year for the next five years while also expecting profits to spike in this year and the next. Finally, each is attractively priced based on projected growth with PEG values under 1.
Green Mountain Coffee Roasters (GMCR)
Market Cap: $6.83 billion Expected EPS Growth Next Five Years: 32.88 percent PEG: 0.69
Not a lot to be said about Green Mountain Coffee Roasters that wasn’t already said during their flap with Greenlight Capital’s (GLRE) David Einhorn last year, but they’re projecting solid growth over the next few years.
Goodyear Tire & Rubber Company (GT)
Market Cap: $2.70 billion Expected EPS Growth Next Five Years: 26.45 percent PEG: 0.34
Goodyear is anticipating putting tires to pavement in terms of earnings over the next five years, and the stock still appears to be priced well based on those projections.
Harman International Industries (HAR)
Market Cap: $3.31 billion Expected EPS Growth Next Five Years: 31.00 percent PEG: 0.67
Harman develops and manufactures electronics and audio products.
Modine Manufacturing (MOD)
Market Cap: $399.07 million Expected EPS Growth Next Five Years: 34.05 percent PEG: 0.38
Meritor (MTOR)
Market Cap: $721.01 million Expected EPS Growth Next Five Years: 51.00 percent PEG: 0.25
Stoneridge (SRI)
Market Cap: $253.03 million Expected EPS Growth Next Five Years: 35.20 percent PEG: 0.14
Tenneco (TEN)
Market Cap: $2.26 billion Expected EPS Growth Next Five Years: 33.08 percent PEG: 0.44
Interestingly enough, all four of the last four companies on this list are in the same industry: auto parts. While operating in different segments within that industry, it is intriguing to note that more than half of the companies that fit our screen all operate in the same area.
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