The improving quality of life and society’s growing interest in health and hygiene has heightened the demand for household and personal products. Also, there has been a significant rise in overall consumer spending on these products with their increasing availability on online platforms.
In addition, the increasing demand for organic ingredients in skincare, haircare, oral care, makeup, and color cosmetics is driving considerable demand for personal care products. According to reports, the global organic personal care and cosmetic products market size is expected to reach $58,615.6 million by 2031, growing at a 5.3% CAGR.
Given an almost inelastic demand for these products, we think it could be wise to bet on quality household and personal products stocks The Procter & Gamble Company (PG), Unilever PLC (UL), Colgate-Palmolive Company (CL), and USANA Health Sciences, Inc. (USNA).
The Procter & Gamble Company (PG)
PG offers packaged products to consumers in America, Europe, the Asia Pacific, Greater China, India, the Middle East, and Africa. The Cincinnati, Ohio-based concern has five operational segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care. The Beauty segment offers conditioners, shampoos, styling aids, and treatments.
This month, PG Ventures reintroduced Bodewell, a range of uniquely designed skin care products for people with eczema and psoriasis. 'Bodwell's products treat tough skin issues like eczema and psoriasis with proven active ingredients and soothing botanicals. In the second quarter, ended Dec. 31, 2021, PG’s net sales increased 6.1% year-over-year to $20.95 billion. The operating income amounted to $5.17 billion, while its net income increased 9.6% year-over-year to $4.22 billion. The company's EPS rose 12.9% from the prior-year quarter to $1.66.
The consensus EPS estimate for the third quarter ended March 2022 represents 3.5% year-over-year growth to $1.30. Analysts expect PG’s revenue to increase 3.5% year-over-year to $18.74 billion for the third quarter, ending March 31, 2022. In addition, it has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters. The stock has gained 13.7% in price over the past year and 13.5% over the past nine months.
PG's POWR Ratings reflect this promising outlook. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
PG is also rated B for Stability and Quality. Within the Consumer Goods industry, it is ranked #12 of 61 stocks.
To see additional POWR Ratings for Value, Growth Sentiment, and Momentum for PG, click here.
Unilever PLC (UL)
Headquartered in London, UL is a fast-moving consumer goods company. It operates through three segments: Beauty and Personal Care segment, which provides skincare and hair care products; Foods & Refreshment segment, which offers ice cream, soups, bouillons, seasonings, mayonnaise, ketchup, and tea categories; and Home Care segment, which provides fabric solutions and various cleaning products.
UL's turnover increased 3.4% year-over-year to €52.44 billion ($57.73 billion) for its fiscal year ended Dec.31, 2021. Its operating profit improved 4.8% year-over-year to €8.70 billion ($9.58 billion), while its net profit grew 9% from its year-ago value to €6.62 billion ($7.29 billion). The company's EPS increased 9.4% from its prior-year period to €2.32.
Analysts expect UL's revenue to increase 3% year-over-year to $61.79 billion in its fiscal year 2022. The company's EPS is expected to grow 16.4% year-over-year to $3.32 in its fiscal 2023.
UL's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our POWR Ratings system. The stock also has a B grade for Value and Stability. Within the Consumer Goods industry, it is ranked #9.
In total, we rate UL on eight distinct levels. Beyond what we have stated above, we have also given UL grades for Growth, Momentum, Quality, and Sentiment. Get all the UL ratings here.
Colgate-Palmolive Company (CL)
CL, in New York City, along with its subsidiaries, manufactures and sells consumer products internationally. The company has two operational segments: Oral, Personal, and Home Care, which offers toothpaste, toothbrushes, mouthwash, bar, and liquid hand soaps; and Pet Nutrition, which provides pet nutrition products for everyday nutritional needs.
In January, CL 3Shape, a digital dentistry 3D scanner software leader, launched the Colgate Illuminator–an in-clinic predictive tool that shows personalized results for consumers of Colgate's high-impact teeth whitening product, Colgate Optic White Professional. This collaboration aims to help remove the guesswork and reduce the anxiety patients often feel when they visit a dentist to discuss tooth whitening treatments.
During its fourth quarter, which ended Dec. 31, 2021, CL's net sales increased 1.8% year-over-year to $4.40 billion. Its operating profit amounted to $365.00 million, while its net income came in at $148.00 million. The company's EPS amounted to $0.18.
The consensus EPS estimate for the second quarter, ended June 30, 2022, represents 0.3% year-over-year growth to $0.80. Analysts expect its revenue to increase 1.6% year-over-year to $4.41 billion for the first quarter, ending March 31, 2022. In addition, it has an impressive earnings surprise history; it surpassed the consensus EPS estimates in each of the trailing four quarters.
It is no surprise that CL has an overall B rating, which equates to Buy in our POWR Ratings system. CL has an A grade for Quality and a B for Stability. In the Consumer Goods industry, it is ranked #11.
Click here to see the additional POWR Ratings for CL (Growth, Value, Momentum, and Sentiment).
USANA Health Sciences, Inc. (USNA)
USNA develops, manufactures, and sells science-based nutritional and personal care products. The Salt Lake City, Utah, company provides nutritional products that comprise essentials/CellSentials, such as vitamin and mineral supplements that provide a foundation of total body nutrition for various age groups. The company is based in Salt Lake City, Utah.
Last month, the University of Miami (UM) Athletics announced a new partnership with USNA to assist student-athletes across Hurricanes’ teams. USNA offers high-quality, NSF-tested nutritional products to more professional and elite athletes than any other nutritional supplement company globally, including USA Swimming, USA Wrestling, and U.S. Ski and Snowboard.
For the fourth quarter, ending Jan. 1, 2022, USNA's net sales amounted to $267.30 million. Its earnings from operations came in at $31.51 million, while its net earnings amounted to $20.32 million. The company's EPS was reported at $1.03 over the period.
The consensus EPS estimate for the third quarter, ended Sept. 2022, represents 7% year-over-year growth to $1.46. Analysts expect its revenue to increase 7.3% year-over-year to $294.34 million for the third quarter, ending Sept. 30, 2022.
USNA's strong fundamentals are reflected in its POWR Ratings. The stock has an overall A rating, which equates to Strong Buy in our POWR Ratings system. The stock also has an A grade for Value and Quality and a B for Stability. Within the A-rated Medical - Consumer Goods industry, it is ranked #2 of 8 stocks.
Beyond what we have stated above, we have also given USNA grades for Growth, Momentum, and Sentiment. Get all the USNA ratings here.
Click here to checkout our Healthcare Sector Report for 2022
PG shares were trading at $150.50 per share on Thursday afternoon, down $0.32 (-0.21%). Year-to-date, PG has declined -7.50%, versus a -5.43% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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