Finding 5 consumer stocks up over 5% in 2017 hasn’t been too challenging. The sector seems to have made a decent start to the year from what I can see. The question is whether these 5 stocks can keep on rising during the rest of the year.
Shares in Unilever plc (LON:ULVR) (LSE:ULVR.L) have gained 17.6% this year. That’s largely because of the bid approach from Kraft Heinz. Although it was rejected, I think investors are still keeping a bid premium in Unilever’s stock price as they believe there may be another bid. Whether this happens or not, I am of the view that Unilever is a sound company with strong finances and high growth potential from its exposure to developing markets.
Likewise, I think Burberry Group plc’s (LON:BRBY) (LSE:BRBY.L) share price could continue to rise after its 17.5% gain so far this year. I’m optimistic about its potential under a new management team and think it could help to reorganise the business even better. The strength of the Burberry brand and its customer loyalty has always appealed to me as an investor. I feel the company’s stock price could perform well on a relative basis.
J Sainsbury plc’s (LON:SBRY) (LSE:SBRY.L) stock price has gained 5% year-to-date. I’m unsure as to how well the supermarket sector will perform this year and think stocks within the sector could find life difficult due to higher inflation. Sainsbury’s acquisition of Argos could be a good move in the long run in my opinion. I think the company has investment appeal, but it’s not my favourite consumer stock at the moment due to the uncertainty with the UK economy.
The stock price of Diageo plc (LON:DGE) (LSE:DGE.L) has gained 7% in 2017 so far. I think there is scope for more gains, since Diageo should be a beneficiary of weaker sterling. In my view, the pound could depreciate further during the year as Brexit moves nearer and talks progress between the EU and UK. I’m also upbeat about Diageo’s stock price because of the defensive growth prospects offered by the company in developing markets.
Imperial Brands PLC (LON:IMB) (LSE:IMB.L) is one of my favoured consumer stocks. Its shares are 7.5% higher since 1 January and I think more relative outperformance could lie ahead. I think a fast-growing dividend could hold investment appeal if inflation goes much higher in 2017. The potential within RRPs also means Imperial Brands could become a better growth stock in my opinion in the long run.