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3 Stocks to Keep Soaring as the 'Do-it-Yourself' Trend is Likely to Stay

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Vrishali Bagree
·5 min read
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The coronavirus outbreak has been a massive blow to the world. Lockdowns and other government restrictions kept Americans confined at home for a major part of 2020. However, as the show must go on, people gradually adapted to the “new normal.”

Certainly, prolonged stay-at-home and social-distancing practices have impacted consumers’ living patterns – which now includes a great deal of ‘do-it-yourself’ or DIY activities. In fact, even with things having reopened and optimism surrounding a vaccine, the DIY trend is not likely to change anytime soon. From cooking to undertaking home-improvements and to self-grooming and personal care, people have started spending more time on DIY activities.

Temporary closure of restaurants and cafes together with tighter pockets compelled people to return to the cook-at-home habits. Moving on, increased time spent indoors caused a number of individuals to focus on revamping homes to align them with work-from-home and remote schooling needs, simultaneously making it a comfortable and enjoyable space. Apart from renovating homes, Americans have been indulging in increased personal care and self-grooming activities. Though makeup trends have dimmed owing to fewer social gatherings and mask wearing, demand for skincare and personal care items has risen.

New Normal to Continue

We note that even after restaurants, cafes and salons reopened, traffic is well below pre-pandemic levels as a number of people are still adhering to social distancing amid the virus fears, while some have also got acclimatized to the new normal of doing things themselves. To top it, easier availability on online platforms has made things easier for people to get items related to all DIY activities. Clearly, the DIY trend, established in 2020, is most likely to stay for a while.

That said, we have handpicked three companies which cater well to the DIY trend and have seen their stocks rally at least 20% so far this year. These stocks  are likely to keep benefiting from the coronavirus-encouraged DIY trend.

3 Stocks to Watch 

B&G Foods, Inc. BGS is one such stock, which is gaining on rising demand amid the pandemic-led increased at-home consumption and pantry loading trends. The manufacturer of high-quality, shelf stable food products has soared a whopping 68.6% year to date. Some of the popular brands of the company are Green Giant, Back to Nature, McCann’s, Ortega, Victoria and Mama Mary. Markedly, the Zacks Rank #2 (Buy) company has been witnessing an increase in demand since the second half of March 2020. In this regard, B&G Foods’ higher net sales to mass merchants, warehouse clubs, supermarkets, wholesalers and e-commerce consumers have more than offset lower demand from Foodservice clients. Management on its last earnings release stated that it expects robust demand throughout the fourth quarter and in 2021. Notably, B&G Foods is strengthening its production capacity to meet the heightened market needs. Additionally, the company is benefiting from higher online sales, backed by efficient delivery services of its retail customers. Encouragingly, the Zacks Consensus Estimate for its 2021 earnings indicates a rise of 2.6% from the year-ago period’s levels.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Renowned home improvement retailer, The Home Depot, Inc. HD, is benefiting from increased renovation and maintenance projects amid the pandemic. The company is stepping up assortments and delivery systems to effectively cater to market requirements. Moreover, the company follows a flexible interconnected infrastructure, which aids in quickly adapting to changing customer preferences. The Atlanta, GA-based company is gaining from broad-based strength across stores and geographies as well as growing presence in the digital arena. Toward this end, Home Depot is working toward augmenting omni-channel operations such as curbside pickup and buy online pick-up in store services, with convenient pickup lockers. Encouragingly, the Zacks Rank #3 (Hold) stock has surged 23.3% in the year-to-date period. The Zacks Consensus Estimate for its fiscal 2021 earnings indicates a rise of 4.2% from the year-ago period’s levels.

Church & Dwight Co., Inc. CHD is also worth a mention. The manufacturer, developer and marketer of household, personal care and specialty products has rallied 24.4% so far in 2020. The Zacks Rank #3 company has been gaining from rising demand for cleaning materials as well as personal care and self-grooming related products amid the coronavirus-led increased stay-at home trend. The company has been witnessing consumption growth in several domestic categories, especially for products like women’s hair removal, cleaners and baking soda, to name a few. Incidentally, the company’s hair-removal brand, FLAWLESS, has been witnessing robust consumption due to customers’ reduced visits to salons. The brand is poised to keep gaining from the rising at-home grooming trend. It has also been undertaking solid advertising plans for FLAWLESS. All in all, Church & Dwight has been on track with boosting manufacturing capacity at plants to tap the rise in demand triggered by the pandemic. The company earlier predicted that consumers are likely to continue consolidating shopping trips through stock-piling, which in turn is likely to keep contributing toward demand.  Additionally, on its last earnings call, the company stated that its online sales surged 77%. Impressively, the Zacks Consensus Estimate for its 2021 earnings indicates a rise of 7.7% from the year-ago period’s levels.

Zacks Top 10 Stocks for 2021

In addition to the stocks discussed above, would you like to know about our 10 top tickers for the entirety of 2021?

These 10 are painstakingly hand-picked from over 4,000 companies covered by the Zacks Rank. They are our primary picks to buy and hold. Start Your Access to the New Zacks Top 10 Stocks >>


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The Home Depot, Inc. (HD) : Free Stock Analysis Report
 
Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report
 
B&G Foods, Inc. (BGS) : Free Stock Analysis Report
 
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