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US Starts COVID-19 Vaccine Drive: 5 Consumer Discretionary Picks

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Ritujay Ghosh
·5 min read
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The United States started COVID-19 vaccination on Dec 14, following FDA’s approval to the much-awaited vaccine from Pfizer, Inc. PFE and BioNTech SE BNTX last weekend. The news came as a relief amid growing cases of coronavirus in the United States that have kept people worried.

Moreover, hopes of another round of fiscal stimulus in the coming days also have been lifting investor spirit. Naturally, people are once again optimistic that a vaccine coupled with a stimulus will be a timely help and the economy will bounce back in 2021.

U.S. Delivers Vaccine Shots 

The first doses of the coronavirus vaccines started getting shipped over the weekend to all 50 states in the United States and the first doses of vaccine have started reaching citizens. Over the next few months, millions of Americans will receive the vaccine. The country already has a contract with Pfizer for millions of doses of vaccine and the pharmaceutical company is also in negotiations for another 100 million does next year.

The U.S. economy has been left battered and bruised following the coronavirus outbreak and the eventual lockdown imposed in March. Restrictions started getting lifted in June and after two rounds of fiscal stimulus, the economy is yet to get back on its feet.

However, hopes have once again risen that the economy will finally bounce back on its feet in the coming days once the citizens start getting vaccine and life gets back to normalcy. This will give the much required push to reopening or cyclical stocks along with already well-performing sectors like technology and communications.

Consumer Discretionary to Get a Boost

The consumer discretionary sector typically comprises goods and services that are non- essential in nature. These products can be easily done away with in times of crisis such as when there is low personal income or when spending power is too high.

People have been spending less on such items during the pandemic in order to curtail costs given the huge job losses and loss in personal income. However, consumer spending in the United States has been high despite this, which proves that the economy is getting back on its feet and will only perform better in the days to come once the vaccination drive is in full swing.

The Consumer Discretionary Select Sector SPDR (XLY) has returned 25.9% in the past six months and is only likely to do better once the economy bounces back on its feet completely.

Our Choices

Once the economy gets back to the pre-pandemic level it is likely that personal income will be more stable and people will be spending more comfortably. It thus makes for an opportune time to invest in these five consumer discretionary stocks.

WilliamsSonoma, Inc. WSM is a multi-channel specialty retailer of premium quality home products. Incorporated in 1973, the company has five brands and each of the brands is an operating segment.

The company’s expected earnings growth rate for the current year is 69.2%. The Zacks Consensus Estimate for current-year earnings has improved 29% over the past 60 days. WilliamsSonoma sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Reynolds Consumer Products Inc. REYN is a consumer branded and private label products company. It produces and sells branded and store-brand products which include cooking products, waste & storage products, and tableware. 

The company’s expected earnings growth rate for the current year is 36.6%. The Zacks Consensus Estimate for current-year earnings has improved 2.6% over the past 60 days. Reynolds Consumer Productsholds a Zacks Rank #2 (Buy).

Spectrum Brands Holdings Inc. SPB offers a portfolio of leading brands in several product categories like residential locksets, plumbing, electric shaving and grooming products, personal care products, small household appliances, specialty pet supplies, and lawn, garden and home pest control products and repellents.

The company’s expected earnings growth rate for the current year is 21%. The Zacks Consensus Estimate for current-year earnings has improved 17% over the past 60 days. Spectrum Brandshas a Zacks Rank #2.

YETI Holdings, Inc. YETI designs, markets and distributes products for the outdoor and recreation market under YETI brand primarily in the United States. The company's products are designed for use in outdoor activities, including recreational and professional pursuits targeting various categories, including hunting, fishing, camping, barbecue, farm and ranch activities and others. 

The company’s expected earnings growth rate for the current year is 45%. The Zacks Consensus Estimate for current-year earnings has improved 20.8% over the past 60 days. Yeti Holdings carries a Zacks Rank #2.

Vista Outdoor Inc. VSTO develops, manufactures and distributes optics, accessories and eyewear. The company operates in two segments: Shooting Sports and Outdoor Products. 

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 37.1% over the past 60 days. Vista Outdoors carries a Zacks Rank #2.

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Pfizer Inc. (PFE) : Free Stock Analysis Report
 
Spectrum Brands Holdings Inc. (SPB) : Free Stock Analysis Report
 
WilliamsSonoma, Inc. (WSM) : Free Stock Analysis Report
 
Vista Outdoor Inc. (VSTO) : Free Stock Analysis Report
 
YETI Holdings, Inc. (YETI) : Free Stock Analysis Report
 
BioNTech SE Sponsored ADR (BNTX) : Free Stock Analysis Report
 
Reynolds Consumer Products Inc. (REYN) : Free Stock Analysis Report
 
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