The Top Consumer Stocks to Buy With $100

Do you want to beat the broader market? Consider buying these three consumer discretionary stocks trading under $100.

| More on:

Image source: Getty Images

Shares of consumer companies have proven resilient to the macro headwinds in 2022. For instance, Metro stock has outperformed the broader markets and has risen about 16% year to date. In comparison, the S&P/TSX Composite Index is down about 8%. 

The outperformance of consumer stocks comes from their defensive business and ability to attract consumers, even in a challenging macro backdrop. 

While 2022 is coming to an end, the economic uncertainty suggests that stocks could continue to remain under pressure, making it hard to generate capital gains. However, the low-volatility consumer stocks are poised to generate healthy returns due to the steady demand. Moreover, these companies will likely boost shareholders’ value through higher dividend payments. Also, the addition of these stocks to your portfolio will reduce the downside risk. 

With this backdrop, let’s look at three stocks (besides Metro) that you can buy for less than $100 and beat the benchmark index. 

Dollarama 

With high inflation taking a toll on consumer spending, Dollarama (TSX:DOL) stock is a lucrative investment for safety and growth. Its value pricing and broad offerings drive customers and support its growth. It’s worth highlighting that Dollarama stock has grown about 27% in 2022, beating the broader markets by a significant margin.

Besides its broad assortment of consumable products, its extensive store base and presence across all 10 provinces support its growth and provide a competitive advantage. 

Investors should note that Dollarama’s top line has grown at a CAGR (compound annual growth rate) of 11% since 2011. Furthermore, its earnings increased at an average annualized growth rate of 17%. 

Management is confident that high inflation and demand for consumable products will drive its top line, thanks to its value proposition. Further, its continued expansion of stores is a positive. Investors are also likely to benefit from its solid dividend payments. 

Alimentation Couche-Tard 

Alimentation Couche-Tard (TSX:ATD) is another top consumer stock that investors can buy with $100. Thanks to its recession-resilient business and strong growth, Couche-Tard is valuable stock for investors looking for stability, growth, and income. Like Dollarama, Couche-Tard stock has outperformed the benchmark index in 2022. 

Moreover, it is poised to deliver stellar growth on the back of its large store base in Canada and a growing foothold in the United States. Also, its focus on strategic acquisitions will likely accelerate its growth rate and support its stock price. 

Its sales and EPS (earnings per share) have had a CAGR of 11% and 20% in the past decade. Moreover, Couche-Tard increased its dividend at a CAGR of 24.7%. The momentum will likely sustain in the coming years due to its value pricing, strength in the U.S. business, and focus on reducing costs. Also, it has low-cost debt and a solid balance sheet to support its long-term growth.

Aritzia 

Aritzia (TSX:ATZ) is the final stock on this list. Though its shares are down in 2022, it continues to perform well due to the solid demand for its products. This fashion house has grown its revenues by 19% since 2018. During the same period, its earnings increased at a CAGR of 24%. 

Looking ahead, the solid demand, boutique and product expansion, and strengthening of its omnichannel business will support its growth and stock price. Moreover, management is confident of growing its top line at a CAGR of 15-17% through 2027. Further, its EPS growth is forecasted to beat its top-line growth. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Sneha Nahata has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard and Aritzia. The Motley Fool has a disclosure policy.

More on Dividend Stocks

Business people standing near houses models
Dividend Stocks

Why Canadian Apartment Properties REIT Notched a 15% Gain in January 2023

CAPREIT may not look like a deal at the outset, but long-term growth projections would disagree – especially when considering…

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

1 Oversold Dividend Stock (With a 8% Yield) I’m Buying Right Now

Real estate investment trusts Northwest Healthcare offers investors a tasty dividend yield of almost 8%.

Read more »

A red umbrella stands higher than a crowd of black umbrellas.
Dividend Stocks

2 Recession-Resistant Stocks to Buy for Steady Gains in 2023

Investors worried about a recession can look to buy utility stocks such as Hydro One and Waste Connections right now.

Read more »

Dial moving from 4G to 5G
Dividend Stocks

Down by 15%: Is BCE Stock a Good Investment in January 2023?

Few companies are truly “too big to fail,” but most market leaders are far more resilient against market headwinds or…

Read more »

edit Business accounting concept, Business man using calculator with computer laptop, budget and loan paper in office.
Dividend Stocks

Looking for $200/Month in Alternative Income? Buy 530 Shares of This Stock

Do you want to earn $200 monthly alternative income for the next few years? Then accelerate your investments in this…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

Deadline Coming: 3 TFSA Stocks to Buy Now Before Dividend Payouts

Invest in RNW stock and 2 other TFSA friendly names before this fast-approaching deadline to get the full 2023 dividend.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

Passive Income: How to Earn Nearly $367 Per Month in Your TFSA Portfolio

Top TSX dividend stocks now trade at discounted prices for TFSA investors seeking passive income.

Read more »

Hand arranging wood block stacking as step stair with arrow up.
Dividend Stocks

3 Stocks I’d Buy — But I’m Waiting for a Dip

After the recent bounce, It may be smart for investors to wait for a dip before they buy these solid…

Read more »