These Canadian Consumer Goods Stocks Are on Sale

Consider investing in these two Canadian retail stocks if you are looking for great bargains on the TSX.

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If you ask financial experts for advice about investing in the stock market, they will often tell you to focus on businesses you know and understand. When you know the business, it is easier to analyze the business model. Canadian retail stocks are some of the easiest to understand. People regularly come across consumer goods-focused brands, making them quite popular among retail investors.

Today, I will discuss two consumer goods stocks that are too attractively valued for you to ignore for your self-directed portfolio. If you are looking for stocks in the Canadian retail space, these two can be worth keeping on your radar right now.

Gildan Activewear

Gildan Activewear (TSX:GIL) is a $7.27 billion market capitalization apparel manufacturer. American-owned but based in Canada, Gildan Activewear stock is one of the leading players in the global apparel space. As of this writing, Gildan Activewear stock trades for $40.74 per share, reflecting 90.73% in capital gains in the last decade of trading.

For all its outsized gains, the stock also offers its investors quarterly payouts at a 2.49% dividend yield. With its cash flow and earnings expanding each year, Gildan Activewear has increased its dividends at an annualized 20% for the last decade.

The company’s sales increased significantly between 2020 and 2022, from $1.98 billion to $3.24 billion. Its operating income increased from a loss of $181 million in 2020 to $603 million in the green.

At current levels, it trades for 10.38 times the forward price to earnings. While macroeconomic factors may keep its bottom line under pressure this year, things can improve significantly once inflation gets under control. Analysts bullish on Gildan Activewear stock anticipate its share prices to rise by 25% in the next 12 months.


Aritzia (TSX:ATZ) is another top player in the consumer goods industry. The Vancouver-based $4.26 billion market capitalization women’s fashion brand sells a variety of lifestyle apparel through upscale retail stores throughout the country, in the U.S., and online. The brand has consistently increased its sales at a double-digit rate for a while, reflecting strong demand for its wares.

As of this writing, Aritzia stock trades for $37.16 per share, up by 235% since its COVID-induced March 2020 bottom. While it has been performing well for the most part, Aritzia stock took a hit after releasing its fourth-quarter results for fiscal 2022.

Many analysts anticipate a short-term decline in its share prices amid tough year-over-year comparisons and margin headwinds. If you have a long investment horizon, a further downturn can make it very attractively priced in the coming weeks.

Despite its recent troubles, the company’s fundamentals seem sustainable, and the demand for its products is strong. Aritzia’s management anticipates its top-line growth to register an annualized 15-17% until 2027. It can be an excellent time to buy its shares right now.

Foolish takeaway

With macroeconomic uncertainty, high inflation, and rising interest rates continuing to pressure consumer discretionary spending, the pullback in the consumer goods space offers a solid entry point for long-term investors.

Considering the state of the market right now, it can be the perfect time to gain exposure to this space. To this end, Canadian Tire stock and Gildan Activewear stock can be great additions to your self-directed portfolio.

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 Adam Othman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Aritzia. The Motley Fool recommends Gildan Activewear. The Motley Fool has a disclosure policy.

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