3 Consumer Stocks That Canadians Need to Watch in November

Consumer staple stocks could turn these stocks even higher with the holidays coming up.

Amy Legate-Wolfe

Author Bio Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Social Media Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published November 6, 2024 10:30 am EST

With November upon us, consumer stocks Dollarama (TSX: DOL), Canadian Tire (TSX: CTC.A), and Shopify (TSX: SHOP) are looking particularly promising. The holiday season is around the corner, and these companies are set to benefit from a surge in spending as consumers prepare for festivities and gift-giving. Recent earnings reveal strong foundations and growth potential, making them stocks to watch this month.

man shops in a drugstore — Source: Getty Images

Dollarama

First up, Dollarama has been on an impressive upward trend, with year-over-year revenue growth and profitability metrics that are particularly eye-catching. Dollarama’s accessible price points and range of goods make it a go-to for budget-conscious shoppers, especially as holiday spending ramps up.

With the stock trading at a forward price-to-earnings (P/E) of 28.33, it maintains a strong position in the market. Dollarama’s commitment to expanding its footprint and increasing product diversity suggests it will continue to capture consumer dollars effectively.

Dollarama’s recent performance has also been strengthened by increased institutional interest, with nearly 45% of its shares held by institutions, indicating confidence from major investors. Plus, its dividend rate, though modest at 0.25%, adds an extra incentive for long-term investors seeking stable returns alongside growth potential. As more Canadians turn to Dollarama for affordable holiday items, the company’s stock is positioned to remain resilient.

Canadian Tire

Canadian Tire, a name synonymous with holiday shopping in Canada, also stands out. This retailer not only caters to those looking for gifts but also supplies holiday decor and winter preparation essentials. Canadian Tire’s recent earnings showcase solid profitability, with a trailing P/E of 21.93 and a dividend yield of 4.67%, appealing to income-focused investors. Given its strong brand and extensive reach, Canadian Tire is well-positioned to enjoy holiday sales growth, especially as Canadians prepare for winter.

Canadian Tire’s valuation metrics also highlight its long-term appeal. Trading with a book value per share of 101.83, the stock shows a solid foundation. Its recent high of $163 is evidence of market optimism. Despite slight fluctuations, Canadian Tire’s steady performance and loyal customer base provide it with a strong buffer against economic uncertainties.

Shopify

Finally, Shopify has become essential for online retailers, offering an adaptable platform for businesses of all sizes to reach consumers worldwide. As online shopping continues to grow in popularity, Shopify’s stock benefits from increased activity, especially during the holiday season when e-commerce spending spikes. With a forward P/E of 59.17 and robust quarterly revenue growth of 20.7%, Shopify is a tech powerhouse poised to capture a significant share of holiday shopping dollars.

The tech stock stands out for its innovation. Its commitment to expanding platform capabilities, such as introducing artificial intelligence (AI)-driven tools, strengthens its appeal to digital merchants. The stock’s impressive market cap growth, rising from $95 billion to $140 billion over the past year, speaks volumes about its increasing value and relevance. Shopify’s strategic initiatives position it as a major player in e-commerce, especially as holiday shopping gravitates more toward online avenues.

Bottom line

For investors seeking diverse growth avenues, these three stocks offer unique advantages. Dollarama caters to budget-savvy shoppers, Canadian Tire is a holiday shopping mainstay, and Shopify leverages the e-commerce boom. Together, these represent different facets of consumer spending and provide a well-rounded approach to capturing seasonal shopping trends.

As holiday spending heats up, Dollarama, Canadian Tire, and Shopify present compelling cases for November. Each company’s recent earnings, growth potential, and seasonal appeal make them attractive additions to any watchlist. Whether you’re looking for retail resilience, dividend income, or e-commerce growth, these stocks have something to offer as we head into the year’s most festive months.