6 Consumer Stocks That Have Beaten The Market

Consumer companies are interesting to most of the population since they offer goods and services that are recognisable to the common consumer.

Investors might be interested to know that the Singapore stock market has a number of consumer stocks that have beaten the market over the last 10 years. These would be companies that provide anything from beverages to vehicles and daily newspapers.

A recent report from bourse operator Singapore Exchange Limited (SGX: S68) highlighted some of those market-beating consumer companies. Here are five interesting points on them (data as of 18 March 2016, unless otherwise stated):

  1. There are three consumer discretionary stocks and three consumer stocks among the 30 constituents of Singapore’s market barometer, the Straits Times Index (SGX: ^STI). The sextet carry some heft as they represented nearly 15% of the Straits Times Index’s weighting.
  2. Interestingly, the six companies have produced an average return of 13.2% per year over the last 10 years with the lowest being an annual return of 5.6%. These handsome returns have likely outpaced the returns of the SPDR STI ETF (SGX: ES3), an exchange-traded fund (ETF) which acts as a proxy to the Straits Times Index. In the 10 years ended 29 February 2016, the ETF had generated annualised gains of merely 3.85%.
  3. The largest of the lot would be Wilmar International Limited (SGX: F34). The agri-business giant weighed in with a hefty market capitalisation of $20.9 billion. This is followed by alcoholic beverages powerhouse Thai Beverage Public Company Limited (SGX: Y92), which had a market capitalisation of $18.3 billion. Both companies carry a fair amount of debt, though. At the end of 2015, Wilmar and Thai Beverage had total debt of US$17.4 billion and THB44.3 billion, respectively.
  4. Jardine Cycle & Carriage Ltd (SGX: C07) came in at third place on the market cap-scale. The vehicle distributor, though, came out tops when it comes to returns. It logged in an annualized return of 18.1% over the last 10 years.
  5. Rounding out the sextet would be the trio of Golden Agri-Resources Ltd (SGX: E5H),  Genting Singapore PLC (SGX: G13), and Singapore Press Holdings Limited (SGX: T39). The first, a palm oil plantation firm, recorded annualised returns of 15.8% over the past 10 years. But, Golden Agri-Resources has performed poorly over the past five years, delivering negative returns. It’s a similar story for Genting Singapore PLC – its 10-year annualisd returns came in at 10.6% whereas the self-same figure for the past five years was a negative 14.8%.

The contrast in returns over five year periods and ten year periods for some of the stocks poses an interesting question for the investors: Will the returns of the six consumer stocks profiled here over the past decade be similar to what they can achieve over the next 10 years? This will be interesting to ponder.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.