While technology stocks get a lot of attention from the media, there are a lot of of attractive options in the consumer goods space as well. Here are four stocks in that sector that I'd buy without any hesitation.
Amazon
While often classified as a consumer goods stock, Amazon (AMZN 1.86%) is really a combination of a consumer goods company and a technology company. It operates the largest e-commerce and logistics company in the world, where it sells both its own goods and those of third parties. This continues to be a steadily growing business, with its North American sales rising 9% last quarter and international sales up 12%.
Operating income for its retail businesses has been growing even more quickly, as the company has been using artificial intelligence (AI) to help improve efficiency both within its warehouses and on its delivery routes. It has also continued to see strong growth in higher-margin sponsored ads, off an already pretty large base.
Its largest business by profitability, though, is Amazon Web Services (AWS), its cloud computing business. It's growing quickly, with revenue up 19% last quarter, as the company provides foundation models for AI and helps customers build out their own AI models and applications through its BedRock and SageMaker solutions. It is currently the largest cloud infrastructure company in the world, holding a 31% share of that market.
Amazon has a long history of innovation and investing to win, and this ethos should help it continue to be a long-term winner.
Image source: Getty Images
Philip Morris International
Philip Morris International (PM -0.74%) is a rare combination of a growth stock in a defensive industry. Though it has no U.S. exposure when it comes to traditional cigarettes, this part of the company's business is still growing through a combination of price increases and modest volume growth. However, Philip Morris' big growth driver has been its smokeless portfolio.
The company has seen huge growth from Zyn, a nicotine pouch made with nicotine powder and flavoring instead of tobacco. Last quarter, sales for the product continued to surge, with volumes jumping nearly 44%. Meanwhile, its also seeing solid sales growth for its heated tobacco Iqos system, with volumes rising nearly 9% last quarter. Philip Morris bought back the Iqos license for the U.S. from Altria, and could look to introduce the product on a wider scale here next year. It is currently looking to get the latest version of the product approved by the FDA, while testing an older version in a few select U.S. cities.
One big positive for Philip Morris is that both Zyn and Iqos have considerably better unit economics than traditional cigarettes. Management has said that in the U.S., Zyn's product contribution level is 6 times greater than cigarettes, while the Iqos' product contribution level is least 2 times better.
With strong volumes and better unit economics for its smokeless products, Philip Morris is in a strong position.
e.l.f. Beauty
While its stock had a down year in 2024, e.l.f. Beauty (ELF -1.52%) has been a huge winner the past five years -- the stock is up more than 650% over that stretch as of this writing. The company has taken tremendous market share in the mass cosmetics space in the U.S. the past few years. That could be seen in its 40% year-over-year revenue growth last quarter.
E.l.f. has a strong following among younger consumers. It has successfully used a fast-follower product strategy of replicating popular prestige brand items at much cheaper prices while using social media influencers to market its products. This has led to store shelf gains and better product placements, all of which have fed into its gains.
Meanwhile, the company still has large opportunities in the skincare category, where is has a smaller presence, and in international markets. Thus far, its moves in these areas have been successful.
Trading at a forward price-to-earnings ratio (P/E) of 27.7 times based on estimates for its fiscal 2026 (which ends March 2026) and a price/earnings-to-growth ratio (PEG ratio) of 0.52, e.l.f is a cheap growth stock.
JAKKS Pacific
JAKKS Pacific (JAKK 0.66%) made a big upgrade in its executive suite a few years ago when it hired John L. Kimble as CFO following his stints at Walt Disney and Mattel. Meanwhile, over the past five years, the stock is up about 165% as of this writing.
Kimble has helped turn the toy company around and laid the groundwork for further solid performances. Nonetheless, the stock is one of the cheapest around, trading at a forward P/E of 6.5 and a PEG of under 0.3. Notably, it's also debt free.
A weak slate of kids movies hurt the stock in early 2024, but it could see a nice boost now that Moana 2 and Sonic 3 have landed at the box office. Both franchises have helped JAKKS toy sales in the past, and both had very strong showings in theaters. Sonic 3 was the best performing movie of the franchise, while Moana 2 has grossed over $1 billion globally.
JAKKS has also been focused on making its non-licensed business bigger, with a focus on evergreen content. It also previously signed a deal with Authentic Brands, owner of Roxy, Juicy Couture, Quiksilver, and other brands, to make items such as beach accessories, skateboards, roller skates and other items that it began to roll out in the fall of 2024.
With an improved box office slate, the Authentic Brands deals, and a cheap stock price, JAKKS Pacific in an under-the-radar stock to consider buying.
