Driven by a quest for consistency in this volatile stock market and iffy economy, investors have been drawn to stable companies that boast a track record of steady profit gains.
AutoZone (AZO), a retailer and distributor of automotive replacement parts and accessories, hits the mark for many investors, analysts say. The company has enjoyed double-digit profit gains in all but one of the past 19 quarters and has consistently delivered sales growth — with the exception of one quarter — over that time frame.
On top of that, AutoZone’s stock climbed 19.7% last year, easily outpacing the broader market.
“AutoZone has been putting up pretty decent top-line growth in an environment where we’re seeing mixed data points pertaining to the health of the consumer,” Northcoast Research analyst Nicholas Mitchell told IBD. “So investors are willing to pay a little bit more of a premium to get the consistency in top-line (growth) and earnings-per-share growth.”