what are consumer staples stocks

While an inflationary environment has been hard on some companies, Kellogg has been able to defend its margins through a series of price increases that consumers have shouldered without cutting back. As proof, management boosted its full-year earnings and revenue expectations after a stronger-than-expected Q3 report in November. Thanks in part to this strong performance, Kellogg has risen about 6% in the last year, while the S&P 500 has declined around 9% in the same period.

Major retailers of consumer staples are Walmart (WMT), Costco (COST) and Kroger (KG). And, with iconic global brands such as Dove, Ben & Jerry’s, Knorr, and Hellmann’s, the company has a strong brand portfolio to lean on as it works to improve its growth profile. Long-term investors can happily collect the generous yield while waiting for Unilever’s business performance to improve. The cosmetics subsector tends to be more volatile than other parts of the consumer staples industry.

what are consumer staples stocks

We will teach you how and why consumer staples stocks are essential. Plus, we will explain how to use these stocks to create a defensive position in your portfolio that will help you minimize the impacts caused by stock loss or economic downturn. Learning about consumer staples stocks will help you build a more solid investment strategy and a more robust investment portfolio. If you’re looking to invest in the stock market, you may have heard the term « consumer staples stocks. » The consumer staples sector is home to some of the most well-known dividend growth stocks in the world. Below are seven top consumer staples stocks analysts like for 2023, ordered from largest market cap to smallest.

In contrast, Barfresh Food Group Inc. falls under the Beverages – Soft drinks industry. You are being directed to ZacksTrade, a division of LBMZ Securities forex spread meaning and licensed broker-dealer. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security.

Top Consumer Staples Stocks To Invest In

Consumer staples stocks can be a good option for investors seeking steady growth, solid dividends, and low volatility. During recent earnings calls, the company noted that decreases in its sales have coincided with an average price increase on its consumer staple products of 10% year-over-year. However, the company has continued to rack up prices on name brand items, that also include Gillette razor blades and Bounty paper towels. Price increases led to Procter & Gamble reporting financial results recently that beat Wall Street forecasts across the board, giving PG stock a boost in the process.

In fact, MO stock lost a mere 2% last year, marking it as one of the better-performing stocks in the S&P 500. On top of that, Altria is one of the best dividend growth stocks, having logged more than 50 consecutive years of dividend increases to boast a sustainable and generous payout. Unilever is a consumer goods multinational headquartered in London. The company is the largest producer of soap in the world, but it also makes countless other goods, including Lipton teas and Ben & Jerry’s ice creams. Unilever stands out for its poor environmental record, though it has recently announced plans to drastically reduce its footprint before the end of the decade.

What’s more, KHC stock offers a yield that’s more than twice that of the S&P 500. As for its performance on the price chart, Kraft Heinz is up more than 9% in the last 12 months, even as most stocks in the S&P 500 have lost ground in the same period. Smucker reached an agreement with Post Holdings (POST) to sell off its pet-food brands, including Kibbles ‘n Bits, for $1.2 billion. This will help the company keep its debt load low and ensure finances are strong enough to support shareholder value for many years to come. Discount retailer Dollar General (DG, $227.82) is a nationwide chain that offers everything from cleaning products to packaged food to over-the-counter medicines to holiday items.

For those unfamiliar, Celsius sells energy drinks and « liquid supplements » under the Celsius name. Its edgy flavors include apple jack’d, inferno punch, and strawberry dragon fruit. Certain segments of the consumer discretionary sector, especially retailers, are ripe targets for disruption by new e-commerce competitors. Moreover, growing online sales dilutes the power of well-known consumer staples brands.

Top Consumer Staples Stock List

When you talk about consumer staple stocks, you refer to the consumer staples sector, which groups all the consumer staple stocks. The prices of consumer staples stocks can rise even during an economic downturn as they are regarded by some as safe investments for people to park their cash into. Many companies in the consumer staples sector also offer higher dividend yields than other sectors, with an average yield of around 2%.

Sales are forecast to rise in the mid-single digits this fiscal year and next, showing that Coke is a powerful consumer stock that knows how to connect with its customers. The Boca Raton-based company has been on a tear since 2020, with shares exploding from under $5 a share to almost $100 a share at present. Estimates are for CELH revenue to double in its current fiscal year, and then grow another 50% in fiscal 2023, as well.

Although this issue often takes center stage during inflationary periods (like today), it is always an important component of growth. Simple price increases, changing packaging sizes, and production innovation are all vital tactics that get used. In inflationary https://bigbostrade.com/ periods, costs for ingredients, labor, and distribution often rise faster than a company’s ability to pass on price changes. There can be a period of margin weakness that will likely be temporary for the best-managed consumer staples companies.

These are the consumer staples stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated. One important factor to monitor when looking at a consumer staples company is its ability to pass on cost increases.

For the full year 2023, the company has projected revenue of $2.03 billion to $2.18 billion, which takes into account an anticipated 1% to 2% unfavorable impact from foreign currency. In terms of earnings per share, the company is expecting a range of $2.27 to $2.67. The bellwether for consumer products companies warned of profit pressures due to high commodity prices, as well as inflation-weary shoppers cutting back.

Consumer staples stocks tend to pay solid dividends and keep paying them over the long term. In fact, they are well represented among the Dividend Aristocrats—firms that have increased their dividends annually for at least 25 consecutive years. Our editors are committed to bringing you unbiased ratings and information. We use data-driven methodologies to evaluate financial products and companies, so all are measured equally.

Kraft Heinz (KHC)

The consumer staples sector refers to the list of consumer staples stocks, including companies that produce or sell products that consumers regularly purchase, regardless of economic conditions. This sector includes companies that manufacture and sell items considered daily or weekly consumer necessities. As you might have already guessed, the consumer staples stocks list is relatively lengthy, so to help, we have divided it into categories to make it easier to understand. The consumer staples sector also often lures investors with its components’ rich dividend yields, which tend to be larger than those generated in other sectors. Because of their slow and steady nature, consumer staples stocks can also not only continue to pay dividends through recessionary periods but often continue to increase their payouts. According to « Dividend.com, » the annual dividend rate increased 8% over the 20 years ended in 2015.

Clearly, the performance of the consumer staples sector beat these other industries by a wide margin despite being negative itself. In fact, consumer staples was the single best performing sector during calendar year 2008. There is also a wide body of evidence that suggests that the consumer staples sector outperforms over long periods of time. Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day.

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Conversely, if stocks fall in price and if the dividend payout does not change, then the dividend yield increases. However, spending on goods produced and sold by the consumer staples sector tends to be far less cyclical due to the lessened price elasticity of demand. Price elasticity is an economic concept that describes the change in consumer quantity demand as prices change. The demand for consumer staples goods remains fairly constant regardless of the state of the economy or the cost of the product. Consumer staples are items viewed as essential by people in their everyday lives.

These goods are those products that people are unable—or unwilling—to cut out of their budgets regardless of their financial situation. With the central bank looking unlikely to pivot anytime soon, fears are mounting on Wall Street that a recession could be in the cards for next year. The sector’s combination of high returns and low risk make it a uniquely appealing sector for conservative total return investors. Several key advantages of consumer staples stocks include stability, growing dividends, and lower volatility. PG is the undisputed leader in consumer staples, with a market capitalization of nearly $370 billion.

Consumer Staples Sector Stocks

PG is one of the biggest employers in Cincinnati, Ohio, where it has its headquarters. With an annual marketing budget of $11.5 billion, it also holds the title of the world’s largest advertiser. Walmart is the world’s largest retailer, the world’s largest company by revenue and the largest employer, with over 2.2 million employees as of 2020. Worldwide, Walmart gets more than 260 million customer visits each year. For those who prefer to avoid crowds, there’s the members-only Sam’s Club and Walmart+ subscription delivery options as well. Recent stocks from this report have soared up to +178.7% in 3 months – this month’s picks could be even better.

The S&P 500 tracks companies that offer yields as high as 5%, but these are diversified across a wide range of industries that can contract sharply during a recession and are therefore riskier. Buoyed by the persistent demand of their products, consumer staples companies generate consistent revenues, even in recessionary periods. As a result, consumer staples stocks decline far less during bear markets than stocks in other sectors. With some products, such as food, alcohol, and tobacco, demand sometimes actually increases during economic downturns.