The S&P 500 closed 2022 with a total loss of about 18% on the year, its worst annual return since the financial crisis of 2008. Those declines, coupled with stubbornly high inflation, a rising interest-rate environment and uncertainty over the potential for a bigger slowdown in the U.S. economy has many investors seeking out safety. Consumer staples stocks are a traditional safe haven from uncertainty, which has already proven to be more than abundant over the past 12 months. Since being spun off, Philip Morris has grown its market cap to be higher than Altria’s, making it one of the biggest sin stocks in the world. A multinational, member-only big box chain, Costco is the fifth largest retailer in the world, according to the National Retail Foundation.
- 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.
- With a global scale and more than 120 years of operating history, Coke is among the most recognizable brands on the planet and logs consistent sales in any market environment.
- Today, it still owns several snack and beverage brands, including Gatorade, Lay’s, Doritos, Cheetos, Mountain Dew and Quaker Foods.
- Celsius Holdings (CELH, $94.84) might not be the most well-known consumer staples stock on this list, but it is worth a mention because it has an impressive track record of growth in recent years.
- Traffic was up 0.9% year-over-year, down from 3.9% in the same period a year ago.
The consumer staples segment is a relatively defensive segment of the market. It includes food, beverages, and tobacco and producers of non-durable household goods and personal products. Furthermore, it also includes farming, agriculture, and https://bigbostrade.com/ cannabis products. The consumer staples sector has outperformed the S&P 500 in the last three recessionary periods. A consumer staple ETF aims to expose investors to the consumer staples sector without having to pick individual stocks.
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Consumer staples companies may not have the highest earnings growth or year-over-year revenue growth because these stocks tend to be large, mature companies. Historically, the sector has experienced relatively little disruption. But these stocks make up for modest growth with low price volatility, reliable profits, dividends, and defensive positioning. Celsius Holdings (CELH, $94.84) might not be the most well-known consumer staples stock on this list, but it is worth a mention because it has an impressive track record of growth in recent years.
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- Well-known manufacturers in this space include Coca-Cola (KO), Procter & Gamble (PG) and Colgate-Palmolive (CL).
- Consumer staples are the basic goods that people buy to support their everyday lives.
- Learning about consumer staples stocks will help you build a more solid investment strategy and a more robust investment portfolio.
This will give you confidence that they have the experience and expertise to navigate through tough times. When the economy is struggling, people still need to buy basic necessities like food and toilet paper. That’s why consumer staples tend to do well even when the rest of the market is in a slump.
Fastest Growing Consumer Staples Stocks
While people may delay spending on non-essential or discretionary items when times get tough, everybody still needs to eat and bathe. The critically important nature of their products helps to explain why many consumer staple stocks are among the best-performing securities of the last 10 years. They can help keep a portfolio buoyant even in the event of an economic or market decline. Companies in the consumer staples sector tend to have stable earnings and predictable cash flows and are known for paying reliable dividends. With a growing global population and an increasing focus on health and wellness, the demand for consumer staples will likely grow in the coming years.
Because of its exposure to the restaurant industry, Pepsi was more affected by the early stages of the pandemic. However, the company was able to quickly recover, and it posted 9.5% organic revenue growth in 2021. Through the first six months of 2022, it kept the ball rolling by expanding organic revenue growth by 13.3%. Sweets purveyor Tootsie Roll Industries (TR, $46.17) is the company behind the namesake chocolate treats.
While consumer staples are among the safer equities you can buy, there are risks. No company is immune to changing consumer preferences, for example. Consumer staples manufacturers must continue investing in product development and innovation to protect the brand reputations they’ve built. Consumer staples stocks are the companies that produce or sell these goods. Well-known manufacturers in this space include Coca-Cola (KO), Procter & Gamble (PG) and Colgate-Palmolive (CL).
Coca-Cola pays an annual dividend per share of $1.84 for a yield of 2.9%. Over the past 15 years, Coke shareholders have enjoyed annualized total returns of 7.2%. Consumer staples companies have an excellent ability to withstand recessions, increase their dividends, and post consistent, incremental growth. All of those characteristics make them good choices for investors looking for reliable, income-producing stocks. For investors who prefer to take a contrarian approach, Unilever is working on a business turnaround. The negatives here, which include the failure to consummate a high-profile acquisition, have left the shares with a historically high dividend yield of about 4.2%.
The company is scheduled to release fourth quarter fiscal 2023 results on May 24. Colgate’s dividend yields 2.4% and its annualized total returns over the past 15 years is 7.3%. Colgate-Palmolive produces personal care, home care and pet care products under popular brand names like Colgate, Irish Spring, Lady Speed Stick, Ajax and Hill’s Science Diet. PG sells products in 180 countries and produces some $65 billion in net annual sales. PG has also produced annualized total returns of 7.4% over the last 15 years. This company is a classic example of a recession-proof stock, as Americans will do laundry and take showers regardless of the ups and downs in the job market or inflation metrics.
Consumer Staples Stocks, Explained
ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. Large, institutional investment managers with more than $100 million in assets under management are required to disclose their portfolio holdings on a quarterly basis through a regulatory filing called a 13F. As the pandemic has subsided, Walgreens is facing tough comparisons.
The consumer staples sector is an intriguing place to looks for high-quality dividend investment ideas. The consumer staples sector stands up well during times of recessions, implying that the sector presents less risk than many of its counterparts. Having an Excel document containing each dividend-paying consumer staples stocks is very useful. Keep reading this article to learn more about the merits of investing in consumer staples stocks. These are the consumer staples stocks that had the highest total return over the past 12 months. GIS stock has been an under-performer this year, having declined 20% since January.
What’s more, the payout is less than half of SJM earnings per share, so there’s ample headroom for payouts going forward from one of Wall Street’s best consumer staples stocks. Consumers looking for a tobacco fix will cut back many other discretionary items before they give up on Altria products. This will provide stability in sales and profits for one of Wall Street’s best consumer staples stocks, regardless of the macroeconomic environment. The consumer staples sector consists of companies providing basic goods and services.
Procter & Gamble is a consumer goods company that makes everything from personal hygiene products to detergents, cleaners and other household products. The company used to make snacks and beverages under the Pringles brand, before selling that division to Kellogg. Look for companies with a unique product or service that is in demand even when the economy weakens. These companies are more likely to maintain or grow their market share during tough times.
Top Consumer Staples Stocks To Invest In
Click here to instantly download your free spreadsheet of all Consumer Staples Stocks now, along with important investing metrics. Get this delivered to your inbox, and more info about our products and services. Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter. Thomas Hughes and Don Miller analyze Powell’s hawkish comments on rate hikes and inflation risks, shedding light on what lies ahead for investors.
However, its other brands include Blow-Pops, Andes mints, Dubble Bubble gum, Razzles, Cry Baby sour candies, and many others. Since then, KO has grown into a behemoth in the beverage industry and has spurred massive growth in the Atlanta region by investing incredible sums back into the community. Among other achievements, the company pioneered vertical integration by buying out its early bottlers, minting a number of millionaires in the process. Nestle operates in nearly 200 countries, employs over 330,000 people and operates over 400 factories. The company is also one of the biggest shareholders of L’Oreal, another company on our list.
When choosing a consumer staples stock or even a consumer staples index fund (which tracks a market index), there are some factors to consider. This sector often outperforms the broader market during times of economic uncertainty and market volatility. The consumer goods sector is one of the largest sectors of the US stock market, with a market capitalization of over $2 trillion. Many of the major investment companies offer some consumer staples play. Vanguard, for example, offers VDC, a consumer staples ETF, and a Consumer Staples Index mutual fund. Invesco has PBJ, its dynamic food & beverage ETF, along with a more general S&P SmallCap Consumer Staples ETF.
As we can see, Adecoagro is performing better than its sector in the calendar year. Within the past quarter, the Zacks Consensus Estimate for AGRO’s full-year earnings has moved 25.7% higher. This means that analyst sentiment is stronger and the stock’s earnings outlook is improving. On June 27th, 2023, Walgreens reported results for the third quarter of high low indicator mt4 fiscal 2023. Sales grew 9% but earnings-per-share rose only 3% over last year’s quarter, from $0.97 to $1.00, mostly due to high COVID-19 vaccinations and tests in last year’s period. Conagra is a food company with well-known brands like Slim Jim, Healthy Choice, Marie Callender’s, Orville Redenbacher’s, Reddi Whip, Birds Eye, Vlasic, Hunt’s, and PAM.
When it comes to the best consumer staples stocks, it’s hard to top the international powerhouse that is Coca-Cola (KO, $60.12). With a global scale and more than 120 years of operating history, Coke is among the most recognizable brands on the planet and logs consistent sales in any market environment. And one area of the market to find consistency and stability is the consumer staples sector. After all, companies that sell detergent or shampoo or packaged foods will still do a brisk business even if broader spending trends decline.