Bob received a bachelor’s degree in Finance from DePaul University and an MBA with a concentration in investments from the University of Notre Dame. The decline in the U.S. smoking rate continues, though it has recently recovered somewhat. As of the date this article was written, the author does not own any of the above stocks. For the major indices on the site, this widget shows the percentage of stocks contained in the index that are above their 20-Day, 50-Day, 100-Day, 150-Day, and 200-Day Moving Averages. Available only with a Barchart Plus or Premier Membership, you can base a Stock Screener off the symbols currently on the page. This lets you add additional filters to further narrow down the list of candidates.
While inflation has eaten away at some consumer staples stocks, analysts are projecting more than 10% revenue expansion this fiscal year and mid-single-digit growth in fiscal 2023. Earnings are also expected to jump 8% to 10% for both fiscal years on top of that. What’s more, Warren Buffett’s holding company is Coca-Cola’s largest shareholder, owning more than 9% of the company. Not only does this provide a great foundation for share prices, but it also creates a strong mandate for dividends as Buffett has always demanded long-term dividend growth from his holdings. 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.
Archer-Daniels-Midland Company (NYSE:ADM)
Food stocks within the consumer staples sector are an excellent example of this. Consumers are likely to buy more food products during recessions as they cut back on dining out to conserve funds during difficult economic times. The Fund seeks to track the performance of a benchmark index that measures the investment return of consumer staples stocks. It seeks to track the performance of the MSCI U.S. Investable Market Consumer Staples Index, an index of stocks of large-, mid-, and small-size U.S. companies within the consumer staples sector. 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.
You are being directed to ZacksTrade, a division of LBMZ Securities 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. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities. As the pandemic has subsided, Walgreens is facing tough comparisons. It lowered its guidance for earnings-per-share from $4.45-$4.65 to $4.00-$4.05.
That makes the competition among suppliers very challenging in an environment where commodity prices are rising. To compete on price consumer staples producers must be able to keep their costs down by adopting new technologies and processes, or they must differentiate by introducing innovative products. Consumer staples are considered to be non-cyclical, meaning that they are always in demand, year-round, no matter how well the economy is—or is not—performing.
Is Invesco S&P 500 Equal Weight Consumer Staples ETF (RHS) a Strong ETF Right Now?
Consumer staple stocks create a “defensive position” in your stock portfolio, which helps to stabilize your entire portfolio during market volatility. 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. Click here to instantly download your free Excel spreadsheet of all 71 consumer staples stocks, along with important investing metrics like price-to-earnings ratios and dividend yields.
Price increases also need to be balanced against the risk of consumers trading down to cheaper alternatives. Consumer staples stocks function in a non-cyclical manner, meaning they offer investors safety during recessionary climates. Since these companies sell goods such as food and cleaning products that consumers rely on regardless of the state of the economy, they tend to generate solid profits even in weak economies. What’s more, premium brands like Kraft have more wiggle room when it comes to raising prices to offset inflationary pressures. Consider that across the first nine months of fiscal 2022, Kraft Heinz increased its product prices by an average of 12.3%, even as overall sales remained flat. That kind of move simply can’t be pulled off by a down-market brand with less loyal customers.
What Are Consumer Staples?
Consumer staples are products people use and repurchase regularly. These are the items that pop up on your shopping list repeatedly—things like paper towels, soap, toothpaste, Forex hedging cigarettes and soda. Because of their narrow focus, sector investments tend to be more volatile than investments that diversify across many sectors and companies.
Today, the firm has expanded to produce a gigantic range of different foods and beverages. 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. You can read more about our editorial guidelines and the investing methodology for the ratings below.
Motley Fool Investing Philosophy
While the brand is largely absent from shelves here in the UK, it is a juggernaut in Asian markets, and is the #1 brand in India. The stocks are listed according to their hedge fund sentiment, which was taken from Insider Monkey’s database of 895 elite hedge funds. Financial advisors would recommend that non-professional investors take a diversified approach. Rather than buying individual stocks, experts suggest choosing a well-diversified consumer discretionary index fund or exchange-traded fund (ETF). Use the fund screener tools available on your brokerage platform to find the best options. When buying individual stocks, it’s imperative to do due diligence and research the consumer discretionary stocks you’re interested in.
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. 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.
The consumer staples sector is home to some of the most well-known dividend growth stocks in the world. In fact, the consumer staples sector has the most Dividend Aristocrats of any individual market sector. To help you find the best consumer staples stocks, Forbes Advisor has profiled the 10 largest companies in this sector by market capitalization. They include daily essentials such as food and beverages, personal care products, household and home care products such as paper goods, and alcohol, tobacco, and cosmetics.
The company went broke during World War I as a result of sugar rationing, but it was later purchased—along with its famous cola recipe—by a holding company. WMT was founded in Bentonville, Ark., by Sam Walton, who was a pioneer in value retail. While the company is still headquartered in Arkansas, it now operates everywhere in the U.S. and in 24 countries. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Below are seven top consumer staples stocks analysts like for 2023, ordered from largest market cap to smallest. For transparency’s sake, note I hold two of these picks in my own portfolio, Procter & Gamble and Coca-cola. Fortunately, the news didn’t immediately spook the investment community. In the first few days following the GDP report, the S&P 500 and the Wilshire 5000 both rose before moderating slightly.
- We see continued comparable sales growth as driving results, along with sizable margin expansion from low levels in 2022 and 2023, and a tailwind from the buyback.
- Accelerated sales growth, thanks largely to the company’s digital expansion, has fueled its earnings growth and will continue to do so.
- Economic growth and decline are typically led by consumer spending, which is cyclical.
- Vanguard, for example, offers VDC, a consumer staples ETF, and a Consumer Staples Index mutual fund.
- That means it’s hard to imagine any economic environment where consumers drop Kellogg’s offerings from their shopping carts.
The Consumer Staples sector has a total of 239 stocks, with a combined market cap of $3,793.74 billion, total revenue of $2,857.45 billion and a weighted average PE ratio of 23.98. As it falls, picking up shares becomes an increasingly good idea. This is to be expected since the average includes data from the previous, lower priced days. As long as prices remain above the average there is strength in the market.
One of the primary reasons is that consumer staples are considered essential products that people need regardless of economic conditions. Consumer staple companies are less likely to be affected by economic downturns than companies that produce nonessential products. As a result, these companies may provide more stable and reliable earnings even during challenging economic times.
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. Enter your email address below to receive the latest headlines and analysts’ recommendations https://investmentsanalysis.info/ for your stocks with our free daily email newsletter. Thomas Hughes and Don Miller analyze Powell’s hawkish comments on rate hikes and inflation risks, shedding light on what lies ahead for investors.