In fact, they are well represented among the Dividend Aristocrats—firms that have increased their dividends annually for at least 25 consecutive years. The consumer staples sector has outperformed all but one sector since 1962. According to the S&P Dow Jones Indices, for most of the 10 years ending April 26, 2021, the consumer staples sector returned 8.20% annually. Compare this to the 11.86% return of the S&P 500 over the same period. 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.
- Confirming the business momentum, LW recently raised its guidance for the full fiscal year 2024.
- Many pay dividends, too, which you can think of as a cash advance on growth.
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- Meanwhile, valuations in the sector have looked compelling versus the broader market and versus sector history.
- 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.
- Consumer staples stocks can be a good option for investors seeking steady growth, solid dividends, and low volatility.
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This is because investors sometimes pay more for a company with premium earnings, as can be seen from some of the most expensive stocks on the market today. They tend to be less volatile than other sectors, providing a measure of stability and downside protection in a portfolio. They also offer the potential for income and capital appreciation, as well as the potential to hedge inflation.
Best Consumer Staples Stocks In 2024
Given the company’s impressive history, highlighted by its status as a Dividend King, it seems very likely that it will muddle through all of this. And assuming that happens, Wall Street will likely reward the stock with a higher valuation. Hormel isn’t the only company facing these types of issues, but it is probably the only one facing them all at the same time.
#14 – Constellation Brands
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Investors can buy consumer discretionary stocks using a standard taxable brokerage account or a tax-advantaged individual retirement account (IRA). If you’re new to investing, or you’d like to change up your current investing accounts, be sure to check out Forbes Advisor’s list of the best online brokerages and the best investment apps. Many of the major investment companies offer some consumer staples play.
PepsiCo, Inc. Announces Retirement of North America Beverages CEO; Appoints Ram Krishnan CEO of PepsiCo Beverages North America
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. If you’re seeking a buy-and-hold consumer staples stock with staying power, KHC is worth a closer look. What’s more, Warren Buffett’s holding company is Coca-Cola’s largest shareholder, owning more than 9% of the company.
This means that the industry has gained 3.4% over the past year. Companies that make home maintenance products like detergents and dishwashing soap fall into this category. In 2018, it acquired SodaStream, which gave the company a leading position in countertop soda-making. Auto Restock is limited to items displaying the Auto Restock message.
Additionally, the consumer staples sector has historically experienced lower price volatility compared to other sectors, which are more correlated to business cycles. The sector’s relatively steady sales and profits also provide a source of stability during volatile markets. They all belong to a class of products known as consumer staples.
Mondelez is a Zacks Rank #3 (Hold) stock, and is getting ready to report earnings on April 25, 2024. MDLZ’s Most Accurate Estimate sits at $0.89 a share 84 days from its next earnings release. Now that we understand what the ESP is and how beneficial it can be, let’s dive into a stock that currently fits the bill. Coca-Cola (KO) earns a Zacks Rank #2 right now and its Most Accurate Estimate sits at $0.49 a share, just 12 days from its upcoming earnings release on February 13, 2024.
Flowers Foods (FLO)
The company is riding 18 years of consecutive dividend increases, and has paid dividends in some form since 1925. That provides a solid yield on top of tremendously consistent share performance, https://traderoom.info/ which is why K is on this list of the best consumer staples stocks. Consumers looking for a tobacco fix will cut back many other discretionary items before they give up on Altria products.
Lingering tough economic conditions may moderate as the year progresses. But there’s also the potential for headwinds related to Ozempic and other weight-loss drugs. The Consumer Staples sector consists of companies that provide goods and services that people use on a daily basis, like food, clothing, or other personal products. 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. 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. For those unfamiliar, Celsius sells energy drinks and “liquid supplements” under the Celsius name.
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That creates a nice diversification opportunity, as investors get exposure to emerging markets and some insulation from a U.S. downturn. In the third quarter, MDLZ reported 16.3% revenue growth to $9 million. Adjusted diluted EPS grew 16.7% on a constant currency basis to $0.82. There’s more upside as Costco expands its store footprint domestically and abroad. The membership chain will open about 25 new stores annually over the next several years. That expansion should provide diversified revenue growth going forward.
As such, the companies that make these items are said to maintain reliable, steady growth regardless of the economy. When buying individual stocks, it’s imperative to do due diligence and research github vs gitlab the consumer discretionary stocks you’re interested in. Individual stock picking can be a very risky way of investing, and that means you should pursue this strategy with your eyes wide open.
That’s why consumer staples tend to do well even when the rest of the market is in a slump. Another benefit of these companies is that downturns help improve the company’s valuation. If you’re worried about big-picture economic trends, then consider the fact that grocery shoppers will continue to load up on these staples even if they cut back on travel or eating out. 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.