Many trading systems utilize moving averages as independent variables and market analysts frequently use moving averages to confirm technical breakouts. Since being spun off, Philip Morris has grown its market cap to be Umarkets Broker review 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.
Shares have increased 50.84% to $154.51 since then, and the company is a #3 (Hold) on the Zacks Rank. Investors also need to look at what a company will earn down the road. Click here to instantly download your free spreadsheet of all Consumer Staples Stocks now, along with important investing metrics. Prior to joining Sure Dividend, Bob was an independent equity analyst. His articles have been published on major financial websites such as The Motley Fool, Seeking Alpha, Business Insider and more.
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Further, consumer staples are important for portfolio diversification. Also, because these stocks tend to perform in a way counter to the consumer discretionary sector in market recessions, they can help bring balance to a portfolio. In 2023, SJM joined the list of Dividend Aristocrats, stocks that have provided at least 25 consecutive years of growth in their distributions. What’s more, the payout is less than https://investmentsanalysis.info/ 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. Consumer staples are products people need to buy regardless of economic conditions, making the sector relatively stable. Additionally, companies producing these products often have established brand names and loyal customer bases, protecting against the competition.
The company operates 800 stores worldwide, though stores exist in fewer than 20 countries and almost 70% of its stores are located in the U.S. PEP has owned a number of other brands, many of which it sold off in the 1990s, such as restaurant chains Pizza Hut, Taco Bell and KFC, plus the U.S. rights to Russian distiller Stolichnaya. Today, it still owns several snack and beverage brands, including Gatorade, Lay’s, Doritos, Cheetos, Mountain Dew and Quaker Foods. Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns.
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Say you go heavy into consumer staple stocks because of an expected recession. If that recession doesn’t materialize, you could miss out on larger gains available in other sectors. More importantly, the consumer staples sector has outperformed the S&P 500 during the last three recessionary periods—or periods of negative growth in the gross domestic product (GDP).
Moreover, growing online sales dilutes the power of well-known consumer staples brands. 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 company’s recent growth has been driven in large part by its success in the Chinese market, where its skin care products have performed particularly well. The cosmetics subsector tends to be more volatile than other parts of the consumer staples industry.
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That’s why consumer staples tend to do well even when the rest of the market is in a slump. Eggs, milk, soda, bath soap, laundry detergent, socks, underwear, pet food, diapers, toilet paper, cigarettes, ibuprofen and cough medicine are all consumer staples products. E.l.f produces primarily value-priced, clean, cruelty-free beauty products.
- These companies often have established brand names, a history of stable earnings and dividends, and a relatively low level of volatility compared to other sectors.
- Well-known manufacturers in this space include Coca-Cola (KO), Procter & Gamble (PG) and Colgate-Palmolive (CL).
- To help you find the best consumer staples stocks, Forbes Advisor has profiled the 10 largest companies in this sector by market capitalization.
- Price elasticity is an economic concept that describes the change in consumer quantity demand as prices change.
- Consumer staples are products people use and repurchase regularly.
Nu Skin’s anti-aging and skin-related products include peels, masks, scrubs; moisturizers; body care, hair care, men’s care, oral care, sun protection, and cosmetics. Moreover, the company sells its product directly to consumers through its own sales channel and has a sizable market overseas. Balchem Corporation is a publicly traded specialty chemicals firm. Human nutrition and health, animal nutrition and health, specialty products, and industrial products are its four business segments through which it conducts its operations. Agriculture, the food and beverage industry, pharmaceuticals, and other sectors all use the company’s products. Management noted it is making progress in its operational improvement plans, and that the current economic environment for consumers is tough.
Why Invest In Consumer Staples?
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, 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.
This stable consistency makes consumer staples stocks an attractive option for investors who are looking for reliable returns over the long term. As a result, consumer staples stocks are considered defensive investments that can help balance a portfolio and provide a source of stability and income. 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%. 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.
Why Invest in Consumer Staples Companies?
The service also includes the Focus List, which is a long-term portfolio of top stocks that boast a winning, market-beating combination of growth and momentum qualities. On May 3rd, 2023, Nu Skin announced Q results, reporting quarterly earnings of $0.37, beating market estimates by $0.04. In addition, the company reported revenues of $481.46 million for the quarter, down 20.4% year-over-year. Despite the persisting macro problems, Q1’s performance aligned with management’s forecasts and anticipate gradual improvements throughout the year. This tool becomes even more potent when combined with a solid, fundamental knowledge of how to manipulate data with Microsoft Excel. Quantitative investing screeners allow investors to remove many of the cognitive biases that impair long-term investing returns.
When people have a little extra cash, they indulge in offerings from these companies. PepsiCo and Coca-Cola show up in the next two slots of each top-10 list, with Estee Lauder turning up lower down on two of the three lists. Consumer Staples ETF doesn’t include retailers, but the other two ETFs have giants such as Walmart (WMT 0.37%) and Costco (COST -0.01%) making the cut. Consumer staples are noncyclical, meaning they offer investors safety during recessionary climates.
The “best” stock for you will vary depending on whether your top priority is downside protection, dividend income or long-term value creation. As stocks rise in price, dividend yields will fall if the size of the dividend does not increase as well. Conversely, if stocks fall in price and if the dividend payout does not change, then the dividend yield increases. The consumer staples sector is an intriguing place to looks for high-quality dividend investment ideas.