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The consumer staples sector is comprised of companies that produce and sell items considered essential for everyday use. These include household goods, food, beverages, hygiene products, and other items that individuals are either unwilling or unable to eliminate from their budgets even in times of financial trouble. As a result, these companies are viewed as non-cyclical and able to maintain stable growth regardless of the state of the economy. The big names in the sector include Colgate-Palmolive Co. (CL), PepsiCo Inc. (PEP), and Philip Morris International Inc. (PM). Consumer staples stocks, as represented by the Consumer Staples Select Sector SPDR ETF (XLP), have outperformed the broader market, providing investors with a total return of 22.0% compared to the S&P 500’s total return of 18.4% over the past 12 months. These market performance numbers and the statistics in the tables below are as of February 24.
Here are the top 3 consumer staples stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Consumer Staples Stocks
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 you’re paying less for each dollar of profit generated.
- Tyson Foods Inc.: Tyson Foods produces, distributes, and markets chicken, beef, pork, and prepared foods. Some of its brands include Hillshire Farm, Sara Lee, and State Fair. Dean Banks, a former member of the leadership team at X, an Alphabet Inc. (GOOGL) company, was named President effective December 20, 2019.
- The Kroger Co.: Kroger operates supermarkets, drug stores, multi-department stores, jewellery stores, and convenience stores. The company also engages in the manufacture and processing of some of the food it sells in its supermarkets.
- General Mills Inc.: General Mills manufactures and markets branded consumer foods and pet food products sold through retail stores. The company also is a supplier of branded and unbranded food products to the food service and commercial baking industries.
Fastest Growing Consumer Staples Stocks
These are the consumer staples stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
- Newell Brands Inc.: Newell Brands is a retailer of consumer products, including housewares, home furnishings, office supplies, tools and hardware, and hair accessories. Some of the company’s brands include Sharpie, Paper Mate, Elmer’s, Coleman, and Rubbermaid.
- Coca-Cola Co.: Coca-Cola is a non-alcoholic beverage company engaged in the manufacture and sale of nonalcoholic beverages, including soft drinks, water, enhanced water & sports drinks, juice, dairy and plant-based beverages, tea & coffee, and energy drinks. The company announced in December that two senior vice presidents, both members of the company’s leadership team, will be retiring in 2020.
- Molson Coors Beverage Co.: Molson Coors is a holding company that produces and sells beer. Some of its brands include Coors Light, Miller Lite, and Molson Canadian. Molson Coors reported YOY revenue growth of 2.8% and YOY EPS growth of 114.3% for for Q4 2019.
Consumer Staples Stocks with the Most Momentum
These are the consumer staples stocks that had the highest total return over the last 12 months.
|Consumer Staples Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Target Corp. (TGT)||117.01||59.3||67.1|
|Costco Wholesale Corp. (COST)||321.95||142.2||51.0|
|The Hershey Co. (HSY)||160.32||33.6||47.2|
|S&P 500 (SPY)||N/A||N/A||18.4|
|Consumer Staples Select Sector SPDR ETF (XLP)||N/A||N/A||22.0|
- Target Corp.: Target owns and operates general merchandise and food discount stores as well as a fully integrated online business.
- Costco Wholesale Corp.: Costco operates membership warehouses in multiple countries. The company’s merchandise includes food, beverages, cleaning supplies, appliances, health and beauty products, hardware, electronics, and pharmaceutical products.
- The Hershey Co.: Hershey engages in the manufacture of chocolate and sugar confectionery. The company’s primary products include chocolate and non-chocolate confectionery products, gum and mint refreshment products, baking ingredients, and snack items, such as spreads, meat snacks, bars, and snack bites. Hershey announced in December a number of promotions to the company’s executive management team.
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