Consumer staples is a sector investors can rely on.
In good times, consumer staples stocks tend to get overlooked. That’s because it’s hard to get excited about a company selling packaged food or drinks when there are other high-flying names in fast-growing industries like biotechnology or cloud computing making headlines. However, when things get rocky — as they have in 2022 — the consumer staples sector tends to shine. And thanks to a rotation from growth investments into more stable and value-oriented ones, that’s exactly what we’re seeing right now. The following seven consumer stocks are all worth a look for this reason, as they boast stable operations that can weather whatever storms we continue to see on Wall Street for the rest of this year.
Coca-Cola Co. (KO)
The iconic Coca-Cola is about as stable a consumer stock as you’ll find, with a global scale and more than 120 years of operating history. And while sugary drinks may be on the outs amid health concerns, it’s important to understand that Coke is still very much in demand even if it’s not seeing big growth — and besides, the company also offers a wide array of other brands including Vitaminwater, Minute Maid juices, Fuze teas, Powerade energy drinks and more. Shares of this consumer mainstay are up slightly in 2022 through June 7 even as the rest of Wall Street has stumbled. And as further peace of mind, in 2022, the company approved its 60th consecutive annual dividend increase to reaffirm its commitment to driving shareholder value.
Costco Wholesale Corp. (COST)
A stalwart of the retail space, Costco is the poster child for the kind of consumer-focused merchant that can survive in the age of e-commerce. It has one of the most loyal customer bases in the U.S., with high rates of satisfaction and a cult-like following of its Kirkland store brand, and it offers goods in bulk and on the cheap in a way that delivery services find tough to compete with. COST ended its fiscal 2021 in September with net sales growth of almost 18%. And looking forward, fiscal 2022 is expected to bring an additional 10% increase in its top line going forward. That’s the kind of trend you really want to see in any environment, but things look even better when you consider inflationary trends causing consumers to cut back their spending in other places right now.
Diageo PLC (DEO)
If you want a consumer stock that will perform in any market environment, consider global spirits and liquor powerhouse Diageo. Though based in London, DEO is a $106 billion company that produces names you’ll surely recognize including Johnnie Walker whisky, Smirnoff vodka, Captain Morgan rum and Tanqueray gin. A “sin stock” like Diageo may not resonate with many people because of its product category, but without moralizing over the risks of alcohol consumption it’s important to acknowledge that many folks around the world are loyal customers — and will keep imbibing in both good times and bad for the global economy.
Freshpet Inc. (FRPT)
A consumer stock with a decidedly more wholesome angle, Freshpet is a company that is dedicated to helping pet owners provide quality care and feeding for the furry members of their extended family. The financials of FRPT are pretty warm and fuzzy, too. The American Pet Products Association estimated that almost $127 billion was spent on pets last year — and that number is up significantly from $97 billion back in 2019. With projected revenue growth of 30% this year and another 30% in fiscal 2023, this is one of the rare consumer stocks that is seeing reliable growth trends right now.
Kraft Heinz Co. (KHC)
Recently highlighted as one of the best dividend stocks to buy and hold forever, consumer products giant Kraft Heinz has a lot going for it right now — and plenty of reasons to stick with this stock no matter what happens on Wall Street. Its powerful brands include Heinz ketchup and Kraft macaroni and cheese that will see strong sales in any environment. Case in point: Shares have ticked up slightly this year even as the rest of the stock market has stumbled. Throw in a reliable dividend that’s at more than 4% right now and investors have good reason to eat up KHC.
Pilgrim’s Pride Corp. (PPC)
The roughly $8 billion meatpacker Pilgrim’s Pride offers chicken, pork, deli counter meats and frozen foods to grocery stores around the world. And while commodity price inflation is putting a pinch on the margins of some companies, PPC is benefiting from the fact that its operations are at the front of the food chain. As meat prices rise, so has this consumer stock. Shares are up an impressive 14% so far this year, and show no signs of slowing down even as the rest of Wall Street looks to be stuck in the summer doldrums right now.
Post Holdings Inc. (POST)
Post is the consumer stock behind some of the biggest brands in the cereal aisle, including Fruity Pebbles, Golden Crisp and Honeycomb. But the company also offers private-label cereal products to third parties as well as offering food service sales and ingredients to other packaged foods companies. Founded in 1895, this entrenched company is incredibly stable thanks to its product portfolio as well as the reliable nature of its business. But it’s not just a sleepy play that’s moving sideways — POST stock is actually up about 12% year to date in 2022 to prove there is still potential growth here for investors, too.
7 best consumer staples stocks to buy now:
— Coca-Cola Co. (KO)
— Costco Wholesale Corp. (COST)
— Diageo PLC (DEO)
— Freshpet Inc. (FRPT)
— Kraft Heinz Co. (KHC)
— Pilgrim’s Pride Corp. (PPC)
— Post Holdings Inc. (POST)
More from U.S. News
Update 06/08/22: This story was published at an earlier date and has been updated with new information.