The consumer staples sector is made up of companies that produce and sell items considered essential for everyday use. Basic consumption products include household items, food, beverages, hygiene products, and other items that individuals are unwilling or unable to eliminate from their budgets, even in times of financial hardship. Therefore, these companies are considered non-cyclical and capable of maintaining stable growth regardless of the state of the economy. Some of the big names in the industry include The Procter & Gamble Co., The Coca-Cola Co. and General Mills Inc.
Stocks of basic consumer goods, represented by a exchange-traded fund (ETF)—SPDR Consumer Staples Select Sector ETF (XLP) — have outperformed the broader market over the past year. XLP provided investors with a full return -7.5% over the last 12 months, above the Russell 1000 total return of -7.0%. These market performance figures and all statistics in the tables below are as of August 5, 2022.
Here are the top three consumer staples stocks with the best value, fastest growth and most momentum.
These are the core consumer goods stocks with the lowest 12 months follow-up price/earnings ratio (P/E). Since profits can be returned to shareholders in the form of dividends and redemptionsa low P/E ratio indicates that you pay less for every dollar of profit generated.
|Best Value Consumer Staples Stocks|
|Price ($)||Market Cap (Market Cap) ($B)||12 month price/earnings ratio|
|Tyson Foods Inc. (TSN)||87.45||31.6||7.8|
|Bunge Ltd (BG)||96.75||14.7||8.3|
|Albertsons Companies Inc. (AIT)||27.05||14.4||9.4|
- Tyson Foods Inc. : Tyson Foods produces a line of frozen and refrigerated beef, pork, chicken and other food products. The company’s activities include breeding animals, contract farmers, animal feed production, processing, marketing and transportation. On May 23, Tyson announced a quarterly dividend of $0.46 per Class A common share and $0.414 per Class B common share. Dividends are payable September 15 to shareholders beginning September 1, 2022.
- bunge ltd. : Bunge is a global food company. It supplies and transports agricultural products, including sugar, ethanol, wheat and corn. The company also processes oilseeds and cereals.
- Albertsons Companies Inc.: Albertsons Cos., Inc. operates food and drug retail stores. It offers groceries, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services.
These are the top consumer staples stocks ranked by a growth model that rates companies based on a 50/50 weighting of their most recent quarterly results. year on year (YOY) percentage revenue growth and last quarter year-over-year earnings per share (EPS) growth. Sales and profits are critical factors in the success of a business. Therefore, classifying companies according to a single measure of growth makes a classification sensitive to accounting anomalies in this trimester (such as changes in tax laws or restructuring costs) that may render one figure or another unrepresentative of the business as a whole. Companies with quarterly EPS or revenue growth greater than 2,500% were excluded as outliers.
|Fastest Growing Consumer Staples Stocks|
|Price ($)||Market capitalization ($B)||EPS growth (%)||Revenue increase (%)|
|Sysco Corp. (RAISON)||86.25||43.9||247.1||42.9|
|The Kroger Company (KR)||47.25||33.8||400.0||8.0|
|Darling Ingredients Inc. (BUT)||72.40||11.6||26.6||30.5|
- Sysco Corp. : Sysco sells and distributes food products to restaurants, healthcare and educational facilities, lodging establishments and other customers. It also provides equipment and supplies to the restaurant and hospitality industries. Sysco released its financial results for the third quarter of fiscal 2022, which ended April 2, on May 10. Net income more than tripled on strong year-over-year (YOY) revenue growth. Higher volumes were a key driver of results. Sysco released its financial results for the fourth quarter of 2022, which ended July 2, on August 9. Earnings per share (EPS) rose sharply compared to the same period last year.
- The Kroger Company: The Kroger Co. operates a chain of grocery stores across the United States. It also operates supermarkets, digital shopping platforms, price impact warehouse stores and multi-department stores. It sells groceries, clothing, and other general merchandise. The company also operates food production facilities. On June 16, Kroger released its results for the first quarter of fiscal 2022 ended May 21. Net income attributable to the company more than quadrupled on the back of modest year-over-year revenue improvement. The company cited continued food-at-home trends as a factor impacting earnings growth.
- Darling Inc. Ingredients: Darling Ingredients, Inc. engages in the development and production of natural ingredients from edible and non-edible bionutrients. It operates through the following segments: Food Ingredients, Food Ingredients and Fuel Ingredients.
Consumer staples stocks have had the strongest total return over the past 12 months.
|Consumer staples stocks with the most momentum|
|Price ($)||Market capitalization ($B)||Total return over 12 months (%)|
|Dollar Tree Inc. (LTRD)||164.97||37.1||66.7|
|Pilgrims Pride Corporation (CPC)||30.13||7.2||43.4|
|Archer-Daniels Midland Co (ADM)||82.76||46.4||43.8|
|Russell 1000 Index||N / A||N / A||-7.0|
|Consumer Staples Select Sector SPDR ETF (XLP)||N / A||N / A||-7.5|
- Dollar Tree Inc.: Dollar Tree is an operator of discount variety stores under the Dollar Tree and Family Dollar names. These stores sell various consumable merchandise as well as diapers, batteries, pet food and supplies, hardware, and similar products. On May 12, Dollar Tree announced the appointment of John Flanigan and Larry Gatta as Director of Supply Chain and Director of Merchandising, respectively, for Family Dollar. Both previously held executive positions at Dollar General Corp. (CEO).
- Pilgrim’s Pride Corporation: Pilgrim’s Pride operates protein processing plants and food preparation facilities in the United States, Mexico, United Kingdom, Ireland and Continental Europe. It distributes its products through retailers and foodservice distributors.
- Archer-Daniels-Midland Co.: See above for company description.
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