The consumer staples sector is composed of companies that produce and sell items considered essential for everyday use. Consumer staples products 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 noncyclical and able to maintain stable growth regardless of the state of the economy. Some of the big names in the sector include Procter & Gamble Co. (PG), Coca-Cola Co. (KO), and General Mills Inc. (GIS).
Consumer staples stocks, as represented by the Consumer Staples Select Sector SPDR ETF (XLP), have significantly underperformed the broader market over the past year. XLP has provided investors with a total return of 11.2% over the past 12 months, well below the iShares Russell 1000 ETF’s (IWB) total return of 33.5%. These market performance numbers and all statistics in the tables below are as of Nov. 18, 2021.
Here are the top three consumer staples stocks with the best value, the fastest growth, and the most momentum.
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.
- Bunge Ltd.: Bunge is a global agribusiness and food company. It supplies and transports agricultural commodities, including sugar ethanol, wheat, and corn. The company also processes oilseeds and grains and sells fertilizers. On Nov. 4, Bunge announced a quarterly dividend of $0.525 for common share and a dividend of $1.21875 per share on its 4.875% cumulative convertible perpetual preference shares. The first dividend is payable on March 2, and the second is payable on March 1, 2022.
- Herbalife Nutrition Ltd.: Herbalife Nutrition is a global nutrition company. It offers weight management products and healthy meals and snacks, as well sports and fitness, energy, and other targeted nutritional products. It also sells personal care products. On Nov. 3, the company announced that it had entered the soup category in the U.S. and Puerto Rico with the launch of Instant Soup. The soup includes 15 grams of plant-based protein. The global instant soup market is expected to grow $3.45 billion through 2025.
- Campbell Soup Co.: Campbell Soup makes and sells branded food products including soups and sauces, biscuits, confectionery, and related products. The company sells its products globally.
These are the top consumer staples stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
- Bunge Ltd.: See above for company description.
- Archer-Daniels Midland Co.: Archer-Daniels-Midland processes, distributes, stores, and sells agricultural commodities. The company processes corn, milo, barley, peanuts, oilseeds, and wheat. It also processes products to be used as food or feed ingredients. The company announced on Nov. 19 that it had completed the acquisition of Deerland Probiotics & Enzymes, a provider of dietary supplements using probiotic, prebiotic, and enzyme technology. Global demand for health and wellness products is estimated at over $775 billion. Financial terms of the deal were not disclosed.
- Sysco Corp.: Sysco is a distributor of food and food products to the foodservice industry. The company provides housekeeping supplies, personal care guest amenities, and room accessories to the lodging industry as well. Net earnings climbed by 74.3% year-over-year (YOY) for Sysco’s Q1 FY 2022, ended Oct. 2, 2021. Sales increased nearly 40% on a YOY basis, indicating strength as the economy recovers from the COVID-19 pandemic. The company attributed its results to meaningful market share gains.
These are the consumer staples stocks that had the highest total return over the past 12 months.
- Albertsons Companies Inc.: Albertsons Companies is a grocery store company that operates food and drug retail stores. It offers groceries, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services.
- Coty Inc.: Coty is a maker and distributor of beauty products. The company’s products include color cosmetics, hygiene products, fragrances, sun care products, and skin treatments. Coty products are sold in department stores, retailers, and airport duty-free shops around the world. On Nov. 18, the company announced it had entered a licensing agreement with Orveda, an ultra-premium skincare brand made in France and offering 22 healthy skin glow activators & one home scent. Financial terms were not disclosed.
- Spectrum Brands Holdings Inc.: Spectrum Brands is a holding company that, through subsidiaries, provides consumer batteries, hardware, faucets, household appliances, lawn and garden accessories, residential lock sets, and similar products. The company serves customers around the world.
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