11X Stock Market Accelerator Summit

Eric Fry reveals how an A.I.-based secret could make you up to 11 times RICHER on the same stocks you’re investing in now… without using options, leverage, or anything risky.

Wed, September 27 at 8:00PM ET

10 Consumer Staples Stocks to Buy and Hold in the Search for Safety


consumer staples stocks - 10 Consumer Staples Stocks to Buy and Hold in the Search for Safety

Source: New Africa / Shutterstock

  • Colgate-Palmolive (CL): Specializing in personal care products, CL is an essential among consumer staples stocks.
  • Procter & Gamble (PG): A household goods giant, PG is an easy choice for safety and stability.
  • Costco (COST): Commanding a wealthy shopper base, COST is relatively insulated from downswings.
  • Casey’s General Stores (CASY): Millennial migration patterns could make CASY an interesting idea.
  • Home Depot (HD): Under a discount, HD could eventually rise higher from a possible DIY shift.
  • Sysco (SYY): The food-distribution industry is likely to rise higher due to the normalization effect.
  • Freshpet (FRPT): With so many millennial pet parents, FRPT is one to watch among consumer staples stocks.
  • Unilever (UL): Featuring a broad range of products including beauty care, UL is ideally positioned.
  • Philip Morris (PM): Smoking might see a comeback if economic concerns become a reality.
  • Anheuser Busch (BUD): Imbibing could also rise if underlying circumstances turn negative.

You’ll want to have some exposure to consumer staples stocks if underlying economic circumstances indeed worsen.

For several weeks, high-level sources have warned about the potential risks of a recession. As inflation continues to rise and geopolitical rumblings increase, more analysts are coming out of the woodwork and broadcasting their anxieties.

Consumer staples stocks are shares of publicly traded companies that provide goods and services that people use on a frequent basis. Most notably, these stocks include the essentials such as food, clothing and personal care products. This category stands in contrast to the consumer discretionary sector, which largely entails luxuries that people don’t necessarily need but rather desire.

Under an economic downturn, average households are much likelier to cut spending on discretionary products. On the other hand, consumer staples stocks could better ride the wave of volatility.

Investing in this segment doesn’t guarantee upside nor protection. Everything in the capital markets carries risk. However, given the ambiguity of the hour, consumer staples stocks to buy offer a mixture of stability and growth potential.

Colgate-Palmolive CL $80.99
Procter & Gamble PG $159.46
Costco COST $591.09
Casey’s General Stores CASY $210.63
Home Depot HD $310.42
Sysco SYY $86.67
Freshpet FRPT $110.22
Unilever UL $45.01
Philip Morris PM $101.20
Anheuser Busch BUD $58.58

Consumer Staples Stocks to Buy: Colgate-Palmolive (CL)

Image of the Colgate-Palmolive logo on a building
Source: Shutterstock

According to a Washington Post article, many folks elected to avoid the dentist’s office during the two years that the coronavirus pandemic upturned our paradigm. However, a good chunk of these folks are not ready to go back, which bodes well for Colgate-Palmolive (NYSE:CL).

Basically, a lot can go wrong during the years avoiding the dentist. Beyond the basic concerns about avoiding necessary personal health sessions, several folks gained weight during the Covid-19 lockdowns. This circumstance implies that many chose to adopt a less-than-healthy diet in addition to a sedentary lifestyle.

But now that the “old normal” is steadily returning, dental care is back at the forefront. From both personal and professional demand, CL should benefit, making it one of the best consumer staples stocks to buy.

Procter & Gamble (PG)

A Procter & Gamble (PG) distribution center in Vandalia.
Source: Jonathan Weiss / Shutterstock.com

Procter & Gamble (NYSE:PG) is a favorite because its products are basically indispensable.

Irrespective of whether a recession enters our radar or not, we must all take care of ourselves and our abodes. Therefore, if you have a long-term framework, you generally can’t go wrong with PG.

Another factor to consider is the company’s dividend yield, which is a little bit above 2%. It’s not something that’s going to make you rich, but you have reasonable assurances that PG’s offerings are relevant whether the economy rises or falls.

Further, management’s acquisitions enhances its profile into various other needs, such as women’s health and family planning. Thus, if you anticipate some troubled waters ahead, PG is one of the consumer staples stocks to put on your watchlist.

Consumer Staples Stocks to Buy: Costco (COST)

A Costco Wholesale (COST) warehouse in Auburn Hills, Michigan.
Source: ilzesgimene / Shutterstock.com

Casey’s General Stores (NASDAQ:CASY) represent a chain of convenience stores located in the Midwest and Southern states.

What should pique your interest about CASY is exactly that: its regional exposure.

Even before the Covid-19 pandemic, millennials have been moving out of the big cities into smaller Midwestern cities. Many young people have migrated to the South, primarily driven by lower costs of living.

Of course, the global health crisis only exacerbated this trend, as soaring costs make it impossible for some to stay in major metropolitan areas.

Therefore, Casey’s could soak up the increased demand, making CASY one of the forward-looking consumer staples stocks to buy.

Consumer Staples Stocks to Buy: Home Depot (HD)

Source: Allmy / Shutterstock.com

Home Depot (NYSE:HD) is down 24% year-to-date, possibly reflecting concerns that the much-celebrated housing boom is perhaps coming to an end.

However, if you want to hold consumer staples stocks for the long run, HD could be presenting a viable discount at current prices. That’s because it’s not just an indirect play on the real estate boom. Instead, it also ties into the repair and innovation market.

Indeed, evidence indicates that the Covid-19 crisis sparked an increase in the do-it-yourself (DIY) home improvement sector. Thus, it might be premature to give up on HD right now.

Sysco (SYY)

Best Stocks for Students: Sysco (SYY)
Source: Shutterstock

Back when the pandemic first capsized our society, food-distribution specialist Sysco (NYSE:SYY) suffered an extremely steep decline.

True, food distribution is a critical service among consumer staples stocks so you couldn’t say that Sysco lost its entire relevance. However, the company features a diverse business profile, which includes restaurants and leisure subsegments.

Unfortunately, with a crackdown on non-essential activities early into the pandemic, the distribution firm suffered a massive hit in both the top and bottom line. It’s only until recently — based on a trailing-12-month perspective — that Sysco’s revenue matches that of pre-pandemic norms.

While the business did suffer an opportunity cost, if social normalization trends continue — and that does seem to be the natural trajectory — Sysco could make a strong comeback.

Consumers everywhere are ready to reclaim their normal activities. Therefore, Sysco’s distribution channels should normalize across the boarding, making SYY one of the consumer staples stocks to buy.

Freshpet (FRPT)

Man is typing on laptop with ginger cat sleeping on keyboard.
Source: Sharomka via Shutterstock

Even the Covid-19 crisis didn’t stop pet parents from shirking their responsibilities. Therefore, Freshpet (NASDAQ:FRPT) is probably in good hands.

If a life-threatening pandemic couldn’t dent demand, I don’t think inflationary pressures will.

Adding to the narrative for one of the most intriguing consumer staples stocks to buy, a survey from Ypulse.com revealed that 76% of millennials are pet parents. Of course, this age demographic also represents the largest generation in the U.S. workforce so the long-term upside narrative is obvious.

Unilever (UL)

The blue Unilever sign next to the desk inside de head office in Rotterdam, the Netherlands.
Source: BYonkruud / Shutterstock.com

Unilever (NYSE:UL) features a variety of consumer goods and is fundamentally one of the most relevant corporate entities.

Though you can really address any one of its product categories as a reason to put it on your watchlist, I especially like the personal and beauty care angle.

Increasingly, it appears that businesses that allowed work from home now want their employees to return to the office, at least for a few days of the week. Such decisions on a wider scale will incentivize beauty care, which augurs well for UL.

Plus, increased physical socialization means people need to start taking care of themselves, thus enhancing UL’s appeal among consumer staples stocks.

Consumer Stocks to Buy: Philip Morris (PM)

An image of a cigarette and an e-cigarette side-by-side on a wood surface.
Source: vfhnb12 / Shutterstock.com

Philip Morris (NYSE:PM) could be in for a banner year.

Fundamentally, I anticipate that if we suffer a global recession that smoking rates will rise.

For instance, studies show perceived increased stress among those who increased their smoking activities during the Covid-19 pandemic. A report from the American Journal of Managed Care revealed that U.S. cigarette sales increased 14% higher than anticipated during the pandemic.

Of course, Covid being a pandemic, many smokers had a logical reason to avoid the addictive habit. But what about a strictly economic recession? Without an overriding health threat, smoking incidences could rise, which would cynically play into PM’s hands.

Anheuser Busch (BUD)

Corporate building with Anheuser Busch (BUD) logo on it
Source: legacy1995 / Shutterstock.com

If you’re uncertain about which way the economy will turn, Anheuser Busch (NYSE:BUD) could be one of the best consumer staples stocks to buy.

Drinking alcohol doesn’t carry the same social stigma as smoking tobacco. Therefore, if the economy continues to tick higher, Anheuser Busch sales should increase.

Along with increased traffic to bars and restaurants, you should see greater attendance at live sporting events — again, due to the desire among the population to reclaim their normal activities.

The evidence indicates that people turned to vice activities to cope with the Covid-19 crisis. It wouldn’t be a stretch, then, to assume that many will turn to alcohol as an alternative coping mechanism if economic conditions deteriorate.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.

Article printed from InvestorPlace Media, https://investorplace.com/2022/04/10-consumer-staples-stocks-to-buy-and-hold-in-the-search-for-safety/.

©2023 InvestorPlace Media, LLC