That’s why the upcoming third-quarter earnings season is important for stocks in the consumer staples sector. These companies have solid fundamentals, have shown consistent growth, and have a history of paying dividends. Another factor to consider is the underlying assets that make up the index.

That consistent buying behavior creates benefits for consumer staples stocks and their investors. Among those benefits are predictable revenues and resilience in economic downturns. Combine those features with operational excellence and the best consumer staples stocks deliver slow-and-steady growth in earnings and cash flow over time.

1. The top consumer staple stocks within the sector are issued by companies that produce and sell products that are considered essential and in demand regardless of economic conditions.
2. Shares of consumer staples companies will become less attractive when the yields of some risk-free assets have started rising.
3. Consumers generally buy these products regardless of their financial situation or economic stability.
4. In the most recent quarter, acquisitions added $375 million in incremental sales.
5. This is lower than the overall return of the S&P total market index fund, which returned 9.54% annually on average for the last 10 years.

Partnerships are not a recommendation for you to invest with any one company. Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Brand-name soda makers may have the ability to retain or raise prices, because they face little competition from lower-cost, generic alternatives. For example, soft drink companies Coca-Cola (), Keurig Dr Pepper (), and PepsiCo () have generally experienced strong pricing power due to a lack of competitive private-label alternatives.

Top U.S. consumer staples stocks

Investing in a consumer staples index fund is an easy way for investors interested in the general sector of the market to gain instant, diverse exposure. Instead of hand-selecting a few stocks that you think will perform well, consumer index ETFs and mutual funds allow you to invest in all the sector’s top performers quickly. Consumer staple stocks tend to show less volatility, as customers must purchase them regardless of economic conditions. While you can buy and sell individual stocks in the consumer staples sector to invest in these assets, you also have the option to invest in a «basket» of these stocks using a consumer staple index fund.

Recent Consumer Staples Headlines

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Review current equity sector weights for your portfolio and see how they compare to the market. In the third quarter ended on October 7, 2023, FLO reported 3.5% sales growth to $1.19 billion. LW pays a dividend yield of 1.1%, which equates to annual income of $1.12 per share. Colgate’s dividend yield of 2.47% produces cash income of $1.92 per share. In the nine months ended September 30, 2023, the company repurchased $659 million of its common stock. It’s also comforting to know that Mondelez has outperformed analysts’ revenue and EPS expectations in every quarter since early 2022.

Flowers Foods (FLO)

Investing in consumer staples has benefits and drawbacks, both as index funds and as individual stocks. Think about both potential outcomes before choosing to invest in these funds. A stock market index is a measure that tracks the performance of a group of stocks or other securities, https://forex-review.net/ using a weighted measure to adjust performance. An index fund is a group of stocks that trade together as a single unit under the theme of a specific index. Consumer staples stocks are companies that produce and sell products we regularly need, like food and household products.

For DIY investors, you can use Syfe Trade to invest in specific stocks and ETFs. From now to 31 March 2022, you get to enjoy 5 free trades and super low commissions of US$0.99 per trade thereafter. Nestle operates in nearly 200 countries, employs over 330,000 people and operates over 400 factories.

Are Dividend Consumer Staple Stocks a Good Investment?

However, the consumer staples industry is highly competitive, with many companies competing for market share. Overall, the consumer staples sector is steady compared to others, providing essential products and services needed for years to come. The importance of the consumer staples sector lies in its ability to provide investors with stability and consistency. In times of economic uncertainty, consumers prioritize spending on essential products rather than discretionary items. Some discretionary items include electronics, luxury apparel and other entertainment items. When the overall economy is doing poorly, consumer discretionary stocks tend to decrease in value while consumer staples remain more stable.

Top Canadian agricultural stocks

Pay attention to revenue, profit margins and market capitalization metrics, which can give you an idea of the company’s financial performance and position in the sector. MarketBeat’s stock profiles can be an excellent place to start exploring financials. U.S. stocks in the consumer staples sector have been getting hammered this year as investors fled dividend-paying shares in favor of higher yields and less risk in the U.S. The table below introduces 10 consumer staples stocks that can add value to your portfolio in 2024.

One of the benefits of buying dividend stocks in various sectors of the stock market is that dividend payments can help offset some of the decline in stock value during an economic downturn. Another benefit is that investors can benefit from the compounding effect of dividends if they invest long-term. When dividends are paid, investors can invest that money in consumer staples dividend stocks to buy more shares and earn a higher total return. Additionally, the consumer staples sector has historically experienced lower price volatility compared to other sectors, which are more correlated to business cycles. The sector’s relatively steady sales and profits also provide a source of stability during volatile markets.

Relative to other packaged foods, snacks face less competition from private brands. They’re also particularly resilient, thanks to low price points that position them as affordable treats. Coca-Cola has size, market share and a leading operating margin on its side.

When the economy is struggling, people still need to buy basic necessities like food and toilet paper. That’s why consumer staples tend to do well even when the rest of the market is in a slump. Index funds seek to replicate the performance of a specific market index by holding a portfolio of securities that closely mirror the composition of the index. For example, an S&P 500 index fund coinspot review would hold the same 500 stocks that make up the S&P 500 index in the same proportion represented in the index. This allows them to act as passive investments, offering lower management fees because it’s a rarely rebalanced fund. The S&P/NZX Emerging Opportunities Index has a meaningfully different size profile compared with the existing S&P/NZX size indices and the S&P/NZX 50 Index.

Read on to learn more about how a consumer index fund works, why you might want to invest in consumer staples and more about the pros and cons of these funds. For broader exposure to this sector, you could also buy an exchange-traded fund (ETF) that tracks consumer staples stocks in Canada. Even if you have a high appetite for risk, exposing a portion of your holding to the consumer staples sector could defend your portfolio when the rest of the stock market is weak. Many of the largest consumer staples stocks in the world are headquartered in the U.S. If you’re interested in buying U.S. stocks, the following three companies might be a good place to start. Because of how essential consumer staples are in our lives, these stocks tend to be less volatile than other sectors.