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5 Consumer Staples Stocks to Buy in a Volatile Market
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Wall Street witnessed a sharp decline on Oct 24 as a result of intensifying market turmoil. The broad-based market decline which commenced with soaring bond yields has escalated further due to tariff-related conflicts, expectations of higher interest rates in the near future and projection of a slowdown in global growth by the IMF.
Negative sentiments have dented investor confidence to such an extent that strong third quarter earnings results have failed to instill optimism. At this juncture, it will be prudent to invest in stocks of defensive industry like consumer staples with a favorable Zacks Rank and strong growth potential.
Wall Street Tumbles on Wednesday
On Oct 24, all three major stock indexes – the Dow, S&P 500 and Nasdaq Composite – plunged 2.4%, 3.1% and 4.4%, respectively. So far in October, these three indexes have plummeted 7.1%, 8.9% and 11.7%, respectively. Moreover, both the Dow and S&P 500 are in the negative territory year to date.
The benchmark S&P 500 index is down for six straight days. The blue-chip Dow 30 has shed 2,245 points since it achieved its all-time high in Oct. 3. The tech-laden Nasdaq Composite reported its worst single-day loss since Aug 18, 2011 and entered into correction territory as the index fell more than 10% below its all-time high posted on Aug 29.
Why Consumer Staple Stocks?
The consumer staples sector includes companies that provide necessities and products used in daily lives, which make them defensive in nature. With the companies providing food, beverages, soap and cleaning materials and products related to beauty and personal care among others, consumer staples has always been the go-to place for investors who want to play it safe during extreme market fluctuations.
Consequently, adding stocks from the consumer staples basket usually lends more stability to portfolios in an uncertain market condition. Moreover, the sector remains a lucrative space for income-seeking investors given its strong dividend yield.
As of Oct 24, 27.6% consumer staple companies within the S&P 500 index have reported third-quarter results. These companies have reported 5.9% year-over-year earnings growth on 1.8% revenue growth.
Notably, in the past one month (which includes October stock market routs), S&P 500’s Consumer Staple Select Sector SPDR (XLP) gained 1.1%, trailing only Utilities Select Sector SPDR (XLU) gain of 5%. All the remaining nine sectors of the S&P 500 suffered significant losses during this period.
Our Top Picks
Stock markets are likely to remain volatile in near future due to trade concerns, geopolitical conflicts and upcoming U.S mid-term elections. At this stage, investment in defensive sectors such as consumer staple will be fruitful. We have narrowed down our search on five consumer staple stocks with either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and strong growth potential. All five stocks have already provided fabulous turn year to date.
The chart below shows price performance of our five picks year to date.
The Chefs' Warehouse Inc. (CHEF - Free Report) distributes specialty food products such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate and pastry products in the United States and Canada. It sports a Zacks Rank #1. You can seethe complete list of today’s Zacks #1 Rank stocks here. The company has expected earnings growth of 77.3% for current year. The Zacks Consensus Estimate for the current year has improved by 1.3% over the last 30 days.
Archer-Daniels-Midland Co. (ADM - Free Report) procures, transports, stores, processes, and merchandises agricultural commodities and products. It flaunts a Zacks Rank #1. The company has expected earnings growth of 41.6% for current year. The Zacks Consensus Estimate for the current year has improved by 0.3% over the last 30 days.
Helen of Troy Ltd. (HELE - Free Report) is a leading global consumer products company offering creative solutions for customers through a diversified portfolio of well-recognized and widely trusted brands. It sports a Zacks Rank #1. The company has expected earnings growth of 8.4% for current year. The Zacks Consensus Estimate for the current year has improved by 2.1% over the last 30 days.
Lamb Weston Holdings Inc. (LW - Free Report) is a supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers. It carries a Zacks Rank #2. The company has expected earnings growth of 12.4% for current year. The Zacks Consensus Estimate for the current year has improved by 1.4% over the last 30 days.
McCormick & Company Inc. (MKC - Free Report) manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry. It carries a Zacks Rank #2. The company has expected earnings growth of 17.1% for current year. The Zacks Consensus Estimate for the current year has improved by 0.6% over the last 30 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
5 Consumer Staples Stocks to Buy in a Volatile Market
Wall Street witnessed a sharp decline on Oct 24 as a result of intensifying market turmoil. The broad-based market decline which commenced with soaring bond yields has escalated further due to tariff-related conflicts, expectations of higher interest rates in the near future and projection of a slowdown in global growth by the IMF.
Negative sentiments have dented investor confidence to such an extent that strong third quarter earnings results have failed to instill optimism. At this juncture, it will be prudent to invest in stocks of defensive industry like consumer staples with a favorable Zacks Rank and strong growth potential.
Wall Street Tumbles on Wednesday
On Oct 24, all three major stock indexes – the Dow, S&P 500 and Nasdaq Composite – plunged 2.4%, 3.1% and 4.4%, respectively. So far in October, these three indexes have plummeted 7.1%, 8.9% and 11.7%, respectively. Moreover, both the Dow and S&P 500 are in the negative territory year to date.
The benchmark S&P 500 index is down for six straight days. The blue-chip Dow 30 has shed 2,245 points since it achieved its all-time high in Oct. 3. The tech-laden Nasdaq Composite reported its worst single-day loss since Aug 18, 2011 and entered into correction territory as the index fell more than 10% below its all-time high posted on Aug 29.
Why Consumer Staple Stocks?
The consumer staples sector includes companies that provide necessities and products used in daily lives, which make them defensive in nature. With the companies providing food, beverages, soap and cleaning materials and products related to beauty and personal care among others, consumer staples has always been the go-to place for investors who want to play it safe during extreme market fluctuations.
Consequently, adding stocks from the consumer staples basket usually lends more stability to portfolios in an uncertain market condition. Moreover, the sector remains a lucrative space for income-seeking investors given its strong dividend yield.
As of Oct 24, 27.6% consumer staple companies within the S&P 500 index have reported third-quarter results. These companies have reported 5.9% year-over-year earnings growth on 1.8% revenue growth.
Notably, in the past one month (which includes October stock market routs), S&P 500’s Consumer Staple Select Sector SPDR (XLP) gained 1.1%, trailing only Utilities Select Sector SPDR (XLU) gain of 5%. All the remaining nine sectors of the S&P 500 suffered significant losses during this period.
Our Top Picks
Stock markets are likely to remain volatile in near future due to trade concerns, geopolitical conflicts and upcoming U.S mid-term elections. At this stage, investment in defensive sectors such as consumer staple will be fruitful. We have narrowed down our search on five consumer staple stocks with either a Zacks Rank #1 (Strong Buy) or 2 (Buy) and strong growth potential. All five stocks have already provided fabulous turn year to date.
The chart below shows price performance of our five picks year to date.
The Chefs' Warehouse Inc. (CHEF - Free Report) distributes specialty food products such as artisan charcuterie, specialty cheeses, unique oils and vinegars, truffles, caviar, chocolate and pastry products in the United States and Canada. It sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here. The company has expected earnings growth of 77.3% for current year. The Zacks Consensus Estimate for the current year has improved by 1.3% over the last 30 days.
Archer-Daniels-Midland Co. (ADM - Free Report) procures, transports, stores, processes, and merchandises agricultural commodities and products. It flaunts a Zacks Rank #1. The company has expected earnings growth of 41.6% for current year. The Zacks Consensus Estimate for the current year has improved by 0.3% over the last 30 days.
Helen of Troy Ltd. (HELE - Free Report) is a leading global consumer products company offering creative solutions for customers through a diversified portfolio of well-recognized and widely trusted brands. It sports a Zacks Rank #1. The company has expected earnings growth of 8.4% for current year. The Zacks Consensus Estimate for the current year has improved by 2.1% over the last 30 days.
Lamb Weston Holdings Inc. (LW - Free Report) is a supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers. It carries a Zacks Rank #2. The company has expected earnings growth of 12.4% for current year. The Zacks Consensus Estimate for the current year has improved by 1.4% over the last 30 days.
McCormick & Company Inc. (MKC - Free Report) manufactures, markets, and distributes spices, seasoning mixes, condiments, and other flavorful products to the food industry. It carries a Zacks Rank #2. The company has expected earnings growth of 17.1% for current year. The Zacks Consensus Estimate for the current year has improved by 0.6% over the last 30 days.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>