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Needless to say, it’s going to be an action-packed week in the market, with an extensive list of quarterly prints scheduled to come and a looming FOMC meeting weighing on the minds of market participants.
Last week, big-tech showcased their market-moving powers, posting results that had the market impressed and keeping sentiment positive enough.
With a big week in the market ahead of us, it’s reasonable to assume volatility could be on the horizon. And for those interested in a more conservative approach in the near-term, considering low-beta stocks could be a beneficial strategy.
Three top-ranked low-beta stocks – PepsiCo (PEP - Free Report) , General Mills (GIS - Free Report) , and Colgate-Palmolive (CL - Free Report) – have all provided solid gains over the last three months, as we can see illustrated below.
Image Source: Zacks Investment Research
In addition, all three reside in the Zacks Consumer Staples sector, an area that companies have been able to utilize their pricing power and deliver better-than-expected quarterly results.
PepsiCo
Consumer Staples titan PepsiCo posted strong quarterly results in its latest release just on April 25th, providing upbeat guidance and delivering a positive 9.5% EPS surprise. PEP’s top line results were also strong, with revenue growing 10% year-over-year.
The market took the quarterly results in stride, with PEP shares finding plenty of buyers post-earnings and closing 2.5% higher.
Image Source: Zacks Investment Research
Undoubtedly impressive, the company is a member of the elite Dividend Kings club, reflecting a commitment to increasingly rewarding shareholders with steady payouts. Currently, PEP’s dividend yields 2.4% annually, a few ticks below the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
And for the cherry on top, the company is forecasted to continue grow steadily, with earnings estimated to climb 7% in its current fiscal year (FY23) and a further 8% in FY24. The projected earnings growth comes on the back of forecasted revenue growth of 4.5% in FY23 and 5% in FY24.
Image Source: Zacks Investment Research
Pricing power leading to strong quarterly results, a shareholder-friendly nature, and steady forecasted growth all make PEP a stock worthy of a watchlist spot.
General Mills
General Mills reported its FY23 Q3 results back in late March. Results came in better-than-expected, with the company raising its FY23 guidance and delivering a beat on the top and bottom line partly thanks to pricing power.
Image Source: Zacks Investment Research
As we can see in the chart below by the green arrow circled, investors cheered on the results.
Image Source: Zacks Investment Research
Shares could appear a bit stretched from a valuation perspective, with the current 19.9X forward twelve-month earnings multiple sitting well above the 16.1X five-year median and a few ticks above the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
And perhaps to the surprise of some, GIS shares have been visibly strong over the last five years, penciling in a sizable 150% gain and crushing the S&P 500’s performance.
Image Source: Zacks Investment Research
Colgate-Palmolive
Colgate-Palmolive is a global leader in the oral care hygiene market. Analysts have pushed their earnings estimates higher across all timeframes as of late, indicating an optimistic near-term outlook.
Image Source: Zacks Investment Research
Like most Consumer Staples stocks, CL rewards its shareholders via its dividend that currently yields 2.4% annually. While the yield is below the Zacks sector average, the company’s 2.6% five-year annualized dividend growth rate helps bridge the gap.
Image Source: Zacks Investment Research
Bottom Line
With a looming FOMC meeting and a schedule packed full of earnings, investors will have plenty to remain busy this week.
And as we’ve all witnessed over the last year, FOMC meetings have regularly brought increased volatility into the market.
Of course, we’ll have to wait for the final decision, but it remains likely for the Fed to raise rates a further 25bps.
For those interested in a more conservative approach in the near-term, all three low-beta stocks above – PepsiCo (PEP - Free Report) , General Mills (GIS - Free Report) , and Colgate-Palmolive (CL - Free Report) – would be great considerations.
All three sport an improved earnings outlook and have recently provided better-than-expected results, with pricing power helping lead the way.
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3 Consumer Staples Stocks Investors Shouldn't Ignore
Needless to say, it’s going to be an action-packed week in the market, with an extensive list of quarterly prints scheduled to come and a looming FOMC meeting weighing on the minds of market participants.
Last week, big-tech showcased their market-moving powers, posting results that had the market impressed and keeping sentiment positive enough.
With a big week in the market ahead of us, it’s reasonable to assume volatility could be on the horizon. And for those interested in a more conservative approach in the near-term, considering low-beta stocks could be a beneficial strategy.
Three top-ranked low-beta stocks – PepsiCo (PEP - Free Report) , General Mills (GIS - Free Report) , and Colgate-Palmolive (CL - Free Report) – have all provided solid gains over the last three months, as we can see illustrated below.
Image Source: Zacks Investment Research
In addition, all three reside in the Zacks Consumer Staples sector, an area that companies have been able to utilize their pricing power and deliver better-than-expected quarterly results.
PepsiCo
Consumer Staples titan PepsiCo posted strong quarterly results in its latest release just on April 25th, providing upbeat guidance and delivering a positive 9.5% EPS surprise. PEP’s top line results were also strong, with revenue growing 10% year-over-year.
The market took the quarterly results in stride, with PEP shares finding plenty of buyers post-earnings and closing 2.5% higher.
Image Source: Zacks Investment Research
Undoubtedly impressive, the company is a member of the elite Dividend Kings club, reflecting a commitment to increasingly rewarding shareholders with steady payouts. Currently, PEP’s dividend yields 2.4% annually, a few ticks below the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
And for the cherry on top, the company is forecasted to continue grow steadily, with earnings estimated to climb 7% in its current fiscal year (FY23) and a further 8% in FY24. The projected earnings growth comes on the back of forecasted revenue growth of 4.5% in FY23 and 5% in FY24.
Image Source: Zacks Investment Research
Pricing power leading to strong quarterly results, a shareholder-friendly nature, and steady forecasted growth all make PEP a stock worthy of a watchlist spot.
General Mills
General Mills reported its FY23 Q3 results back in late March. Results came in better-than-expected, with the company raising its FY23 guidance and delivering a beat on the top and bottom line partly thanks to pricing power.
Image Source: Zacks Investment Research
As we can see in the chart below by the green arrow circled, investors cheered on the results.
Image Source: Zacks Investment Research
Shares could appear a bit stretched from a valuation perspective, with the current 19.9X forward twelve-month earnings multiple sitting well above the 16.1X five-year median and a few ticks above the Zacks Consumer Staples sector average.
Image Source: Zacks Investment Research
And perhaps to the surprise of some, GIS shares have been visibly strong over the last five years, penciling in a sizable 150% gain and crushing the S&P 500’s performance.
Image Source: Zacks Investment Research
Colgate-Palmolive
Colgate-Palmolive is a global leader in the oral care hygiene market. Analysts have pushed their earnings estimates higher across all timeframes as of late, indicating an optimistic near-term outlook.
Image Source: Zacks Investment Research
Like most Consumer Staples stocks, CL rewards its shareholders via its dividend that currently yields 2.4% annually. While the yield is below the Zacks sector average, the company’s 2.6% five-year annualized dividend growth rate helps bridge the gap.
Image Source: Zacks Investment Research
Bottom Line
With a looming FOMC meeting and a schedule packed full of earnings, investors will have plenty to remain busy this week.
And as we’ve all witnessed over the last year, FOMC meetings have regularly brought increased volatility into the market.
Of course, we’ll have to wait for the final decision, but it remains likely for the Fed to raise rates a further 25bps.
For those interested in a more conservative approach in the near-term, all three low-beta stocks above – PepsiCo (PEP - Free Report) , General Mills (GIS - Free Report) , and Colgate-Palmolive (CL - Free Report) – would be great considerations.
All three sport an improved earnings outlook and have recently provided better-than-expected results, with pricing power helping lead the way.