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4 Stocks to Buy on Rebound in March Consumer Confidence
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Americans seem more optimistic for the first time in months despite the recent turmoil in the banking sector and the Fed’s continuation of the interest rate hike. Inflation is still at multi-year highs, and consumers believe that the situation is unlikely to change over the next year.
However, they are confident about the underlying strength in the economy, which is likely to save it from slipping into a recession as the Fed will finally manage to bring inflation down. Given this situation, it would be ideal to invest in defensive sector stocks such as consumer staples.
Consumer Confidence Rises in March
The Conference Board said on Mar 28 that the Consumer Confidence Index rose to 104.2 in March from an upwardly revised 103.4 in February. The unexpected jump in March also came in above the consensus estimate of a reading of 101.
The solid rebound comes despite the recent turmoil in the banking sector that triggered a massive selloff in financial stocks following the collapse of Silicon Valley Bank and Silvergate Corporation. Since then, things have become worse with the bank's collapse and the Federal Deposit Insurance Corporation taking over the management of the banks.
However, consumers are still confident. The consumer confidence survey showed that an increasing number of people are planning to buy automobiles and household consumer durables like refrigerators, television sets, vacuum cleaners and washing machines over the next six months.
The increase in consumer confidence for the upcoming six months helped the headline index for March. The Expectations Index improved to 73 in March from 70.4 in February. However, the Present Situation Index fell to 151.1 from 153 in the previous month.
The 12-month inflation expectations of consumers increased from 6.2% to 6.3% in March. This came as the Fed increased interest rates by another 25 basis points in March, and officials said earlier in the month that the central bank will have to continue raising interest rates for a longer time than expected in order to fight soaring inflation.
Investors, however, have been feeling confident after fears of a liquidity crisis in the U.S. financial system somewhat waned following an assurance from Treasury Secretary Janet Yellen that the banking sector is on solid ground.
However, the survey showed that consumers’ expectations of inflation rising over the next year has made them more inclined toward slashing spending on consumer discretionary goods, including visiting amusement parks and dining out.
Despite rising costs, people will need to spend on consumer staples and other necessities. Such stocks are unlikely to be affected by market volatility and rising inflation and recession worries. Thus, consumer staples stocks are currently a safe pick for investors.
The sector is known for the transparency and consistency of its profitability and cash flow. So, adding stocks to a portfolio from the consumer staples basket makes it more resilient in a choppy market.
Our Choices
The Hershey Company (HSY - Free Report) is the largest chocolate manufacturer in North America as well as a global leader in chocolate and non-chocolate confectionery. Additionally, HSY manufactures pantry items like baking ingredients, toppings and beverages; and gum and mint refreshment products; snack bites and mixes, as well as spreads.
The Hershey Company’s expected earnings growth rate for the current year is 10%. The Zacks Consensus Estimate for the current-year earnings has improved 4.5% over the past 60 days. HSY has a dividend yield of 1.7%. The Hershey Company has a Zacks Rank #2 (Buy).
General Mills, Inc. (GIS - Free Report) is a global manufacturer and marketer of branded consumer foods sold through retail stores. GIS also serves the foodservice and commercial baking industries. General Mills’ principal product categories include ready-to-eat cereals, convenient meals, snacks (including grain, fruit and savory snacks, nutrition bars, and frozen hot snacks), super-premium ice creams as well as baking mixes and ingredients.
General Mills’ expected earnings growth rate for the current year is 7.1%. The Zacks Consensus Estimate for General Mills’current-year earnings has improved 2.4% over the past 60 days. GIS has a dividend yield of 2.5%. General Mills has a Zacks Rank #2. You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Mondelez International, Inc. (MDLZ - Free Report) is one of the leading global snacks’ companies. MDLZ makes snack food products. Mondelez International’s product categories include chocolates; biscuits (cookies, crackers and salted snacks); gum and candy, beverages and cheese & grocery products.
Mondelez International’s expected earnings growth rate for the current year is 7.1%. The Zacks Consensus Estimate for current-year earnings has improved 1% over the past 60 days. MDLZ has a dividend yield of 2.2%. Mondelez Internationalhas a Zacks Rank #2.
Vital Farms, Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. VITL’s products include shell eggs, butter, hard-boiled eggs, clarified butter (ghee) and liquid whole eggs.
Vital Farms’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for the current-year earnings has improved 72% over the past 60 days. VITL presently carries a Zacks Rank #2.
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4 Stocks to Buy on Rebound in March Consumer Confidence
Americans seem more optimistic for the first time in months despite the recent turmoil in the banking sector and the Fed’s continuation of the interest rate hike. Inflation is still at multi-year highs, and consumers believe that the situation is unlikely to change over the next year.
However, they are confident about the underlying strength in the economy, which is likely to save it from slipping into a recession as the Fed will finally manage to bring inflation down. Given this situation, it would be ideal to invest in defensive sector stocks such as consumer staples.
Consumer Confidence Rises in March
The Conference Board said on Mar 28 that the Consumer Confidence Index rose to 104.2 in March from an upwardly revised 103.4 in February. The unexpected jump in March also came in above the consensus estimate of a reading of 101.
The solid rebound comes despite the recent turmoil in the banking sector that triggered a massive selloff in financial stocks following the collapse of Silicon Valley Bank and Silvergate Corporation. Since then, things have become worse with the bank's collapse and the Federal Deposit Insurance Corporation taking over the management of the banks.
However, consumers are still confident. The consumer confidence survey showed that an increasing number of people are planning to buy automobiles and household consumer durables like refrigerators, television sets, vacuum cleaners and washing machines over the next six months.
The increase in consumer confidence for the upcoming six months helped the headline index for March. The Expectations Index improved to 73 in March from 70.4 in February. However, the Present Situation Index fell to 151.1 from 153 in the previous month.
The 12-month inflation expectations of consumers increased from 6.2% to 6.3% in March. This came as the Fed increased interest rates by another 25 basis points in March, and officials said earlier in the month that the central bank will have to continue raising interest rates for a longer time than expected in order to fight soaring inflation.
Investors, however, have been feeling confident after fears of a liquidity crisis in the U.S. financial system somewhat waned following an assurance from Treasury Secretary Janet Yellen that the banking sector is on solid ground.
However, the survey showed that consumers’ expectations of inflation rising over the next year has made them more inclined toward slashing spending on consumer discretionary goods, including visiting amusement parks and dining out.
Despite rising costs, people will need to spend on consumer staples and other necessities. Such stocks are unlikely to be affected by market volatility and rising inflation and recession worries. Thus, consumer staples stocks are currently a safe pick for investors.
The sector is known for the transparency and consistency of its profitability and cash flow. So, adding stocks to a portfolio from the consumer staples basket makes it more resilient in a choppy market.
Our Choices
The Hershey Company (HSY - Free Report) is the largest chocolate manufacturer in North America as well as a global leader in chocolate and non-chocolate confectionery. Additionally, HSY manufactures pantry items like baking ingredients, toppings and beverages; and gum and mint refreshment products; snack bites and mixes, as well as spreads.
The Hershey Company’s expected earnings growth rate for the current year is 10%. The Zacks Consensus Estimate for the current-year earnings has improved 4.5% over the past 60 days. HSY has a dividend yield of 1.7%. The Hershey Company has a Zacks Rank #2 (Buy).
General Mills, Inc. (GIS - Free Report) is a global manufacturer and marketer of branded consumer foods sold through retail stores. GIS also serves the foodservice and commercial baking industries. General Mills’ principal product categories include ready-to-eat cereals, convenient meals, snacks (including grain, fruit and savory snacks, nutrition bars, and frozen hot snacks), super-premium ice creams as well as baking mixes and ingredients.
General Mills’ expected earnings growth rate for the current year is 7.1%. The Zacks Consensus Estimate for General Mills’current-year earnings has improved 2.4% over the past 60 days. GIS has a dividend yield of 2.5%. General Mills has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Mondelez International, Inc. (MDLZ - Free Report) is one of the leading global snacks’ companies. MDLZ makes snack food products. Mondelez International’s product categories include chocolates; biscuits (cookies, crackers and salted snacks); gum and candy, beverages and cheese & grocery products.
Mondelez International’s expected earnings growth rate for the current year is 7.1%. The Zacks Consensus Estimate for current-year earnings has improved 1% over the past 60 days. MDLZ has a dividend yield of 2.2%. Mondelez Internationalhas a Zacks Rank #2.
Vital Farms, Inc. (VITL - Free Report) offers a range of produced pasture-raised foods. VITL’s products include shell eggs, butter, hard-boiled eggs, clarified butter (ghee) and liquid whole eggs.
Vital Farms’ expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for the current-year earnings has improved 72% over the past 60 days. VITL presently carries a Zacks Rank #2.