For Immediate Release
Chicago, IL – May 2, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: PepsiCo (
PEP Quick Quote PEP - Free Report) , General Mills ( GIS Quick Quote GIS - Free Report) and Colgate-Palmolive ( CL Quick Quote CL - Free Report) . Here are highlights from Monday’s Analyst Blog: 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, General Mills and Colgate-Palmolive – have all provided solid gains over the last three months.
In addition, all three reside in the Zacks Consumer Staples sector, an area where companies have been able to utilize their pricing power and deliver better-than-expected quarterly results.
Consumer Staples titan PepsiCo posted strong quarterly results in its latest release just on April 25
th, 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.
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.
And for the cherry on top, the company is forecasted to continue to 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.
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 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.
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.
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.
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.
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.
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 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.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of
+46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation. See Stocks Free >>
Zacks Investment Research
800-767-3771 ext. 9339
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss
. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.