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Forget Colgate, Buy These 4 Consumer Stocks Instead for 2019
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The consumer environment looks robust, with a steady increase in consumer spending throughout 2018. This, along with a favorable job market, bolstered the GDP growth rate, which grew 3.5% in the third quarter. On the flip side, trade war concerns between the United States and China, uncertain global markets, higher raw material and operating expenses, and unfavorable currency rates are weighing on revenues and margins of Consumer Staples behemoths like Colgate-Palmolive Company (CL - Free Report) .
Nonetheless, there are a few stocks across the space that are set to outshine in 2019 on the back of product improvement, packaging and marketing initiatives, cost-saving programs, and restructuring initiatives. Based on the economic backdrop and other factors, we have handpicked four Consumer Staples stocks that should deliver solid returns in 2019.
Factors Plaguing the Sector & Colgate
Higher raw material and freight costs (due to the shortage of truck drivers and rising fuel surcharges) resulted in sluggish margin trends in the consumer packaged goods industry. Additionally, elevated operating expenses due to higher advertising investments related to product innovations, core businesses and consumption-building initiatives remain deterrents. Additionally, a stronger U.S. dollar is presently hurting overseas revenues and margins of these stocks.
The aforementioned factors have been hurting Colgate’s performance. Additionally, trade inventory reductions in China and volatility in Brazil, as well as soft category growth rates across various markets, weighed on the top line of the company. These factors are likely to be major causes of concern for Colgate in 2019.
Consequently, this Zacks Rank #3 (Hold) stock has been witnessing downward revisions lately. The Zacks Consensus Estimate for the company’s earnings in 2019 has declined by 1 cent to $3.04 per share, in the past seven days.
Further, the Colgate stock witnessed significant declines throughout 2018. The stock has dipped as much as 17.2% year to date, considerably wider than declines of 2.1% and 4.8% for the industry and S&P 500, respectively. Additionally, Colgate has a Growth Score of C, indicating that the stock is not promising at present.
Why Invest in Consumer Staples Stocks
Nevertheless, it is not wise to completely refrain from investing in Consumer Staples stocks. We suggest continuing to invest in these stocks, given the strong global demand for consumer products, which indicates robust prospects. Additionally, some of these companies are poised to gain from product improvement and innovation, packaging, and marketing initiatives, as well as restructuring actions — including acquisitions and divestitures, which should cushion soft top-line and margin trends.
4 Stocks to Buy for 2019
In view of these positives, we have zeroed in on four Consumer Staples stocks that are likely to outperform and boost your portfolio returns. Each of these stocks currently carry a Zacks Rank of #1 (Strong Buy) or #2 (Buy). Moreover, these stocks flaunt a VGM Score of A or B.
Based in Illinois, Archer Daniels Midland Company (ADM - Free Report) is one of the leading food processing companies in the world. The company delivered average positive earnings surprise of 26.9% in the trailing four quarters. The Zacks Consensus Estimate for earnings in 2019 is pegged at $3.61 per share, representing 1.4% growth year over year. The stock has rallied 7.4% in the past year. The company has a VGM Score of B and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food products in the United States and Canada. The company presently carries a Zacks Rank #2 and has a VGM Score of A. It delivered average positive earnings surprise of 54.7% in the trailing four quarters. In the last 60 days, the Zacks Consensus Estimate for earnings moved up nearly 1% to $1.02 per share for 2019. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 30.8% for 2019. Moreover, the stock has soared nearly 63.7% in the past year.
Tupperware Brands Corporation (TUP - Free Report) is a direct-to-consumer seller of various products across a range of brands and categories in various countries. The company currently has a Zacks Rank #2 and a VGM Score of A. It delivered average positive earnings surprise of 6.2% in the trailing four quarters. The Zacks Consensus Estimate for earnings in 2019 has moved up by 3 cents to $4.37 per share in the last 60 days. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 0.8% for 2019. The stock has improved 2.6% in the past three months.
Vector Group Ltd. (VGR - Free Report) makes and sells cigarettes in the United States. The company currently carries a Zacks Rank #2 and has a VGM Score of A. It delivered a positive earnings surprise of 27.3% in the last reported quarter. The Zacks Consensus Estimate for earnings in 2019 is pegged at 68 cents per share, representing 30.8% growth year over year.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
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Forget Colgate, Buy These 4 Consumer Stocks Instead for 2019
The consumer environment looks robust, with a steady increase in consumer spending throughout 2018. This, along with a favorable job market, bolstered the GDP growth rate, which grew 3.5% in the third quarter. On the flip side, trade war concerns between the United States and China, uncertain global markets, higher raw material and operating expenses, and unfavorable currency rates are weighing on revenues and margins of Consumer Staples behemoths like Colgate-Palmolive Company (CL - Free Report) .
Nonetheless, there are a few stocks across the space that are set to outshine in 2019 on the back of product improvement, packaging and marketing initiatives, cost-saving programs, and restructuring initiatives. Based on the economic backdrop and other factors, we have handpicked four Consumer Staples stocks that should deliver solid returns in 2019.
Factors Plaguing the Sector & Colgate
Higher raw material and freight costs (due to the shortage of truck drivers and rising fuel surcharges) resulted in sluggish margin trends in the consumer packaged goods industry. Additionally, elevated operating expenses due to higher advertising investments related to product innovations, core businesses and consumption-building initiatives remain deterrents. Additionally, a stronger U.S. dollar is presently hurting overseas revenues and margins of these stocks.
The aforementioned factors have been hurting Colgate’s performance. Additionally, trade inventory reductions in China and volatility in Brazil, as well as soft category growth rates across various markets, weighed on the top line of the company. These factors are likely to be major causes of concern for Colgate in 2019.
Consequently, this Zacks Rank #3 (Hold) stock has been witnessing downward revisions lately. The Zacks Consensus Estimate for the company’s earnings in 2019 has declined by 1 cent to $3.04 per share, in the past seven days.
Further, the Colgate stock witnessed significant declines throughout 2018. The stock has dipped as much as 17.2% year to date, considerably wider than declines of 2.1% and 4.8% for the industry and S&P 500, respectively. Additionally, Colgate has a Growth Score of C, indicating that the stock is not promising at present.
Why Invest in Consumer Staples Stocks
Nevertheless, it is not wise to completely refrain from investing in Consumer Staples stocks. We suggest continuing to invest in these stocks, given the strong global demand for consumer products, which indicates robust prospects. Additionally, some of these companies are poised to gain from product improvement and innovation, packaging, and marketing initiatives, as well as restructuring actions — including acquisitions and divestitures, which should cushion soft top-line and margin trends.
4 Stocks to Buy for 2019
In view of these positives, we have zeroed in on four Consumer Staples stocks that are likely to outperform and boost your portfolio returns. Each of these stocks currently carry a Zacks Rank of #1 (Strong Buy) or #2 (Buy). Moreover, these stocks flaunt a VGM Score of A or B.
Based in Illinois, Archer Daniels Midland Company (ADM - Free Report) is one of the leading food processing companies in the world. The company delivered average positive earnings surprise of 26.9% in the trailing four quarters. The Zacks Consensus Estimate for earnings in 2019 is pegged at $3.61 per share, representing 1.4% growth year over year. The stock has rallied 7.4% in the past year. The company has a VGM Score of B and it currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Chefs' Warehouse, Inc. (CHEF - Free Report) distributes specialty food products in the United States and Canada. The company presently carries a Zacks Rank #2 and has a VGM Score of A. It delivered average positive earnings surprise of 54.7% in the trailing four quarters. In the last 60 days, the Zacks Consensus Estimate for earnings moved up nearly 1% to $1.02 per share for 2019. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 30.8% for 2019. Moreover, the stock has soared nearly 63.7% in the past year.
Tupperware Brands Corporation (TUP - Free Report) is a direct-to-consumer seller of various products across a range of brands and categories in various countries. The company currently has a Zacks Rank #2 and a VGM Score of A. It delivered average positive earnings surprise of 6.2% in the trailing four quarters. The Zacks Consensus Estimate for earnings in 2019 has moved up by 3 cents to $4.37 per share in the last 60 days. Notably, the projected year-over-year earnings growth rate for the company is currently pegged at 0.8% for 2019. The stock has improved 2.6% in the past three months.
Vector Group Ltd. (VGR - Free Report) makes and sells cigarettes in the United States. The company currently carries a Zacks Rank #2 and has a VGM Score of A. It delivered a positive earnings surprise of 27.3% in the last reported quarter. The Zacks Consensus Estimate for earnings in 2019 is pegged at 68 cents per share, representing 30.8% growth year over year.
In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?
These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead. Be among the first to see the new Zacks Top 10 Stocks >>