Regarded as defensive investments, consumer staples stocks are generally safe bets in choppy markets. On the other hand, they usually underperform during bull runs, and this paradigm has rung true over the past six months as the sector’s -6.2% decline paled in comparison to the S&P 500’s 21% gain.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here is one resilient consumer stock we’ve added to our cart and two we’re steering clear of.
Two Consumer Staples Stocks to Sell:
Spectrum Brands (SPB)
Market Cap: $1.30 billion
A leader in multiple consumer product categories, Spectrum Brands (NYSE: SPB) is a diversified company with a portfolio of trusted brands spanning home appliances, garden care, personal care, and pet care.
Why Do We Pass on SPB?
- Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth
- Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
- Low returns on capital reflect management’s struggle to allocate funds effectively
Spectrum Brands is trading at $53.88 per share, or 13.5x forward P/E. Dive into our free research report to see why there are better opportunities than SPB.
Campbell's (CPB)
Market Cap: $8.97 billion
With its iconic canned soup as its cornerstone product, Campbell's (NASDAQ: CPB) is a packaged food company with an illustrious portfolio of brands.
Why Do We Avoid CPB?
- Shrinking unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Projected sales decline of 3.1% for the next 12 months points to a tough demand environment ahead
- Annual earnings per share growth of 1.6% underperformed its revenue over the last three years, showing its incremental sales were less profitable
Campbell’s stock price of $30.03 implies a valuation ratio of 12.2x forward P/E. Read our free research report to see why you should think twice about including CPB in your portfolio.
One Consumer Staples Stock to Buy:
Monster (MNST)
Market Cap: $65.25 billion
Founded in 2002 as a natural soda and juice company, Monster Beverage (NASDAQ: MNST) is a pioneer of the energy drink category, and its Monster Energy brand targets a young, active demographic.
Why Will MNST Beat the Market?
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 27.5%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
- ROIC punches in at 37.6%, illustrating management’s expertise in identifying profitable investments
At $66.88 per share, Monster trades at 33.1x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free for active Edge members.
Stocks We Like Even More
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
