Consumer staples are considered safe havens in turbulent markets due to their inelastic demand profiles. Surprisingly, the sector hasn’t played its shielding role over the past six months as it tumbled 13.7%. This drop was worse than the S&P 500’s 5.5% loss.
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. With that said, here is one resilient consumer stock we’ve added to our cart and two best left ignored.
Two Consumer Staples Stocks to Sell:
J&J Snack Foods (JJSF)
Market Cap: $2.26 billion
Best known for its SuperPretzel soft pretzels and ICEE frozen drinks, J&J Snack Foods (NASDAQ: JJSF) produces a range of snacks and beverages and distributes them primarily to supermarket and food service customers.
Why Are We Cautious About JJSF?
- Modest revenue base of $1.59 billion gives it less fixed cost leverage and fewer distribution channels than larger companies
- Estimated sales growth of 2.8% for the next 12 months implies demand will slow from its three-year trend
- ROIC of 6.6% reflects management’s challenges in identifying attractive investment opportunities
At $116.75 per share, J&J Snack Foods trades at 22.8x forward P/E. Dive into our free research report to see why there are better opportunities than JJSF.
Post (POST)
Market Cap: $6.17 billion
Founded in 1895, Post (NYSE: POST) is a packaged food company known for its namesake breakfast cereal and healthier-for-you snacks.
Why Does POST Give Us Pause?
- Shrinking unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Demand will likely fall over the next 12 months as Wall Street expects flat revenue
- Below-average returns on capital indicate management struggled to find compelling investment opportunities
Post is trading at $113.97 per share, or 15.6x forward P/E. Check out our free in-depth research report to learn more about why POST doesn’t pass our bar.
One Consumer Staples Stock to Buy:
Philip Morris (PM)
Market Cap: $264.1 billion
Founded in 1847, Philip Morris International (NYSE: PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.
Why Do We Love PM?
- Products are seeing elevated demand as its unit sales averaged 3% growth over the past two years
- Differentiated product offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 64.8%
- PM is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its growing cash flow gives it even more resources to deploy
Philip Morris’s stock price of $170.05 implies a valuation ratio of 22.6x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Market indices reached historic highs following Donald Trump’s presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth.
While this has caused many investors to adopt a "fearful" wait-and-see approach, we’re leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 9 Market-Beating Stocks. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
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-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today for free.
