Consumer staples are considered safe havens in turbulent markets due to their inelastic demand profiles. But they’re also double-edged swords as they often lag in booming conditions, and this pattern has persisted recently. Over the past six months, the industry has recorded a loss of 7.4%, a far cry from the S&P 500’s 4.1% ascent.
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 consumer stock boasting a durable advantage and two we’re steering clear of.
Two Consumer StaplesStocks to Sell:
Conagra (CAG)
Market Cap: $9.06 billion
Founded in 1919 as Nebraska Consolidated Mills in Omaha, Nebraska, Conagra Brands today (NYSE: CAG) boasts a diverse portfolio of packaged foods brands that includes everything from whipped cream to jarred pickles to frozen meals.
Why Should You Dump CAG?
- Shrinking unit sales over the past two years indicate demand is soft and that the company may need to revise its product strategy
- Estimated sales decline of 3.5% for the next 12 months implies an even more challenging demand environment
- ROIC of 5.4% reflects management’s challenges in identifying attractive investment opportunities, and its decreasing returns suggest its historical profit centers are aging
Conagra is trading at $19.02 per share, or 7.7x forward P/E. To fully understand why you should be careful with CAG, check out our full research report (it’s free).
Medifast (MED)
Market Cap: $139 million
Known for its Optavia program that combines portion-controlled meal replacements with coaching, Medifast (NYSE: MED) has a broad product portfolio of bars, snacks, drinks, and desserts for those looking to lose weight or consume healthier foods.
Why Is MED Risky?
- Annual sales declines of 30.3% for the past three years show its products struggled to connect with the market
- Operating margin declined by 10.2 percentage points over the last year as its sales cratered
- Earnings per share have contracted by 27% annually over the last three years, a headwind for returns as stock prices often echo long-term EPS performance
At $13.44 per share, Medifast trades at 0.4x forward price-to-sales. Check out our free in-depth research report to learn more about why MED doesn’t pass our bar.
One Consumer Staples Stock to Watch:
Procter & Gamble (PG)
Market Cap: $364.9 billion
Founded by candle maker William Procter and soap maker James Gamble, Proctor & Gamble (NYSE: PG) is a consumer products behemoth whose product portfolio spans everything from facial tissues to laundry detergent to feminine care to men’s grooming.
Why Are We Fans of PG?
- Unparalleled brand awareness is evident in its $83.93 billion revenue base, which gives it advantageous terms because retailers must stock its products
- Healthy operating margin of 25.2% shows it’s a well-run company with efficient processes
- PG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Procter & Gamble’s stock price of $155.30 implies a valuation ratio of 21.8x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Trump’s April 2024 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 5 Growth Stocks for this month. 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
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