The consumer staples sector comprises companies that produce and sell items essential for everyday use. Consumer staple stocks have been on investors’ radar for some time now, especially for those which have a strong e-commerce channel. Consumer staples include food and beverages, hygiene products, household goods, and items that people continue to consume during good or bad times. Therefore, these companies are less cyclical. They can maintain stability independent of the state of the economy. The big names in the sector include Coca-Cola Co. (KO Stock Report), and General Mills Inc. (GIS Stock Report), just to name a few.
With consumer behavior suddenly changing in such a big way, many consumer staples are proving to be valuable especially during the coronavirus pandemic. They are making a recovery, if they haven’t already recovered. In-store sales are still robust if not higher. After all, people will still need to stock up on food and drinks when they go to the supermarket. This means that some consumer companies can still continue to do well despite the pandemic.
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Beyond Meat (BYND Stock Report) was displaying a fair amount of relative strength on Thursday, although the late-day selloff weighed on its gains. With swine fever in Europe, the company continues to record high growth. Beyond Meat may be a provider of plant-based meat proxies for restaurants, but the major components of its revenue are generated through partnerships with restaurants and retailers like Starbucks (SBUX Stock Report) and Walmart, just to name a few. That approach quickly increased its exposure to mainstream consumers.
Beyond Meat’s plant-based supply chain is immune to the African swine fever. The stock was gaining yesterday. This came after reports of rival Impossible Foods facing issues in Chinese regulatory approval.
To put things in context, Beyond Meat is currently building plants in Shanghai. This, of course, also positions it well to profit if meat substitute demand goes higher given the lack of pork from Germany. For these reasons, BYND stock remains a top consumer staples stock to watch in the long run.Top Consumer Staples Stocks To Buy [Or Sell] Now: Walmart
It is impossible to have a list of consumer staples stocks to buy that doesn’t include Walmart (WMT Stock Report). The largest retailer company in the world posted its biggest earnings in 31 years last month. That may not have been surprising as consumers were spending their stimulus checks. The company leverages its physical stores and its e-commerce initiatives to deliver goods to customers during the pandemic.
The world’s largest retailer has seen online sales increase due to COVID-19-led social distancing measures. Considering online sales only consists of 8% of total sales for Walmart, more scale and profitability is needed to bring up profitability to the levels of Amazon (AMZN Stock Report) and Alibaba (BABA Stock Report).
As the company fought to gain more market share and be more appealing to Gen Z shoppers, the company was also bidding for TikTok in the hope of a more entertaining shopping experience. With the introduction of the new subscription services (same day deliveries), Walmart is in a stronger position to compete with its rivals. With all that in mind, WMT stock is one to look for in the long term.
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Procter & Gamble (PG Stock Report) saw near-record growth even before the pandemic. That’s thanks to efforts preparing the business for expansion. Those gains continued going up during the pandemic, pushing organic sales up 6% for the fiscal year.
Going forward, the business environment will likely see challenges including recessions, changing consumer trends, and rising competition. But as the industry leader in market share, operating profit margin, and manufacturing efficiency, P&G is arguably in the best position for that situation.
PG stock has jumped 0.96% while the S&P 500 has fallen -0.03% as of 3:18 PM on Friday, September 11th. The company’s stock price is higher by $1.31 from the previous closing price of $136.70. In the past year, the S&P 500 has spiked 10.92% while PG stock advanced by 12.41%.