The stock market often reflects broader economic trends. However, certain sectors like consumer staples tend to be more resistant to economic downturns. Recession-proof stocks, particularly in the consumer staples sector, include companies that produce or distribute essential goods. This includes items such as food, beverages, and household products. These stocks are attractive during economic slowdowns because demand for these goods remains stable, regardless of the economy’s overall health.
Investing in recession-proof stocks offers stability as these companies tend to have consistent revenue and earnings. This stability can lead to less volatility in stock prices and a reliable stream of dividends, which is appealing to risk-averse investors. However, the downside is that these stocks typically offer lower growth potential compared to cyclical sectors that thrive during economic booms. Additionally, because these stocks are known for their safety, they may be overvalued during periods of economic uncertainty, resulting in lower yields for investors.
Overall, buying recession-proof stocks in the consumer staples sector can be a prudent strategy for investors seeking to safeguard their portfolios against economic downturns. While they may not provide the high returns of more volatile stocks during boom periods, they offer protection and steady gains in challenging economic climates, making them a fundamental part of a diversified investment strategy. With this being said, let’s look at two consumer staples stocks to watch in the stock market now.
Recession-Proof Stocks To Buy [Or Sell] Today
Procter & Gamble Co. (PG Stock)
Starting us off, Procter & Gamble (PG), or P&G, is a leading multinational corporation specializing in a wide range of consumer goods. Its product categories include cleaning agents, personal care, and hygienic products. P&G’s well-known brands, such as Tide, Pampers, and Gillette, are staples in households around the world.
Last month, Procter & Gamble reported better-than-expected third-quarter 2024 financial results. Getting right into it, the company posted Q3 2024 earnings of $1.52 per share, with revenue of $20.20 billion for the quarter. This came in higher than analysts’ consensus estimates for the quarter which were earnings estimates of $1.42 per share, on revenue estimates of $20.51 billion.
In 2024 thus far, shares of PG stock have jumped higher by 11.50% YTD. Meanwhile, during Thursday’s afternoon trading session, Procter & Gamble stock is trading green up 0.47%, trading at $165.85 per share.
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Coca-Cola Company (KO Stock)
Next, Coca-Cola (KO) is a global leader in the beverage industry. The company offers a vast portfolio of drinks under various sub-brands including Sprite, Fanta, and its flagship Coca-Cola. The company operates a worldwide distribution system, the largest in the beverage industry, which allows it to serve customers in over 200 countries.
At the end of last month, the company announced a beat for its Q1 2024 financial results. Specifically, Coca-Cola reported an EPS of $0.72 versus estimates of $0.69. The company also notched in revenue for the quarter of $11.30 billion, versus estimates of $10.95 billion. Additionally, the company said it estimates 2024 earnings to be between $2.80 to $2.82 per share.
Year-to-date, Coca-Cola stock has increased by 5.42% so far. While on Thursday afternoon, shares of KO stock are trading higher up 0.31% on the day, currently trading at $63.06 a share.
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