Do You Have These Consumer Staples Stocks On Your Watchlist?
Consumer staples stocks offer investors a nice blend of safety and growth potential in the stock market today. Whether you like it or not, we rely on these daily essentials to get going every day. From food and beverages to some of the home-care products, these are the products we buy regardless how the broader economy is performing. Since consumers buy these products regardless of economic cycles, these defensive names tend to be steady in both bullish and bearish markets.
With inflation coming in at 7.5% in January, you’re probably concerned about how it could impact your portfolio. That is causing some investors to be defensive to a certain degree. And that makes these consumer staples, as defensive stocks, worth considering in the stock market today. However, just because inflation is red hot right now doesn’t mean you should be running for the hills. Instead, look for those that can pass on higher costs to consumers. This way, these consumer staples names could continue to benefit.
An example of a consumer staple stock doing well right now could be BJ’s Wholesale Club (NYSE: BJ). Late last month, it announced that it will be acquiring the assets and operations from its longtime partner Burris Logistics. This acquisition includes four distribution centers and a private transport fleet. Ultimately, this will help BJ scale and expand its supply chain capabilities. Elsewhere, Yum! Brands (NYSE: YUM), the parent company of KFC and Taco Bell, also reported strong quarterly results earlier this Wednesday. With all these in mind, here are four consumer staples stocks to check out in the stock market today.
Best Consumer Staples Stocks To Invest [Or Avoid] In 2022
- The Coca-Cola Company (NYSE: KO)
- PepsiCo Inc. (NASDAQ: PEP)
- Kellogg Company (NYSE: K)
- McCormick & Company (NYSE: MKC)
Coca-Cola
Coca-Cola is a beverage company which sells its products in more than 200 countries and territories. Its multiple billion-dollar brands are spread across several beverage categories worldwide. Namely, these include soft drink brands such as Coca-Cola, Sprite, and Fanta to name a few. Besides soft drinks, the company also offers sports, coffee, and tea brands. For a sense of scale, the company has more than 700,000 employees across the globe. Yesterday, the company released its fourth-quarter and full-year results for 2021.
Diving in, Coca-Cola’s revenue and earnings both topped Wall Street estimates. Accordingly, quarterly revenues grew by 10% to $9.46 billion from last year’s $8.61million. Net income for the quarter came in at $2.41 billion, up by an impressive 65% year-over-year from $1.46 billion. Accordingly, earnings per share were $0.56 in comparison with last year’s $0.34. Financials aside, Wells Fargo (NYSE: WFC) analyst Chris Carey reiterated his Overweight rating on KO stock. The analyst believes that momentum could continue due to strong top line performance driven by higher pricing and mix delivery. Given the strong quarter from Coca-Cola, will you be buying KO stock?
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PepsiCo
Another top name in the consumer staples sector is PepsiCo. By and large, most of us would be familiar with global food company’s offerings. This ranges from its famous beverage lines such as Pepsi-Cola and Gatorade to food brands like Frito-Lay and Quaker. In fact, the company estimates that its products are consumed over a billion times a day across more than 200 countries worldwide. Given the impressive market reach of PepsiCo, I could see why investors may be eyeing PEP stock.
Looking at PepsiCo’s freshly released fourth-quarter earnings, its net revenue came in at about $25.25 billion. Up by 12.4% compared to last year’s $22.46 billion and exceeding analyst estimates by $1 billion. Moving onto the company’s profits, earnings per share came in at $0.95 on $1.32 billion worth of net income. Besides that, Pepsi said it expects organic revenue growth of 6% for 2022. As for its earnings outlook, the company is projecting earnings of $6.67 per share for the full year. All things considered, do you think PEP stock is worth buying?
Kellogg’s
Kellogg’s is a manufacturer and marketer of ready-to-eat cereals and convenience foods. Its principal products are snacks ranging from crackers, cereals, frozen waffles, to noodles. You may know its products through brands such as Kellogg’s Corn Flakes, Cheez-It, Pringles and many more. Looking at its market reach, Kellogg’s distributes its product to more than 180 countries around the world. The company released its full-year results yesterday that were consistent with its guidance across all metrics.
For starters, net sales for the year was $14.18 billion, up by 3% year-over-year. The company attributes this increase to a positive price/mix in all four of its operating regions. Alongside that, earnings per share came in at $4.33 for the year. This is an increase of 19.3% from last year’s $3.63. Notably, the earnings were driven primarily to a favorable mark-to-market gain. For 2022, Kellogg’s expects net sales to grow by 3% and earnings per share to grow by 1% to 2%. CEO Steve Cahillane said, “We enter 2022 with growth momentum, financial flexibility from strong cash flow and balance sheet, and enhanced capabilities that will continue to enable us to manage through challenging business conditions.” Given the positive outlook, does K stock have a spot on your watchlist?
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McCormick
Summing up our list of consumer staples stocks for today is McCormick, a food company that manufactures, markets, and distributes flavoring products. These include spices, seasoning mixes and condiments among others. McCormick primarily sells to retail outlets, food manufacturers, and foodservice businesses. Additionally, its products are available in many countries. As a matter of fact, it is the largest producer of spices and related food products worldwide, based on revenue.
Last month, McCormick reported its full-year fiscal 2021 earnings. Getting into it, revenue rose by 13% in 2021 compared to 2020. Sales were driven by strong growth in both the Consumer and Flavor Solutions segments. Moreover, adjusted earnings per share increased to $3.05 against $2.83 from the year before. McCormick also provided its 2022 guidance. For its sales, the company expects an increase of 3% to 5%. Meanwhile, for its earnings per share, McCormick forecasts that figure to range from $3.17 to $3.22. With that being said, will you be watching MKC stock?
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