Should Investors Be Buying These Top Consumer Staples Stocks Today?
Even as the economic recovery seems to be well underway, consumer staples stocks remain viable plays in the stock market. As the name suggests, these companies provide consumers with staple goods. These include household necessities such as food, cleaning supplies, and other items that are consumed or used regularly. In this group of stocks, you have restaurant stocks, grocery retailers, and consumer goods companies to consider.
For the most part, the industry mostly consists of home brands such as Coca-Cola (NYSE: KO). While these firms may not post the most explosive gains, investors appear to be eyeing the industry, nonetheless. Regarding explosive gains, the likes of Sweetgreen appear to be breaking the mold in the stock market today. After all, consumers have and will likely continue to rely on the industry in the long run. This, in turn, could translate to more stable business cycles for the more established names in the field. For investors looking to make more defensive plays, consumer staples stocks could be worth considering.
At the same time, the industry does not seem to be sitting idly by now. Fast-food firms like McDonald’s (NYSE: MCD) and Wendy’s (NASDAQ: WEN) are such examples. On one hand, McDonald’s continues to see strong demand for its offerings even after raising menu prices. In its latest fiscal quarter report, the company posted an earnings per share of $2.76 on revenue of $6.2 billion. It handily beat consensus estimates on both fronts. Additionally, Wendy’s recently opened its 1,000th international restaurant in the U.K. All things considered, it would not surprise me to see investors keen on these top consumer staples stocks around now.
Top Consumer Staples Stocks To Buy [Or Sell] In November
- Sweetgreen Inc. (NYSE: SG)
- Starbucks Corporation (NASDAQ: SBUX)
- BJ’s Wholesale Club Holdings Inc. (NYSE: BJ)
Sweetgreen
As mentioned earlier, a key highlight among consumer staples stocks today would be Sweetgreen. In brief, it is a fast-casual restaurant chain operator. The company primarily serves salads. Through Sweetgreen, consumers have access to a wide variety of highly customizable salads. All of which can be ordered in-person or via the company’s mobile app. Moreover, Sweetgreen also provides seasonal menu items to consumers, selling fresh produce at its peak ripeness throughout the year.
More importantly, the company went public via an initial public offering (IPO) yesterday. It now trades under the ticker “SG” on the New York Stock Exchange. Notably, SG stock soared by 76% during intraday trading Thursday. In detail, Sweetgreen priced its IPO at $28 a share. After opening at $52 a share, the company’s market value soared over the $5.5 billion mark. Evidently, SG stock appears to be a hot pick among investors in the current IPO market.
In theory, the company’s business would make sense given the current health trends among consumer markets. By appealing to those looking for healthy yet convenient meal solutions, Sweetgreen could see further growth. CEO Jonathan Neman also said, “We like to say we want to build the McDonald’s of our generation.” As Sweetgreen looks to redefine the fast-food scene, could SG stock be a buy for you?
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Starbucks
Following that, we have the leading coffeehouse operator in the world, Starbucks. Through its global network of almost 34,000 stores, the company serves high-quality arabica coffee to its customers. The likes of which continue to flock to Starbucks even amidst the pandemic given the company’s latest quarterly figures. In essence, Starbucks posted record revenue in its fourth fiscal quarter report last month. Furthermore, the company also saw both its net income and earnings per share skyrocket by over 335% year-over-year. If all that wasn’t enough, the company also declared a quarterly cash dividend of $0.49 a share earlier this week.
Even so, Starbucks continues to find new ways to adapt to the current pandemic. Namely, the coffeehouse titan is now teaming up with Amazon (NASDAQ: AMZN) to provide cashierless experiences to customers. Through this partnership, Starbucks now has access to Amazon Go, Amazon’s fully autonomous checkout tech. As of yesterday, Starbucks now has a first-of-its-kind pick-up café in midtown Manhattan. Also, the duo are planning to grow this number further over the next year.
By and large, the deal serves to benefit both Starbucks and Amazon. On one hand, Starbucks can provide customers with a more seamless and contactless experience at its future locations. On the other hand, this could incentivize more sign-ups to Amazon’s Amazon One subscription which allows for customers to pay for items using their palms via this system. Alternatively, there are also numerous in-store means of paying with various cards and codes. Given Starbucks’ current momentum, will you be investing in SBUX stock?
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BJ’s Wholesale Club
Last but definitely not least is BJ’s Wholesale Club or BJ’s for short. Overall, BJ’s is a membership-only warehouse club chain operator. For consumers that sign up for a BJ’s membership, the company offers a vast array of high-quality curated products. The likes of which can all be bought at wholesale value, “consistently offering 25% or more savings on a representative basket of manufacturer-branded groceries”, according to BJ’s. With BJ’s offering wholesale purchases at affordable prices, I can understand the appeal from both consumers’ and investors’ perspectives.
Speaking of investor interest in the company, BJ stock ended yesterday’s trading session up by over 19%. Naturally, this would be thanks to the company posting stellar figures in its third-quarter earnings call yesterday. In it, BJ’s reported an earnings per share of $0.91 on revenue of $4.26 billion for the quarter. For comparison, Wall Street was expecting earnings of $0.80 on revenue of $3.92 billion.
All in all, CEO Bob Eddy had this to say, “Our business accelerated during Q3 on broad-based strength, and we saw growth in all of our divisions, with acceleration in traffic and ticket, growth in digitally-enabled sales and conventional sales, all underpinned by strong membership statistics in both new and tenured members. Our growth flywheel is spinning faster than it has in a long time, and we look forward to continue building on that momentum.” With BJ’s seemingly kicking into high gear across the board now, would you consider adding BJ stock to your watchlist?
