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In this article, we discuss 13 best consumer staples dividend stocks to buy now. You can skip our detailed analysis of the consumer staples sector, its performance, and outlook for 2024, and go directly to read 5 Best Consumer Staples Dividend Stocks To Buy Now. In most cases, it’s more advantageous to invest in an index fund for consumer staples rather than buying individual stocks in the consumer sector. While index funds have the drawbacks of management fees and expense ratios, they provide investors with an instant level of diversification for their portfolios.

Food safety regulations aim to prevent foodborne illnesses by setting standards for food processing, storage and transportation. As an investor, it’s crucial that you understand and monitor the changing landscape of the regulatory secretary. An exchange-traded fund (or ETF) is a collection of stocks that trade together as a single unit, usually to mimic the overall performance of a particular index or consumer sector. Some examples of ETFs geared toward consumer staples include the Invesco DWA Consumer Staples Momentum ETF and the Vanguard Consumer Staples Index Fund ETF. You can also invest in an ETF that tracks the performance of international consumer goods, including the Global X MSCI China Consumer Staples ETF.

The Motley Fool reaches millions of people every month through our premium investing solutions, free guidance and market analysis on Fool.com, top-rated podcasts, and non-profit The Motley Fool Foundation. It might not be the most exciting portfolio, but owning various types of assets whose cash flows closely mirror nominal GDP and spending patterns can be a good strategy. For example, you can take variations in the employment rate as a proxy for falls in income.

  1. There are also futures dedicated to the sector, which can provide access at lower capital requirements, such as IXR (Globex).
  2. That volatility will be enhanced by buying a smaller selection of individual stocks.
  3. That’s because trends in the beauty business, which are subject to broader fashion tastes, tend to change more quickly and attract smaller brands.

That’s why we pay very close attention to this often-ignored indicator. In 2020, as stock markets plunged due to COVID-19 fears, consumer staple index funds remained relatively steady with returns in line with prior years. Still, they underperformed relative to U.S stocks overall by about 2%. The table below introduces 10 consumer staples stocks that can add value to your portfolio in 2024. Speaking of inflation, that has been the headlining story in consumer staples over the last two years.

Historically, the consumer staples sector has been considered a defensive sector, which means that stocks in this sector typically lose less value than the overall market during recessions and depressions. People buy staples in boom times and in bust times, which makes consumer staples stocks good performers no matter what’s happening in the broader economy. That’s why they’re often considered defensive safe havens during a recession. More importantly, the consumer staples sector has outperformed the S&P 500 during the last three recessionary periods—or periods of negative growth in the gross domestic product (GDP). Due to their low volatility, consumer staples stocks are considered to play a key role in defensive strategies.

People love their frozen French fries, enough to keep buying despite price increases. Over the past year, LW has more than offset cost inflation through pricing actions. Constellation Brands sells beer, wine and spirits under the brand names Corona, Modelo, Robert Mondavi Winery, Kim Crawford, Svedka and others. Customers are wholesalers, retailers and state alcohol control agencies. For the quarter ending September 3, 2023, Costco reported a 9.4% increase in sales to $77.43 billion. Both metrics are relative to the year-ago quarter, which was one week shorter.

Costco operates Costco.com and membership warehouse stores domestically and abroad. The company also sells private-label merchandise and operates gas stations, pharmacies, optical centers and tire installation centers. Discount retailer Dollar General (DG) recently confirmed those spending pressures among its customer base. The company also predicted household budget constraints would continue into next year.

Partnerships are not a recommendation for you to invest with any one company. Since then, KO has grown into a behemoth in the beverage industry and has spurred massive growth in the Atlanta region by investing incredible sums back into the community. Among other achievements, the company pioneered vertical integration by buying out its early bottlers, minting a number of millionaires in the process. Nestle operates in nearly 200 countries, employs over 330,000 people and operates over 400 factories. The company is also one of the biggest shareholders of L’Oreal, another company on our list.

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The company has been transparent and disciplined in its use of that cash. Stated priorities are leverage reduction, organic investments and shareholder returns. KDP sells Keurig-branded coffee makers and related products, packaged beverages and beverage concentrates in the U.S. and abroad.

What is the best consumer staples ETF?

As consumer demand grows for ESG compliant companies, more investors are performing fundamental analysis to determine viability in a changing consumer world. This is especially important for investors looking to invest in companies producing alcohol or nicotine products, which have been at the forefront of changing regulations. If your choose to invest in these sectors, monitor your investments closely to determine what impact regulation changes will have on your portfolio stability. Researching the consumer staples sector requires ongoing investigation and a long-term eye toward investments. Consider consulting with a financial professional before choosing how to invest in the consumer staples market. Start by making a list of the companies that operate in the consumer staples sector or viewing a pre-compiled list like this one by MarketBeat.

The Makeup of the Consumer Staples Sector

Moving averages identify trends, with an upward trend indicating a positive trajectory. The RSI measures the speed and magnitude of price movements, providing insights into potential overbought or oversold conditions. The concept of a “moat,” a sustainable competitive advantage protecting a company from rivals, becomes essential when evaluating https://bigbostrade.com/ a corporation’s commitment to sustainability. This commitment can be viewed as a unique moat, safeguarding its market position. For DIY investors, you can use Syfe Trade to invest in specific stocks and ETFs. From now to 31 March 2022, you get to enjoy 5 free trades and super low commissions of US$0.99 per trade thereafter.

Among the best positioned for 2024 may be household products companies, due to sticky pricing, positive trends on sales volumes, and earnings flexibility. I believe that companies with attractive valuations and strong pricing power may offer the strongest returns potential for 2024. Companies that can raise prices or hold them steady may be more likely to meet their profit-margin forecasts. And companies that have invested gains in advertising and long-term brand building may have an added tailwind.

What Are Consumer Staples?

Two examples include the Walmart+ membership program and the ongoing integration of online and in-store shopping. In the third quarter of this year, Walmart reported year-over-year como invertir en amazon revenue growth of 4.3% in constant currency. Walmart (WMT) is also seeing spending pattern changes—specifically related to Ozempic and other weight-loss drugs.

Sports hydration, energy drinks and ready-to-drink coffee should be growth drivers for KDP going forward, both internationally and abroad. The company is investing heavily in innovation, advertising and brand-building—a strategy that’s starting to bear fruit. Solid results in this fiscal year prompted the company to increase its full-year growth guidance, which is now 6% to 8%. It’s also comforting to know that Mondelez has outperformed analysts’ revenue and EPS expectations in every quarter since early 2022. That speaks to the company’s business visibility and operating performance. Relative to other packaged foods, snacks face less competition from private brands.

Firms that boosted promotional and advertising spending in 2023 may have an added tailwind. Meanwhile, valuations in the sector have looked compelling versus the broader market and versus sector history. Any decline in interest rates could also boost the attractiveness of dividend-paying stocks. The largest consumer staples companies have been in business for decades, some for even more than a century.