Consumer staples provide stability during economic downturns, as demand for essential goods holds steady regardless of economic conditions. Consequently, investing in fundamentally strong consumer staples stocks may be a prudent choice for investors. These stocks have low beta values, which provide stability amid shifting market dynamics.
Investing in quality consumer staples stocks like Procter & Gamble (PG), Colgate-Palmolive (CL), and Kimberly-Clark (KMB) could be a wise choice for investors. With low beta values, these stocks offer stability even as market conditions fluctuate.
The Dow and S&P 500 rose slightly on Wednesday, while the Nasdaq declined as October CPI data aligned with forecasts, reinforcing expectations of a potential Fed rate cut in December. The CPI rose 0.2% monthly and 2.6% annually, meeting expectations.
Amid such volatility in the broader market, consumer staples provide a resilient anchor, as demand for essential goods remains unwavering and unaffected by financial shifts. These stocks not only exhibit lower volatility but also frequently offer dividends, making them a prudent refuge for investors seeking stability and reliable income amid market uncertainty.
Further, the University of Michigan’s consumer sentiment index declined in October to 68.9, down from 70.1 in September, reflecting renewed consumer concerns about high prices. Despite these concerns, consumer spending has stayed strong, with economic growth estimated at 3.2% for Q3.
Considering these conducive trends, let’s examine the Consumer Goods stocks in detail.
Stock #3: The Procter & Gamble Company (PG)
PG provides a wide range of packaged consumer goods for personal care, health, home, and family needs. Their products, including beauty items, grooming essentials, health care solutions, and household supplies, cater to consumers worldwide through various retail and e-commerce channels.
On October 28th, 2024, PG declared a quarterly dividend of $1.0065 per share, payable on November 15, 2024. It pays an annual dividend of $4.03, which translates to a dividend yield of 2.40% at the prevailing price levels.
During the fiscal first quarter that ended September 30, 2024, PG’s total net sales were $21.74 billion. Its operating income grew marginally from the year-ago value to $5.80 billion. In addition, net earnings attributable to Procter & Gamble and net earnings per common share came in at $3.96 billion and $1.6, respectively.
Analysts expect PG’s EPS and revenue for the second quarter ending December 31, 2024, to increase 3% and 1.6% year-over-year to $1.89 and $21.79 billion, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters, which is promising.
Over the past year, the stock has gained 9.3% to close the last trading session at $166.58. It soared 13.7% year-to-date. It has a 24-month beta of 0.24.
PG’s POWR Ratings reflect its robust outlook. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
PG has a B grade in Stability and Quality. It is ranked #22 out of 55 stocks in the Consumer Goods industry.
Beyond what we have stated above, we also have given PG grades for Growth, Value, Momentum, and Sentiment. Get all the PG’s ratings here.
Stock #2: Colgate-Palmolive Company (CL)
CL manufactures and markets a wide range of consumer products globally in oral, personal, and home care, along with pet nutrition. Key brands like Colgate, Palmolive, Softsoap, and Hill's cater to everyday needs across traditional retail, eCommerce, and professional channels for both human and pet care.
On September 12, CL declared a quarterly dividend of $0.50 per share, payable on November 15, 2024, to shareholders on record as of October 18, 2024. It pays an annual dividend of $2.00, which translates to a dividend yield of 2.20% at the prevailing price levels.
In the fiscal third quarter ended September 30, 2024, CL’s total net sales increased 2.4% year-over-year to $5.03 billion. Its non-GAAP operating profit was $1.08 billion, up 4.8% from the year-ago value. Moreover, non-GAAP net income attributable to Colgate-Palmolive Company stood at $750 million and $0.91 per share, respectively, representing increases of 5.6% and 5.8% over the prior year quarter.
Street expects CL’s revenue and EPS for the quarter ending December 31, 2024, to increase 2% and 3.5% year-over-year to $5.05 billion and 0.90, respectively. It surpassed the consensus EPS and revenue estimates in all trailing four quarters.
The stock has gained 14.3% year-to-date and delivered a 19.9% return over the past year, closing the last trading session at $91.07. Its 24-month beta stands at 0.24.
CL’s POWR Ratings reflect strong prospects. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.
It has an A grade for Quality and a B for Stability. It is ranked #18 in the same industry.
To access CL’s Growth, Momentum, Sentiment, and Value ratings, click here.
Stock #1: Kimberly-Clark Corporation (KMB)
KMB produces a range of personal care, consumer tissue, and professional products, including diapers, tissues, wipes, and personal protective equipment, under brands like Huggies, Kleenex, and Scott. Its products serve consumers and businesses alike through various retail, e-commerce, and other professional channels.
It pays an annual dividend of $4.88, which translates to a dividend yield of 3.70% at the prevailing price levels.
KMB posted total net sales of $4.95 billion in the fiscal 2024 third quarter that ended September 30, 2024. Its operating profit grew by 49.1% from the year-ago value to $1.15 billion. Its non-GAAP net income attributable to Kimberly-Clark Corporation and EPS stood at $617 million and $1.83, respectively, representing increases of 5.1% and 5.2% over the prior-year quarter.
Street expects KMB’s EPS for the fiscal year (ending December 31, 2024) to increase 7.2% year-over-year to $7.32. Its revenue for the same period is expected to amount to $20.01 billion. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters.
Shares of KMB have gained 9.1% over the past year and 8.8% year-to-date to close the last trading session at $132.19. It has a 24-month beta of 0.29.
KMB’s bright prospects are apparent in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
It has a B grade for Value and Quality. Within the same industry, it is ranked #13.
Click here to see KMB’s ratings for Growth, Momentum, Sentiment, and Stability.
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PG shares rose $0.53 (+0.32%) in premarket trading Thursday. Year-to-date, PG has gained 16.51%, versus a 26.83% rise in the benchmark S&P 500 index during the same period.
About the Author: Kritika Sarmah
Her interest in risky instruments and passion for writing made Kritika an analyst and financial journalist. She earned her bachelor's degree in commerce and is currently pursuing the CFA program. With her fundamental approach, she aims to help investors identify untapped investment opportunities.
3 Consumer Staples Stocks for Stability in Volatile Markets StockNews.com
