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The consumer staples sector is comprised of companies that produce and sell items considered essential for everyday use. Consumer staples products include household goods, food, beverages, hygiene products, and other items that individuals are either unwilling or unable to eliminate from their budgets even in times of financial trouble. As a result, these companies are viewed as non-cyclical and able to maintain stable growth regardless of the state of the economy. The big names in the sector include Procter & Gamble Co. (PG), Coca-Cola Co. (KO), and General Mills Inc. (GIS), among others.
Consumer Staples stocks, represented by the Consumer Staples Select Sector SPDR ETF (XLP), have underperformed the broader market, providing investors with a total return of 9.9% compared to the Russell 1000’s total return of 20.6% over the past 12 months. These market performance numbers are as of December 16 and the statistics in the tables below are as of December 17.
Here are the top 3 consumer staples stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Consumer Staples Stocks
These are the consumer staples stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
Source: YCharts
- Albertsons Companies Inc.: Albertsons Companies operates grocery and drug stores throughout the U.S.
- Campbell Soup Co.: Campbell Soup manufactures and markets food and beverage products, including Prego pasta sauces, Pace Mexican sauces, Kettle Brand potato chips, Emerald nuts, V8 juices, and more. In Q1 FY 2021 ended November 1, Campbell reported a 7.2% year-over-year (YOY) increase in net sales and an 86.1% YOY surge in net earnings. Much of the performance can be attributed to strong sales in the company’s soup, broths, and pasta sauce products.
- The Kroger Co.: The Kroger Co. owns and operates a chain of supermarkets and convenience stores throughout the U.S., and also manufactures some of the foods available in its stores. Kroger reported in early December that its 3Q 2020 net income soared as sales rose 6.3% YOY and as digital sales more than doubled. Kroger also raised its full-year 2020 guidance.
Fastest Growing Consumer Staples Stocks
These are the consumer staples stocks with the highest YOY EPS growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
Source: YCharts
- Coty Inc.: Coty is a maker and distributor of beauty products. The company’s products include color cosmetics, hygiene products, fragrances, sun care products, and skin treatments. Coty products are sold in department stores, retailers, and airport duty free shops around the world. Coty in November sold a majority stake in its Professional and Retail Hair business for about $2.5 billion to KKR & Co. Inc. (KKR).
- Grocery Outlet Holding Corp.: Grocery Outlet Holding Corp. owns and operates grocery stores throughout the U.S. For Q3 2020, the company reported that same store sales rose 9.1% and net sales increased 17.1% YOY. This fueled a 225.2% YOY gain in net income. Grocery Outlet opened 10 new stores during the quarter.
- The Kroger Co.: See company description above.
Consumer Staples Stocks with the Most Momentum
These are the consumer staples stocks that had the highest total return over the last 12 months.
| Consumer Staples Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Boston Beer Co. Inc. (SAM) | 954.50 | 11.7 | 154.0 |
| Chegg Inc. (CHGG) | 87.02 | 11.2 | 126.9 |
| Beyond Meat Inc. (BYND) | 139.37 | 8.7 | 89.4 |
| Russell 1000 | N/A | N/A | 20.6 |
| Consumer Staples Select Sector SPDR ETF (XLP) | N/A | N/A | 9.9 |
Source: YCharts
- Boston Beer Co. Inc.: Boston Beer Co. produces craft-brewed beers and ciders, both through its own breweries and through contracts with outside breweries. Among the company’s most popular brands are Samuel Adams, Oregon Beer and Brewing, and HardCore.
- Chegg Inc.: Chegg offers online educational services including homework help, and course selection. It also sells products including textbooks for rent and manuals.
- Beyond Meat Inc.: Beyond Meat develops plant-based protein food products including burgers, sausage, strips, and crumbles. In November, the company unveiled the latest offerings of its flagship Beyond Burger products, which feature improved nutrition and more choices. They are expected to be on the market in early 2021.
