We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Top 5 Consumer Staples Stocks to Buy Amid Recent Meltdown
Read MoreHide Full Article
Wall Street has been reeling under severe volatility since the beginning of this year after performing astonishingly in the previous two pandemic-ridden years. The anticipation of a tougher-than-expected stand by the Fed in March to combat soaring inflation and geopolitical conflicts between Russia and Ukraine has dented investors’ confidence significantly.
At this juncture, it will be prudent to stay invested with defensive stocks from the consumer staples sector as these are less volatile in the market’s downtrend. Five such stocks with a favorable Zacks Rank are Tyson Foods Inc. (TSN - Free Report) , Pilgrim's Pride Corp. (PPC - Free Report) , The Coca-Cola Co. (KO - Free Report) , The Hershey Co. (HSY - Free Report) and Brown-Forman Corp. (BF.B - Free Report) .
Wall Street Mayhem Continues
The Fed will raise the benchmark interest in March for the first time in three years. The consumer price index for January rose 7.5% year over year, leading a large section of economists and financial researchers to predict a 50 basis-point hike in the benchmark lending rate in March instead of the market’s expectation of a 25 basis-point hike.
Some investment bankers have also said that the central bank may raise the interest rate seven times this year with a magnitude of 25 basis points each time. Consequently, the yield on the benchmark 10-Year U.S. Treasury Note climbed more than 2% last week. The yield was 1.5% at the beginning of 2022.
The situation worsened after the White House warned on Feb 11 that Russia might enter the geographical territory of Ukraine soon. Any American still in Ukraine should leave “immediately,” the White House said.
On Feb 15, the Russian Ministry of Defense announced that some Russian military units had started returning to the barracks after completing the drills near the Ukraine border. However, on Feb 16, NATO told Russia that there was no evidence that its troops were moving back. Instead, NATO accused Russia of increasing the deployment of its forces near the Ukraine broader.
On Feb 18, President Joe Biden expressed his concern that Russia will attack Ukraine very soon. Per Biden “We have reason to believe the Russian forces are planning and intend to attack Ukraine in the coming week, in the coming days.”
Consequently, year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 6.2%, 8.8% and 13.4%, respectively. The small-cap benchmark, the Russell 2000 Index has plummeted 10.5% year to date.
Consumer Staples Immune to the Vagaries of Economic Cycle
The consumer staples sector is mature and fundamentally strong as demand for such services is generally immune to the changes in the economic cycle. The consumer staples sector includes companies that provide necessities and products for daily use. This makes the sector defensive in nature.
Therefore, this has always been a go-to place for investors, who want to play it safe during extreme market fluctuations irrespective of internal or external disturbances. Moreover, the sector is known for stability and visibility of its earnings and cash flows. Consequently, adding stocks from the consumer staples basket lends more stability to portfolios in an uncertain market condition.
Our Top Picks
We have narrowed our search to five consumer staples stocks with positive growth potential for 2022. These stocks have seen good earnings estimate revisions in the last 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
Tyson Foods has been gaining on strategic growth efforts, including its focus on protein-packed brands and capacity expansion endeavors. TSN is also benefiting from robust demand in its retail core business lines. Moreover, continued recovery in the foodservice channel is a driver.
Tyson Foods has undertaken a number of operational and supply chain efficiency programs to place itself better for the long run. In this regard, TSN is investing in capacity expansion and automation technology.
The Zacks Rank #1 Tyson Foods has an expected earnings growth rate of 2.9% for the current year (ending September 2022). The Zacks Consensus Estimate for next-year earnings improved 18.5% over the last 30 days.
Pilgrim's Pride is engaged in the production, processing, marketing and distribution of fresh, frozen, and value-added chicken products in the United States, the United Kingdom, Europe, and Mexico. PPC announced that overall domestic demand remained solid during 2021 in the U.S. market.
PPC’s foodservice business also witnessed improvements on the back of a sustained recovery in commercial and noncommercial segments. Apart from this, Pilgrim’s Pride continues to prioritize capital spending plans during 2022 to optimize product mix and solidify partnerships with key customers.
The Zacks Rank #1 Pilgrim’s Pride has an expected earnings growth rate of 16.2% for the current year. The Zacks Consensus Estimate for next-year earnings improved 3.9% over the last 30 days.
The Coca-Cola has benefited from its strategic transformation and ongoing recovery around the world. The top line of KO reflected gains from higher price and an increase in concentrate sales. Driven by the momentum in its business, The Coca-Cola lifted its guidance. KO is poised to gain from increasing investments in digital expansion.
The Zacks Rank #2 The Coca-Cola has an expected earnings growth rate of 6% for the current year. The Zacks Consensus Estimate for next-year earnings improved 1.2% over the last 30 days.
The Hershey continues to gain on recovery in away-from-home consumption. Robust at-home consumption has been also contributing to the upside of HSY. Solid consumer demand prompted Hershey to lift its net sales and earnings view.
The Zacks Rank #2 Hershey has an expected earnings growth rate of 9.9% for the current year. The Zacks Consensus Estimate for next-year earnings improved 3.3% over the last 30 days.
Brown-Forman reported sales growth in second-quarter fiscal 2022, driven by the reopening of the on-premise channel and the revival of tourism. Growth across regions and higher Travel Retail sales also aided the results of BF.B. The company provided an upbeat fiscal 2022 sales view.
The Zacks Rank #2 Brown-Forman has an expected earnings growth rate of 3.7% for the current year (ending April 2022). The Zacks Consensus Estimate for next-year earnings improved 0.6% over the last 30 days.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Top 5 Consumer Staples Stocks to Buy Amid Recent Meltdown
Wall Street has been reeling under severe volatility since the beginning of this year after performing astonishingly in the previous two pandemic-ridden years. The anticipation of a tougher-than-expected stand by the Fed in March to combat soaring inflation and geopolitical conflicts between Russia and Ukraine has dented investors’ confidence significantly.
At this juncture, it will be prudent to stay invested with defensive stocks from the consumer staples sector as these are less volatile in the market’s downtrend. Five such stocks with a favorable Zacks Rank are Tyson Foods Inc. (TSN - Free Report) , Pilgrim's Pride Corp. (PPC - Free Report) , The Coca-Cola Co. (KO - Free Report) , The Hershey Co. (HSY - Free Report) and Brown-Forman Corp. (BF.B - Free Report) .
Wall Street Mayhem Continues
The Fed will raise the benchmark interest in March for the first time in three years. The consumer price index for January rose 7.5% year over year, leading a large section of economists and financial researchers to predict a 50 basis-point hike in the benchmark lending rate in March instead of the market’s expectation of a 25 basis-point hike.
Some investment bankers have also said that the central bank may raise the interest rate seven times this year with a magnitude of 25 basis points each time. Consequently, the yield on the benchmark 10-Year U.S. Treasury Note climbed more than 2% last week. The yield was 1.5% at the beginning of 2022.
The situation worsened after the White House warned on Feb 11 that Russia might enter the geographical territory of Ukraine soon. Any American still in Ukraine should leave “immediately,” the White House said.
On Feb 15, the Russian Ministry of Defense announced that some Russian military units had started returning to the barracks after completing the drills near the Ukraine border. However, on Feb 16, NATO told Russia that there was no evidence that its troops were moving back. Instead, NATO accused Russia of increasing the deployment of its forces near the Ukraine broader.
On Feb 18, President Joe Biden expressed his concern that Russia will attack Ukraine very soon. Per Biden “We have reason to believe the Russian forces are planning and intend to attack Ukraine in the coming week, in the coming days.”
Consequently, year to date, the three major stock indexes — the Dow, the S&P 500 and the Nasdaq Composite — have tumbled 6.2%, 8.8% and 13.4%, respectively. The small-cap benchmark, the Russell 2000 Index has plummeted 10.5% year to date.
Consumer Staples Immune to the Vagaries of Economic Cycle
The consumer staples sector is mature and fundamentally strong as demand for such services is generally immune to the changes in the economic cycle. The consumer staples sector includes companies that provide necessities and products for daily use. This makes the sector defensive in nature.
Therefore, this has always been a go-to place for investors, who want to play it safe during extreme market fluctuations irrespective of internal or external disturbances. Moreover, the sector is known for stability and visibility of its earnings and cash flows. Consequently, adding stocks from the consumer staples basket lends more stability to portfolios in an uncertain market condition.
Our Top Picks
We have narrowed our search to five consumer staples stocks with positive growth potential for 2022. These stocks have seen good earnings estimate revisions in the last 30 days. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our five picks in the past three months.
Image Source: Zacks Investment Research
Tyson Foods has been gaining on strategic growth efforts, including its focus on protein-packed brands and capacity expansion endeavors. TSN is also benefiting from robust demand in its retail core business lines. Moreover, continued recovery in the foodservice channel is a driver.
Tyson Foods has undertaken a number of operational and supply chain efficiency programs to place itself better for the long run. In this regard, TSN is investing in capacity expansion and automation technology.
The Zacks Rank #1 Tyson Foods has an expected earnings growth rate of 2.9% for the current year (ending September 2022). The Zacks Consensus Estimate for next-year earnings improved 18.5% over the last 30 days.
Pilgrim's Pride is engaged in the production, processing, marketing and distribution of fresh, frozen, and value-added chicken products in the United States, the United Kingdom, Europe, and Mexico. PPC announced that overall domestic demand remained solid during 2021 in the U.S. market.
PPC’s foodservice business also witnessed improvements on the back of a sustained recovery in commercial and noncommercial segments. Apart from this, Pilgrim’s Pride continues to prioritize capital spending plans during 2022 to optimize product mix and solidify partnerships with key customers.
The Zacks Rank #1 Pilgrim’s Pride has an expected earnings growth rate of 16.2% for the current year. The Zacks Consensus Estimate for next-year earnings improved 3.9% over the last 30 days.
The Coca-Cola has benefited from its strategic transformation and ongoing recovery around the world. The top line of KO reflected gains from higher price and an increase in concentrate sales. Driven by the momentum in its business, The Coca-Cola lifted its guidance. KO is poised to gain from increasing investments in digital expansion.
The Zacks Rank #2 The Coca-Cola has an expected earnings growth rate of 6% for the current year. The Zacks Consensus Estimate for next-year earnings improved 1.2% over the last 30 days.
The Hershey continues to gain on recovery in away-from-home consumption. Robust at-home consumption has been also contributing to the upside of HSY. Solid consumer demand prompted Hershey to lift its net sales and earnings view.
The Zacks Rank #2 Hershey has an expected earnings growth rate of 9.9% for the current year. The Zacks Consensus Estimate for next-year earnings improved 3.3% over the last 30 days.
Brown-Forman reported sales growth in second-quarter fiscal 2022, driven by the reopening of the on-premise channel and the revival of tourism. Growth across regions and higher Travel Retail sales also aided the results of BF.B. The company provided an upbeat fiscal 2022 sales view.
The Zacks Rank #2 Brown-Forman has an expected earnings growth rate of 3.7% for the current year (ending April 2022). The Zacks Consensus Estimate for next-year earnings improved 0.6% over the last 30 days.