The consumer staples sector is composed 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. Some of the big names in the sector include Procter & Gamble Co. (PG), Coca-Cola Co. (KO), and General Mills Inc. (GIS).
Consumer staples stocks, as represented by the benchmark Consumer Staples Select Sector SPDR ETF (XLP), have underperformed the broader market over the past year. XLP has provided investors with a total return of 21.2% over the past 12 months, well below the Russell 1000’s total return of 52.8%. These market performance numbers and all statistics in the tables below are as of April 20, 2021.
Here are the top 3 consumer staples stocks with the best value, the fastest growth, and the most momentum.
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.
| Best Value Consumer Staples Stocks | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing P/E Ratio | |
| Albertsons Companies Inc. ( ACI) |
20.31 | 9.5 | 9.9 |
| Graham Holdings Co. ( GHC) |
638.40 | 3.2 | 10.7 |
| Bunge Ltd. ( BG) |
81.31 | 11.5 | 10.7 |
Source: YCharts
- Albertsons Companies Inc.: Albertsons Companies is a grocery store company that operates food and drug retail stores. It offers grocery products, general merchandise, health and beauty care products, pharmacy, fuel, and other items and services.
- Graham Holdings Co.: Graham Holdings is a small conglomerate that offers educational services, newspaper print, online publishing, and television broadcasting, as well as owning several other assets, including auto dealerships, restaurants, and hospice care facilities. The company announced in early April that it had agreed to acquire consumer internet company Leaf Group Ltd. (LEAF) in an all-cash transaction valued at approximately $323 million. The transaction is expected to close in either June or July of 2021.
- Bunge Ltd.: Bunge is a global agribusiness and food company. It supplies and transports agricultural commodities, including sugar ethanol, wheat, and corn. The company also processes oilseeds and grains and sells fertilizers. Bunge announced in the first half of February financial results for its 2020 fiscal year (FY), which ended Dec. 31, 2020. The company reported annual net income of $1.1 billion compared to a net loss of $1.3 billion in FY 2019. Net sales for the year rose 3.9%. Bunge noted that it has so far not experienced any significant disruptions to its supply chain as a result of the COVID-19 pandemic. It is deemed an essential service in locations where government restrictions are in place to limit the spread of the virus.
These are the top consumer staples stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings per share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
| Fastest Growing Consumer Staples Stocks | ||||
|---|---|---|---|---|
| Price ($) | Market Cap ($B) | EPS Growth (%) | Revenue Growth (%) | |
| Flowers Foods Inc. ( FLO) |
24.36 | 5.2 | 2,500 | 11.5 |
| Chegg Inc. ( CHGG) |
90.94 | 12.9 | 200.0 | 63.9 |
| Boston Beer Co. Inc. ( SAM) |
1306.45 | 16.1 | 135.7 | 53.0 |
Source: YCharts
- Flowers Foods Inc.: Flowers Foods produces fresh packaged and frozen bakery products, including pastries, doughnuts, and bakery snack products. Some of its brands include Nature’s Own, Canyon Bakehouse, and Tastykake. The company announced in the first half of February full-year financial results for FY 2020, which ended Jan. 2, 2021. Net income for the year fell 7.4% despite a 6.4% rise in annual sales. A sizeable pension plan settlement and curtailment loss had a severe adverse impact on earnings for the year. Flowers Foods’ annual adjusted net income rose 36.1%.
- Chegg Inc.: Chegg offers online educational services, including homework help and course selection. It also sells products such as textbooks for rent and manuals.
- Boston Beer Co. Inc.: Boston Beer is a brewer engaged in the business of producing and selling craft-brewed beers and cider products at its own breweries and various other contract breweries.
These are the consumer staples stocks that had the highest total return over the last 12 months.
| Consumer Staples Stocks with the Most Momentum | |||
|---|---|---|---|
| Price ($) | Market Cap ($B) | 12-Month Trailing Total Return (%) | |
| Boston Beer Co. Inc. (SAM) | 1306.45 | 16.1 | 215.9 |
| Chegg Inc. (CHGG) | 90.94 | 12.9 | 149.7 |
| Spectrum Brands Holdings Inc. ( SPB) |
86.96 | 3.7 | 146.9 |
| Russell 1000 | N/A | N/A | 52.8 |
| Consumer Staples Select Sector SPDR ETF (XLP) | N/A | N/A | 21.2 |
Source: YCharts
- Boston Beer Co. Inc.: See above for company description.
- Chegg Inc.: See above for company description.
- Spectrum Brands Holdings Inc.: Spectrum Brands, the owner of brands such as Remington, Russell Hobbs, and Black+Decker, manufactures consumer products, including household appliances, batteries, pet supplies, personal care products, lawn and pest control, and portable lighting. The company recently announced that it has agreed to acquire For Life Products LLC, a manufacturer of household cleaning, maintenance, and restoration products sold under the brand name Rejuvenate. The transaction, which is valued at approximately $300 million, is expected to close in the first half of 2021.
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