Are These The Best Consumer Staples Stocks To Have On Your Watchlist?
Throughout the pandemic, the consumer staples industry has and continues to supply the masses stuck at home with their daily necessities. As a result, the top consumer staples stocks performed rather well throughout 2020. You may be wondering, what exactly are consumer staples stocks? In a nutshell, consumer staples are companies that produce and sell items considered essential for everyday use. Thus, making the industry non-cyclical and mostly stable even amidst a pandemic. For investors, this group of stocks provides more defensive options in times of uncertainty.
For instance, we could look at the likes of Chipotle (NYSE: CMG) who is in the food-delivery business. Such companies benefited from pandemic tailwinds as more people depended on food delivery services. Now, CMG stock is looking at gains of over 190% since the pandemic hit last March. At the same time, analysts and consumers alike were quick to flock to Costco (NASDAQ: COST). The company’s wholesale operations were the perfect place for panicking consumers to get all their daily essentials at a bargain. Regardless, people will likely continue to rely on the consumer staples industry even in a post-pandemic world. If the recent volatility in the higher growth sectors have you looking for more stable options, consider these consumer staple players.
4 Top Consumer Staples Stocks To Watch
- Sprouts Farmers Market Inc. (NASDAQ: SFM)
- Beyond Meat Inc. (NASDAQ: BYND)
- PepsiCo Inc. (NASDAQ: PEP)
- General Mills Inc. (NYSE: GIS)
Sprouts Farmers Market Inc.
Starting us off is supermarket chain Sprouts. The Arizona-based company operates out of 360 stores in 23 states across the U.S. To summarize, the company offers a wide selection of natural and organic foods in its stores. For consumers looking to eat healthier after all the take-out, Sprouts would make for a convenient one-stop location to fulfill such needs. Similarly, I could see investors turning to SFM stock today as it reported its latest earnings after yesterday’s closing bell.
In its fourth-quarter fiscal, Sprouts reported net sales of $1.6 billion for the quarter, marking a 17% year-over-year increase. On top of that, the company more than doubled its net income over the same period. To investors’ delight, Sprout also saw a 114% year-over-year surge in earnings per share as well. Above all, the company generated record earnings and cash flow in the quarter.
CEO Jack Sinclair noted two key factors for Sprouts’ growth throughout fiscal 2020. Firstly, the company saw a 340% increase in e-commerce sales which is understandable as shoppers stayed home throughout the pandemic. Next, Sprout opened 22 new stores in 2020 despite all the chaos brought on by the pandemic as well. Given its current momentum, do you think SFM stock is worth investing in?
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Beyond Meat Inc.
Another top consumer staple company making waves now would be Beyond Meat. The company is a major player in the plant-based meat substitute industry. In brief, its core products taste and look like meat but are made from natural plant alternatives. This would appeal to vegans, environmentally conscious consumers, and others who are looking for alternatives to conventional meat. Likewise, investors appear to be hungry for BYND stock as it is up by over 150% since the March 2020 lows. Given its two latest deals, you might be interested to keep a close eye on it as well.
Diving right into it, Beyond Meat is making huge strides in the global fast-food market. Yesterday, it announced global strategic partnerships with fast-food titans McDonald’s (NYSE: MCD) and Yum! Brands (NYSE: YUM). For starters, Beyond Meat signed a three-year global supplier agreement with McDonald’s. Through this deal, the company will be supplying plant-based patties for McDonald’s McPlant burgers.
Additionally, Beyond Meat will also work on co-developing other plant-based menu items for McDonald’s. In the same way, the company will be helping Yum! Brands co-create innovative plant-based protein menu items. This would be huge for Beyond Meat given that Yum! Brands own the likes of KFC, Pizza Hut, and Taco Bell. With the company firing on all cylinders, will you be adding BYND stock to your portfolio?
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Next, we have consumer staples juggernaut, PepsiCo. For the uninitiated, the company is one the largest snack food and beverage manufacturers in the world. Its world-class portfolio includes the likes of Frito-Lay, Pepsi-Cola, Gatorade, and Quaker brands. According to PepsiCo’s estimates, each of its 23 brands generates over $1 billion each in annual retail sales. Overall, this added up to the company’s $70 billion in net revenue in 2020. Despite its massive operations, PepsiCo does not seem to be slowing down anytime soon.
Earlier this week, the company launched two new beverage lines. On Tuesday, PepsiCo launched Frutly, a hydrating juice water designed for teenagers. This addition to its beverage portfolio is supposedly made through a combination of fruit juice, electrolytes, and vitamins C and E. This would make for a healthier alternative to conventional sodas.
For the older crowd, PepsiCo also revealed a new line of non-alcoholic cocktail mixers in the form of Neon Zebra. Coming in a variety of flavors, Neon Zebra offers consumers a quick and easy way to mix cocktails at home. With PepsiCo catering to audiences of all ages, could PEP stock be a good investment at its current valuation? I’ll let you decide.
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General Mills Inc.
Last but not least, we will be looking at global food company General Mills. For some context, General Mills has a massive portfolio filled with products ranging from cereals, yogurts, and desserts to granola bars, frozen meals, and even baking products. Notably, the multinational food manufacturer is the brains behind several global household names such as Cheerios, Häagen-Dazs, and Nature Valley. In 2020, the company generated net sales of over $17.6 billion. Given its impressive array of products, it would not surprise me if investors are watching GIS stock now. This would especially be the case as it just set the date for its third-quarter earnings call for March 24.
For investors, there has been no shortage of news and updates from General Mills this month. Just last week, the company revealed its “Accelerate” Growth Strategy at the 2021 Consumer Analyst Group of New York conference. Essentially, the company highlighted brand building, big data analytics, and relentless innovation as key points of focus in its strategy.
The day after that, General Mills launched its massive St. Patrick’s Day campaign, a month before the annual celebration. In fact, it is partnering with the likes of Hasbro (NASDAQ: HAS) and Crocs (NASDAQ: CROX) to promote its Lucky Charms cereal in a variety of ways through this campaign. Would all this make GIS stock a buy? You tell me.