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Top Consumer Staples Stocks To Watch In May 2021

It wouldn’t hurt to add these defensive names to your portfolio with the stock market still struggling to gain a strong foothold.

consumer staples stocks

Are These The Best Stocks To Buy In The Stock Market Today?

Consumer staples stocks offer investors a nice blend of safety and growth potential in the stock market today. Whether you think about it or not, you probably rely on consumer staples every day. Consumer staples stocks, made up of companies selling things like packaged food and household products, tend to be recession-proof. Over the past year, they have demonstrated their resilience over and over again. Consumers flocked to supermarkets to stockpile cleaning products, food, and toilet paper when the pandemic hit, while most other industries suffered.

With consumer behavior suddenly changing in such a big way, many consumer staples are proving to be valuable especially during the coronavirus pandemic. After all, people will still need to stock up on food and drinks when they go to the supermarket. This means that some consumer companies can still continue to do well whether there is a pandemic or not. With all that being said, doesn’t it make sense to prepare a list of top consumer staples stocks to buy in the stock market right now?

Top Consumer Staples Stocks To Consider Buying Now

Target

First up, Target is a retail corporation that is one of the largest retailers in the U.S. The company has stores in all 50 U.S. states and employs over 350,000 team members. It claims that 75% of the U.S. population lives within 10 miles of a Target store, so it has a wide audience on paper. Its general merchandise stores offer food assortment, dairy, and frozen items while its digital channels include a range of general merchandise. 

Source: TD Ameritrade TOS

From its most recent quarterly report, the company posted a total revenue of $28.3 billion, a 21.1% increase year-over-year. Comparable sales grew by 20.5%, reflecting comparable traffic growth of 6.5%. Its digital comparable sales grew by a whopping 118%, accounting for two-thirds of the company’s overall comparable growth. Target also posted an earnings per share of $2.73 for the quarter as it continues to gain market share across all five of its core merchandising categories. With that in mind, will you consider buying TGT stock before its first-quarter earnings report on May 19?

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Walmart 

Apart from Target, Walmart is also another major beneficiary of pandemic. The company operates a chain of hypermarkets, discount department stores, and grocery stores. To recap, Walmart reported record revenue in its fourth-quarter fiscal earnings, with e-commerce sales increasing by 69% compared to the same quarter in the previous year. While these are solid numbers, investors are bracing for some slowdown when the company reports earnings tomorrow. 

Source: TD Ameritrade TOS

A slowdown is inevitable following a record 2020. Heading into the report, investors might want to recalibrate their expectations if they are expecting another big quarter. In particular, growth in some of Walmart’s newer initiatives will be a key focus of the report. Not sure if you remember, Walmart launched Walmart+ in September, a similar offering to Amazon’s (NASDAQ: AMZN) Prime membership. We will see how this new subscription plays out this week. Should the company be able to prove itself, investors may likely bid up WMT stock again.


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Home Depot

Home Depot is the largest home improvement retailer in the U.S. For the uninitiated, the company mainly supplies consumers with tools, construction products, and related services. In terms of scale, the company operates out of over 2,200 retail stores across the U.S. and Canada. With soaring demand for DIY upgrade projects and a generally booming housing market, investors have high expectations heading into the first-quarter earnings report tomorrow. And some are wondering if the company has more room to grow this year.

Source: TD Ameritrade TOS

Notably, Wells Fargo (NYSE: WFC) analyst Zachary Fadem seems to believe so. Recently, Fadem hit HD stock with an overweight rating, raising his price target from $330 to $360. In particular, the analyst cites “a new housing cycle” as a long-term growth catalyst for the stock. Understandably, new homeowners would likely turn to Home Depot for their home improvement needs in that case. Could this make HD stock a buy right now?

[Read More] Hot Stocks To Buy Next Week? 5 Reddit Stocks In Focus

Costco Wholesale

Costco is a multinational corporation that operates a chain of membership-only retail stores. As of 2020, the company is the fifth-largest retailer in the world and the world’s largest retailer of choice and prime beef. Impressively, it is also ranked #10 on the Fortune 500 rankings of the largest U.S. corporations by total revenue. Amidst the pandemic last year, Costco was deemed essential for obvious reasons. As consumers stocked up on essentials, the company came out from 2020 as one of the biggest winners in retail. My point is though, quality businesses like Costco don’t come cheap. But the question here is, is it worth it’s premium?

Source: TD Ameritrade TOS

From its most recent quarter, net income for the quarter was $951 million while earnings per share were $2.14. Its e-commerce segment for the quarter was up by 75.8% and contributed to this impressive quarter. Total revenue for the quarter was $44.76 billion, a 14.5% increase year-over-year. The company is slated to announce its upcoming earnings report after the market closes on May 27. Given how the company is a clear leader in retail, will you consider adding COST stock to your watchlist?

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Procter & Gamble

Procter & Gamble is not only one of the best consumer staples stocks to watch. But more importantly, it is a recession-proof stock. In fact, it is a staple company that produces goods most people deem necessary. The company has been in business for 184 years. Apart from growth in PG stock, if you are an income hungry investor, PG stock is also one of the best investments you can find in the market. Its stability in revenue and dividend yield in the past six decades make it one of the best consumer staples stocks to buy with or without the pandemic.

Source: TD Ameritrade TOS

The company’s recent success also likely played a key role in management’s decision to raise dividend yield by 10% this year, compared to its 4% hike in 2020. If you’re looking for top dividend stocks to buy right now, PG stock stood out as one of the best names out there in the stock market today. In addition to this, the company also lifted its stock-buyback target for a second straight time. Considering all these major developments, should income investors dive straight into PG stock right now?

By Adam Lawrence

Adam Lawrence is a serial entrepreneur and financial writer for StockMarket.com. He calls Miami, Florida his home but has a love for travel. He started his first digital marketing and website design business, in 2006 at the age of 23. He has worked with and consulted for hundreds of publicly traded companies. His vast knowledge of the public markets has allowed him to gain real-world experience in corporate communications. No matter what is going on in the stock market today, Adam is at the front of the line to track new trends and present them to readers.

As an active contributor to other financial sites like GuruFocus and Benzinga, Adam has gained prominence for reporting on several topics. These include biotech stocks, technology stocks, gold stocks, as well as marijuana stocks. These active stock market sectors have presented investors with some of the biggest opportunities in the stock market today. Adam's goal is to present readers with easily digestible content that is both informative and actionable.

Adam's years of experience in digital marketing have helped give him an edge above other financial writers. His ability to pick up on stock market trends before they hit Main Street is one of the things that has afforded him the opportunity to interact with and engage public companies. Reporting on current events is one thing but being able to dissect them and translate them for readers is of the utmost importance. In doing so, Adam has set a personal standard to deliver timely information that dives deeper than simple headlines and goes into the fine details of what's driving stock market trends. He also stays on top of the most current social media trends among top influencers.

With the emerging landscape surrounding new media, Adam takes an active approach to learn what drives interest in different social media and finds ways to tap into whatever is trending at that time then apply it to his approach to the stock market. In his free time, he enjoys being with his family and working on his house. He's also an avid car enthusiast.

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