雅虎香港財經 3 Consumer Staples Stocks to Buy as Inflation Subsides
As the economy started to recover from the onset of 2023, primarily on an AI boom, investors rushed back to sectors with mega-cap growth stocks like tech and away from safer and cash-flow-generating sectors like consumer cyclicals. Consumer Staples, in 2023, declined for the second year in a row, with the Consumer Staples Select Sector SPDR (XLP) sliding less than 1%.
However, the sector has recovered this year and was up 9.1% as of Jun 4. The calendar year has been marked by apprehensions about the Fed not bringing down rates per promise. Amid this, investors seem to have ramped up their interest in defensive stocks. The defensive nature of these stocks ensures that market volatility does not have a lasting impact on the sector. The word “staples” itself quite efficiently explains that consumers would be needing them regardless of what transpires. The sector, thus, is fundamentally strong and is resistant to the vagaries of the market.
Consumer staples may not have the highest earnings growth or year-over-year revenue growth but the sector has experienced relatively little disruption historically. On the pro side, these stocks make up for modest growth with low price volatility, reliable profits, dividends and defensive positioning.
U.S. consumer prices increased slightly in April and were cooler than expected. The Department of Labor reported that the Consumer Price Index (CPI) increased 0.3% month over month in April compared with the consensus estimate of 0.4%. Core inflation came in line with expectations at a 0.3% increase. But the most significant inflation metric, perhaps, was released on the last day of the month.
PCE Inflation, which is often considered to be the Fed’s favorite inflation indicator, dropped 0.1% in April. This follows the March number, which was revised down to 0.4% from the previously reported 0.5%. This implies more purchasing power in the hands of consumers.
Our Picks
We have selected three consumer staples stocks. These stocks below have a Zacks Rank #1 (Strong Buy) or #2 (Buy). The search was also narrowed down to stocks with a VGM Score of A or B. Here, V stands for Value, G for Growth and M for Momentum. The score is a weighted combination of these three metrics and allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here
Arko Corp. ARKO is a U.S.-based operator of convenience stores.
Arko’s expected earnings growth rate for the current year is 125%. The Zacks Consensus Estimate for its current-year earnings has improved 500% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of A.
Edgewell Personal Care Company EPC is a global manufacturer and marketer of personal care products.
Edgewell Personal Care’s expected earnings growth rate for the current year is 14.1%. The Zacks Consensus Estimate for its current-year earnings has improved 4.3% over the past 60 days. The company has a Zacks Rank #1 and a VGM Score of A.
Kimberly-Clark Corporation KMB is a manufacturer and marketer of personal care and consumer tissue products.
Kimberly-Clark’s expected earnings growth rate for the current year is 7%. The Zacks Consensus Estimate for its current-year earnings has improved 2.9% over the past 60 days. The company has a Zacks Rank #2 and a VGM Score of B.
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Edgewell Personal Care Company (EPC) : Free Stock Analysis Report
ARKO Corp. (ARKO) : Free Stock Analysis Report
