Do you have these basic consumer stocks on your watchlist?
Consumer staples stocks offer investors a good mix of safety and growth potential in the stock Exchange today. Whether you like it or not, we rely on these daily essentials to start each day. From food and drink to some home care products, these are the products we buy, regardless of how the economy in general performs. Since consumers buy these products regardless of economic cycles, these defensive names tend to be stable in both bull and bear markets.
With inflation at 7.5% in January, you’re probably worried about the impact it could have on your portfolio. This causes some investors to be on the defensive to some extent. And that makes these consumer staples, like defensive actions, worth considering in the stock market today. However, just because inflation is hot right now doesn’t mean you should be running for the hills. Instead, look for those that can pass the higher costs on to consumers. That way, those consumer staples names could continue to benefit.
An example of a consumer staple stock that is doing well right now might be Big BJ club (NYSE: B.J.). Late last month, it announced it would acquire the assets and operations of its long-time partner Burris Logistics. This acquisition includes four distribution centers and a private transport fleet. Ultimately, this will help BJ scale and expand its supply chain capabilities. Somewhere else, Yum! Brands (NYSE: YUM), the parent company of KFC and Taco Bell, also reported strong quarterly results earlier on Wednesday. With all that in mind, here are four stocks of basic consumer goods to be checked on the stock market today.
The Best Consumer Staples Stocks to Invest [Or Avoid] In 2022
Coca Cola is a beverage company that sells its products in more than 200 countries and territories. Its multiple billion-dollar brands are spread across multiple beverage categories around the world. Namely, these include soft drink brands such as Coca-Cola, Sprite, and Fanta, to name a few. Besides soft drinks, the company also offers sports, coffee and tea brands. For an idea of scale, the company has over 700,000 employees worldwide. Yesterday the company released its fourth quarter and full year 2021 results.
Plunging, Coca-Cola’s revenue and profit both beat Wall Street estimates. As a result, quarterly revenue rose 10% to $9.46 billion from $8.61 million last year. Net income for the quarter was $2.41 billion, up an impressive 65% year-over-year from $1.46 billion. Thus, earnings per share amounted to $0.56 compared to $0.34 last year. Aside from finance, Wells Fargo (NYSE: WFC) analyst Chris Carey reiterated his overweight rating on the knockout action. The analyst believes the momentum could continue due to strong revenue performance driven by higher pricing and mixed delivery. Given Coca-Cola’s strong quarter, will you buy KO stock?
Another big name in the consumer staples sector is PepsiCo. All in all, most of us would be familiar with the offerings of global food companies. This ranges from its famous beverage lines such as Pepsi-Cola and Gatorade to food brands such as Frito-Lay and Quaker. In fact, the company estimates that its products are consumed more than a billion times a day in more than 200 countries around the world. Given PepsiCo’s impressive reach in the market, I could see why investors might gravitate towards PEP stocks.
Looking at PepsiCo’s recently released fourth quarter results, its net revenue was approximately $25.25 billion. Up 12.4% from $22.46 billion last year and beating analyst estimates of $1 billion. As for the company’s earnings, earnings per share came in at $0.95 on net income of $1.32 billion. Additionally, Pepsi said it expects organic revenue growth of 6% for 2022. As for its earnings outlook, the company is forecasting full-year earnings of $6.67 per share. year. All things considered, do you think PEP shares are worth buying?
Kellogg’s is a manufacturer and distributor of ready-to-eat cereals and prepared meals. Its main products are snacks ranging from crackers, cereals, frozen waffles to noodles. You may be familiar with its products through brands such as Kellogg’s Corn Flakes, Cheez-It, Pringles and many more. Regarding its market reach, Kellogg’s distributes its product in more than 180 countries around the world. The company released its full-year results yesterday which were in line with its guidance across all metrics.
To start, net sales for the year were $14.18 billion, up 3% year over year. The company attributes this increase to a positive price/mix across its four operating regions. Along with that, earnings per share came in at $4.33 for the year. This is a 19.3% increase from $3.63 last year. Notably, the earnings were mainly due to a favorable mark-to-market valuation gain. For 2022, Kellogg’s expects net sales to increase 3% and earnings per share to increase 1% to 2%. CEO Steve Cahillane said: “We enter 2022 with growth momentum, financial flexibility through strong cash flow and balance sheet, and enhanced capabilities that will continue to enable us to manage challenging business conditions.“Given the positive outlook, does the K-stock have a place on your watchlist?
To sum up our list of basic consumer stocks for today is McCormick, a food company that manufactures, markets and distributes flavoring products. These include spices, seasoning mixes and condiments. McCormick sells primarily to retail outlets, food manufacturers and catering companies. In addition, its products are available in many countries. In fact, it is the largest producer of spices and related food products in the world, in terms of revenue.
Last month, McCormick announced its results for fiscal year 2021. For starters, revenue increased 13% in 2021 compared to 2020. Sales were driven by strong growth in the Consumer and Flavor Solutions segments. . Additionally, adjusted earnings per share increased to $3.05 from $2.83 the previous year. McCormick also provided its forecast for 2022. For its sales, the company expects an increase of 3% to 5%. Meanwhile, for earnings per share, McCormick expects that figure to be between $3.17 and $3.22. That being said, will you be watching MKC’s stock?
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