Best Consumer Staples Stocks Of 2022 - Investing - Forbes

Consumer staples are the basic goods that people buy to support their everyday lives. Companies in this industry manufacture, distribute and ... SelectRegion UnitedStates UnitedKingdom Germany India Youmightbeusinganunsupportedoroutdatedbrowser.TogetthebestpossibleexperiencepleaseusethelatestversionofChrome,Firefox,Safari,orMicrosoftEdgetoviewthiswebsite. advisor Investing AdvertiserDisclosure Updated:Oct3,2022,10:15pm BestConsumerStaplesStocksOf2022 DockDavidTreece Contributor ReviewedBy BenjaminCurry editor ReviewedBy Updated:Oct3,2022,10:15pm EditorialNote:WeearnacommissionfrompartnerlinksonForbesAdvisor.Commissionsdonotaffectoureditors'opinionsorevaluations. Consumerstaplesarethebasicgoodsthatpeoplebuytosupporttheireverydaylives.Companiesinthisindustrymanufacture,distributeandsellproductslikefood,beveragesandpersonalhygieneproducts,whicharetypicallylesssensitivetoeconomiccycles. Tohelpyoufindthebestconsumerstaplesstocks,ForbesAdvisorhasprofiledthe10largestcompaniesinthissectorbymarketcapitalization. Readmore BuyingGuides BestCryptoExchanges BestRoboAdvisors BestOnlineBrokers BestMoneyMarketMutualFunds BestInvestmentPortfolioManagementApps BestLow-RiskInvestments BestFixedIncomeInvestments ShowSummary BestConsumerStaplesStocksofOctober2022 WalmartInc(WMT) Procter&GambleCo(PG) NestleSA(NSRGY) Coca-ColaCo(KO) PepsiCoInc(PEP) CostcoWholesaleCorp(COST) L'OrealSA(LRLCY) PhilipMorrisInternationalInc(PM) UnileverPLC(UL) TargetCorp(TGT) TypesofConsumerStaplesStocks AdvantagesofInvestinginConsumerStaplesStocks RisksofInvestinginConsumerStaplesStocks HowtoBuyConsumerDiscretionaryStocks BestConsumerStaplesStocksofOctober2022 FEATUREDPARTNEROFFER WalmartInc(WMT) MarketCap $360billion 5-YearAvg.AnnualizedReturn 12.4% 10-YearAvg.AnnualizedReturn 7.4% MarketCap $360billion 5-YearAvg.AnnualizedReturn 12.4% 10-YearAvg.AnnualizedReturn 7.4% WhyWePickedIt Walmartistheworld’slargestretailer,theworld’slargestcompanybyrevenueandthelargestemployer,withover2.2millionemployeesasof2020.Worldwide,Walmartgetsmorethan260millioncustomervisitseachyear.Forthosewhoprefertoavoidcrowds,there’sthemembers-onlySam’sClubandWalmart+subscriptiondeliveryoptionsaswell. WMTwasfoundedinBentonville,Ark.,bySamWalton,whowasapioneerinvalueretail.WhilethecompanyisstillheadquarteredinArkansas,itnowoperateseverywhereintheU.S.andin24countries. WMTChartbyTradingView FEATUREDPARTNEROFFER Procter&GambleCo(PG) MarketCap $306billion 5-YearAvg.AnnualizedReturn 9.3% 10-YearAvg.AnnualizedReturn 8.4% MarketCap $306billion 5-YearAvg.AnnualizedReturn 9.3% 10-YearAvg.AnnualizedReturn 8.4% WhyWePickedIt Procter&Gambleisaconsumergoodscompanythatmakeseverythingfrompersonalhygieneproductstodetergents,cleanersandotherhouseholdproducts.ThecompanyusedtomakesnacksandbeveragesunderthePringlesbrand,beforesellingthatdivisiontoKellogg. PGisoneofthebiggestemployersinCincinnati,Ohio,whereithasitsheadquarters.Withanannualmarketingbudgetof$11.5billion,italsoholdsthetitleoftheworld’slargestadvertiser. PGChartbyTradingView FEATUREDPARTNEROFFER NestleSA(NSRGY) MarketCap $293billion 5-YearAvg.AnnualizedReturn 6.6% 10-YearAvg.AnnualizedReturn 7.2% MarketCap $293billion 5-YearAvg.AnnualizedReturn 6.6% 10-YearAvg.AnnualizedReturn 7.2% WhyWePickedIt NestleisaSwissmultinationalknownfor—youguessedit—chocolate.Thecompanystartedasacondensedmilkcompany,andmilkchocolatewasoneofitsfirstproducts.Today,thefirmhasexpandedtoproduceagiganticrangeofdifferentfoodsandbeverages. Nestleoperatesinnearly200countries,employsover330,000peopleandoperatesover400factories.ThecompanyisalsooneofthebiggestshareholdersofL’Oreal,anothercompanyonourlist. NSRGYChartbyTradingView FEATUREDPARTNEROFFER Coca-ColaCo(KO) MarketCap $245billion 5-YearTrailingReturn 7.5% 10-YearTrailingReturn 6.4% MarketCap $245billion 5-YearTrailingReturn 7.5% 10-YearTrailingReturn 6.4% WhyWePickedIt SoftdrinksupergiantCoca-ColatracesitshistorybacktoGeorgiainthe1880s.WhenAtlantaandFultonCountyoutlawedalcohol,pharmacistJohnPembertoninventedCoca-Colaasanon-alcoholicversionofPemberton’sFrenchWineCoca.Thedrinkwasintendedforuseasapatentmedicine. Sincethen,KOhasgrownintoabehemothinthebeverageindustryandhasspurredmassivegrowthintheAtlantaregionbyinvestingincrediblesumsbackintothecommunity.Amongotherachievements,thecompanypioneeredverticalintegrationbybuyingoutitsearlybottlers,mintinganumberofmillionairesintheprocess. KOChartbyTradingView FEATUREDPARTNEROFFER PepsiCoInc(PEP) MarketCap $228billion 5-YearAvg.AnnualizedReturn 10.4% 10-YearAvg.AnnualizedReturn 10.8% MarketCap $228billion 5-YearAvg.AnnualizedReturn 10.4% 10-YearAvg.AnnualizedReturn 10.8% WhyWePickedIt Anothersoftdrinkgiantfromthesouth,PepsiCostartedinthe1890sinNorthCarolina.ThecompanywentbrokeduringWorldWarIasaresultofsugarrationing,butitwaslaterpurchased—alongwithitsfamouscolarecipe—byaholdingcompany. PEPhasownedanumberofotherbrands,manyofwhichitsoldoffinthe1990s,suchasrestaurantchainsPizzaHut,TacoBellandKFC,plustheU.S.rightstoRussiandistillerStolichnaya.Today,itstillownsseveralsnackandbeveragebrands,includingGatorade,Lay’s,Doritos,Cheetos,MountainDewandQuakerFoods. PEPChartbyTradingView FEATUREDPARTNEROFFER CostcoWholesaleCorp(COST) MarketCap $212billion 5-YearAvg.AnnualizedReturn 24.7% 10-YearAvg.AnnualizedReturn 18% MarketCap $212billion 5-YearAvg.AnnualizedReturn 24.7% 10-YearAvg.AnnualizedReturn 18% WhyWePickedIt Amultinational,member-onlybigboxchain,Costcoisthefifthlargestretailerintheworld,accordingtotheNationalRetailFoundation.Thecompanyoperates800storesworldwide,thoughstoresexistinfewerthan20countriesandalmost70%ofitsstoresarelocatedintheU.S.Costcoemploysmorethan270,000peopleacrosstheglobe. COSTChartbyTradingView FEATUREDPARTNEROFFER L’OrealSA(LRLCY) MarketCap $172billion 5-YearAvg.AnnualizedReturn 9.8% 10-YearAvg.AnnualizedReturn 11% MarketCap $172billion 5-YearAvg.AnnualizedReturn 9.8% 10-YearAvg.AnnualizedReturn 11% WhyWePickedIt L’OrealisaFrenchcompanythatmanufacturesarangeofpersonalcareproducts,includingcosmetics.Thecompanystartedin1909whenachemistinventedahairdyeandhassincegrownintotheworld’slargestcosmeticscompany. Amongitsmanyprograms,L’OrealhasalsopartneredwithUNESCOtocreatetheWomeninScienceAwardtopromotetheinvolvementofwomeninthesciences. LRLCYChartbyTradingView FEATUREDPARTNEROFFER PhilipMorrisInternationalInc(PM) MarketCap $132billion 5-YearAvg.AnnualizedReturn -0.8% 10-YearAvg.AnnualizedReturn 3.5% MarketCap $132billion 5-YearAvg.AnnualizedReturn -0.8% 10-YearAvg.AnnualizedReturn 3.5% WhyWePickedIt PhilipMorrismanufacturescigarettesandothertobaccoproductsandisconsideredthelargestmemberof“BigTobacco.”PhilipMorrisisperhapsbestknownastheowneroftheMarlborobrandofcigarettes,butitalsoownsmanyotherbrands,sellingproductsin175countriesaroundtheworld. Until2008,PhilipMorriswaspartofAltria.Sincebeingspunoff,PhilipMorrishasgrownitsmarketcaptobehigherthanAltria’s,makingitoneofthebiggestsinstocksintheworld. PMChartbyTradingView FEATUREDPARTNEROFFER UnileverPLC(UL) MarketCap $112billion 5-YearAvg.AnnualizedReturn -1.7% 10-YearAvg.AnnualizedReturn 5.1% MarketCap $112billion 5-YearAvg.AnnualizedReturn -1.7% 10-YearAvg.AnnualizedReturn 5.1% WhyWePickedIt UnileverisaconsumergoodsmultinationalheadquarteredinLondon.Thecompanyisthelargestproducerofsoapintheworld,butitalsomakescountlessothergoods,includingLiptonteasandBen&Jerry’sicecreams.Unileverstandsoutforitspoorenvironmentalrecord,thoughithasrecentlyannouncedplanstodrasticallyreduceitsfootprintbeforetheendofthedecade. ULChartbyTradingView FEATUREDPARTNEROFFER TargetCorp(TGT) MarketCap $70billion 5-YearAvg.AnnualizedReturn 23% 10-YearAvg.AnnualizedReturn 10.8% MarketCap $70billion 5-YearAvg.AnnualizedReturn 23% 10-YearAvg.AnnualizedReturn 10.8% WhyWePickedIt TargetisaretailerthatoperatesanextensivechainofdepartmentstoresthroughouttheU.S.ThecompanyistheeighthlargestretailerintheU.S.Sardonicallyreferredtoas“Targét”bysome,TGThasbecomeatrailblazerinwhatiscalled“cheap-chic”homegoods,characterizedbyhigherqualityandinnovativedesignatstill-affordableprices.Targetoperatesnearly2,000storesintheU.S.andjusttopped400,000employees.Itwasstartedin1902inMinnesotaandisstillheadquarteredthere. TGTChartbyTradingView *AlldataissourcedfromMorningstar,currentasofOct.3,2022. TypesofConsumerStaplesStocks Eachstockmarketsectorcanbebrokendownintoseveralindustriesandsub-sectors.Theconsumerstaplessectorisgenerallysegmentedintothefollowingsub-sectors: Retail.Thesecompaniesoperatestorechains,wholesaleoperationsande-commercesites—basicallyanyplacewhereconsumerstaplesproductsaresold. Foodandbeverage.Foodstaplesincludecompaniesthatmakecereals,snacksandotherdrygoods.Beveragescanincludealcoholbutaremoreoftencolasandenergydrinks. Householdproducts.Furniture,decorandcleaningproductsareallincludedinthiscategory. Personalproducts.Theseincludecosmeticsandpersonalhygieneproducts,rangingfromperfumeanddeodoranttomouthwashandtoothpaste. Tobacco.Thisisacontroversialmemberoftheconsumerstaplesfamily,givenchangingpublicattitudestowardsmoking.Butthetobaccosubsectorstillrepresentsbigbusinessforthosecompaniesthatmanufactureandsellcigarettesandrelatedproducts. AdvantagesofInvestinginConsumerStaplesStocks Goodperformanceunderanymarketconditions.Peoplebuystaplesinboomtimesandinbusttimes,whichmakesconsumerstaplesstocksgoodperformersnomatterwhat’shappeninginthebroadereconomy.That’swhythey’reoftenconsidereddefensivesafehavensduringarecession. Strongdividendincome.Consumerstaplesstockstendtopaysoliddividendsandkeeppayingthemoverthelongterm.Infact,theyarewellrepresentedamongtheDividendAristocrats—firmsthathaveincreasedtheirdividendsannuallyforatleast25consecutiveyears. Stabilityandlongevity.Thelargestconsumerstaplescompanieshavebeeninbusinessfordecades,someforevenmorethanacentury.Sincetheysellproductsthatarealwaysindemand,consumerstaplesstockssustainlong-termbrandvalue—andthattranslatesintolong-termstockvalueforinvestors. RisksofInvestinginConsumerStaplesStocks Low-margin,slow-growthcompanies.Theprofitmarginsonconsumerstaplesproductsarerazorthin,providingstocksinthesectorwithverymodestopportunitiesforgrowth.Inperiodswhentheeconomyisdoingwell,consumerstaplesstocksmayunderperformothermoredynamicsectors. Somebrandsarevulnerabletodisruption.Certainsegmentsoftheconsumerdiscretionarysector,especiallyretailers,areripetargetsfordisruptionbynewe-commercecompetitors.Moreover,growingonlinesalesdilutesthepowerofwell-knownconsumerstaplesbrands. HowtoBuyConsumerDiscretionaryStocks Investorscanbuyconsumerdiscretionarystocksusingastandardtaxablebrokerageaccountoratax-advantagedindividualretirementaccount(IRA).Ifyou’renewtoinvesting,oryou’dliketochangeupyourcurrentinvestingaccounts,besuretocheckoutForbesAdvisor’slistofthebestonlinebrokeragesandthebestinvestmentapps. Whenbuyingindividualstocks,it’simperativetododuediligenceandresearchtheconsumerdiscretionarystocksyou’reinterestedin.Individualstockpickingcanbeaveryriskywayofinvesting,andthatmeansyoushouldpursuethisstrategywithyoureyeswideopen. ReadMore:HowToBuyStocks Financialadvisorswouldrecommendthatnon-professionalinvestorstakeadiversifiedapproach.Ratherthanbuyingindividualstocks,expertssuggestchoosingawell-diversifiedconsumerdiscretionaryindexfundorexchange-tradedfund(ETF).Usethefundscreenertoolsavailableonyourbrokerageplatformtofindthebestoptions. Theauthor(s)heldnopositionsinthesecuritiesdiscussedinthepostattheoriginaltimeofpublication. InformationprovidedonForbesAdvisorisforeducationalpurposesonly.Yourfinancialsituationisuniqueandtheproductsandserviceswereviewmaynotberightforyourcircumstances.Wedonotofferfinancialadvice,advisoryorbrokerageservices,nordowerecommendoradviseindividualsortobuyorsellparticularstocksorsecurities.Performanceinformationmayhavechangedsincethetimeofpublication.Pastperformanceisnotindicativeoffutureresults.ForbesAdvisoradherestostricteditorialintegritystandards.Tothebestofourknowledge,allcontentisaccurateasofthedateposted,thoughofferscontainedhereinmaynolongerbeavailable.Theopinionsexpressedaretheauthor’saloneandhavenotbeenprovided,approved,orotherwiseendorsedbyourpartners. DockDavidTreece Contributor DockDavidTreeceisaformerlicensedinvestmentadvisorandmemberoftheFINRASmallFirmAdvisoryBoard.Hisfocusisonbreakingdowncomplexfinancialtopicssoreaderscanmakeinformeddecisions.HehasbeenfeaturedbyCNBC,FoxBusiness,Bloomberg,andMarketWatch. Wasthisarticlehelpful? 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