As market volatility persists in 2024 with the presidential election on the horizon, investors look towards more stable investments. Consumer staples stocks are a reliable choice for those seeking to navigate these turbulent times.
These stocks represent companies that produce and sell essential goods and services, such as food, beverages, household products and personal care items. This makes investing in the sector extremely attractive, as companies can generate consistent revenue and cash flows. Moreover, the companies tend to have a history of returning value to shareholders through dividends and share buybacks. For income-focused investors, this is a significant advantage, as it provides a reliable source of passive income.
Given the defensive nature of the industry, now could be a great time to consider adding these giants to your investment portfolio.
Now, let’s discover the top three consumer staples stocks to add to your July buy list.
Mondelez International (MDLZ)
Mondelez International (NASDAQ:MDLZ) is a global snacking powerhouse, boasting a diversified portfolio of iconic brands such as Oreo, Cadbury and Trident. The company’s strong market position makes it a compelling choice for investors looking for reliable consumer staples stocks.
Mondelez has consistently delivered strong financial performance over the last few years. The company’s strong brand recognition and growth strategy through acquisitions has paid significant dividends. It continues to acquire high-profile brands, including the acquisition of leading U.S. energy bar maker, Clif Bar & Company. Additionally, its commitment to sustainability coupled with its robust supply chain network enables it to manage costs efficiently. This has allowed the company to scale organically and maintain a competitive edge in the marketplace.
In FY23, Mondelez saw record revenue of $36.01 billion, an increase of 14% year over year. Moreover, its net earnings swelled 82% year over year to $4.95 billion. But the cherry on top was the company increasing its dividend by 10% and returning $3.7 billion to shareholders.
Hershey (HSY)
Hershey (NYSE:HSY) is a leading confectionery company with a rich history and strong portfolio of brands, including Hershey’s, Reese’s and Kit Kat. Known for its high-quality products, Hershey is an emerging consumer staples stock that truly does not get the love it deserves.
The Hershey brand has been around for more than a century, showcasing its ability to navigate through an array of economic cycles. It has continued to innovate and expand its products beyond traditional chocolate. This includes its foray into the healthy snack segment. Moreover, its growing presence in international markets, particularly in Asia, is a noble strategy.
Even amidst record-high cacao prices, Hershey’s healthy profit margins are a testament to management’s strong execution. In the 2023 fiscal year, revenue increased 7% year over year to a record $11.16 billion. Additionally, net earnings rose 13% year-over-year to $1.86 billion while generating $1.55 billion in free cash flow. The company’s dividend is also growing rapidly, placing it among the best consumer staples stocks to snap up in Q3 2024.
PepsiCo (PEP)
PepsiCo (NASDAQ:PEP), a global food and beverage giant, is the final company on this list for the top consumer staples stocks to buy in 2024. The company consistently delivered strong financial results over the last decade. Additionally, its focus on innovation, strong brand recognition and expansion into new markets enhances its long-term appeal.
One of PepsiCo’s key strengths is its ability to cater to a wide range of consumer preferences. It has a diversified portfolio of brands across various categories, including carbonated soft drinks, juices, snacks and breakfast items. Furthermore, it has also embraced healthier food options, acquiring notable brands like Health Warrior and Naked. This move has significantly enhanced the company’s competitive edge.
In FY23, the company saw record revenue, earnings and free cash flow. The Latin American market reported significant gains, with operating profit up 67% from the year prior. Its valuation is also still quite attractive and it recently raised its dividend by 7% to a record $1.355 per share. Despite weaker demand and volume in domestic markets, its 4% revenue and 8% EPS guidance for FY24 make the stock extremely compelling.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
