While the market continues to climb a wall of worries, it’s not a bad idea to consider diversifying into consumer staples stocks to buy. No, the idea here isn’t necessarily to get rich off the ideas (though that would be nice). Instead, it’s to mitigate volatility risks.
Sure, a broader downdraft tends to impact all securities. However, certain companies and industries should be able to withstand the pressure better than others. In particular, consumer staples stocks to buy offer a viable platform because of their everyday relevance. Undergirding this sector are the essential products that consumers buy frequently: food, beverages, household goods and even alcohol and tobacco.
Again, it’s not the most exciting arenas to play in. However, when the walls feel like they’re caving in, you’ll be glad to have exposure to these consumer staples stocks to buy.
Kellanova (K)
It might be a new name but it’s still the same core products with Kellanova (NYSE:K). Formerly Kellogg Company, Kellanova represents one of the top consumer staples stocks to buy. A breakfast champion, the enterprise is best known for food products like Frosties, Crunchy Nut and of course Kellogg’s. However, the market doesn’t seem to appreciate the opportunity, with K stock down 5% since the January opener.
No matter, Kellanova at the moment offers decent value. Right now, shares trade at 13.26X trailing-year earnings without non-recurring items (NRI). As well, the company enjoys robust margins across the board, leading to consistent annual profitability.
To be fair, analysts estimate on average that Kellanova’s revenue will land at $12.81 billion at the end of this year. That would imply a sales decline of 2.4%. however, a recovery may occur in 2025, leading to revenue of $13.22 billion.
Sure enough, the consensus analyst view for K stock is a hold. Nevertheless, I’d keep my eye on it due to its relevance.
Colgate-Palmolive (CL)
Another top-tier name among consumer staples stocks to buy, Colgate-Palmolive (NYSE:CL) is a no-brainer. First, its namesake business is a necessity, both from a personal hygiene perspective and a long-term health angle. Besides, it’s not like anyone refuses to brush their teeth just because of a market downturn. Second, the company’s cleaning products represent a core essential activity.
Unsurprisingly, Colgate-Palmolive shares found themselves off to a decent start (relatively speaking). They’re up 7% since the start of the year and returned over 17% in the past 52 weeks. Also to little shock, analysts anticipate that in 2024, the company will post revenue of $20.18 billion. That represents a 3.7% lift from last year’s result. Also, earnings per share should land at $3.48, above 2023’s EPS of $3.23.
To be sure, CL stock isn’t exactly the greatest deal in town, posting a trailing-year earnings multiple of 31X. However, the company enjoys strong margins and consistent profitability.
Analysts also view Colgate as a consensus strong buy with an average price target of $91.33.
Celsius (CELH)
One of the questions posed to me is, “Josh, how do you write so many articles without exhausting yourself? My answer: Celsius (NASDAQ:CELH). Basically, if you ever wanted to buy shares of Red Bull but were disappointed to learn that the energy drink giant – and monster Formula One team – is privately owned, Celsius offers the next best alternative (arguably).
It’s a wild success story. Over the past five years, CELH gained 6,675% of market value. Some of my colleagues at TipRanks believe that shares can continue to run higher. Frankly, it’s difficult to disagree. Since the beginning of the year, CELH gained over 34%.
Not only that, analysts anticipate that by the end of this year, Celsius will generate revenue of $1.8 billion. That’s a leap of almost 37% from last year’s result. Also, EPS could land at 97 cents, beating out 2023’s EPS of 77 cents.
It’s easily one of the top consumer staples stocks to buy, with analysts posting an average price target of $86.55. The high side? We’re talking $110.
Kraft Heinz (KHC)
A multinational food company, Kraft Heinz (NASDAQ:KHC) represents a well-known commodity among consumer staples stocks to buy. Should a recession ever materialize, KHC shareholders should be prepared to weather the storm. After all, people will still need their calories. Kraft Heinz can provide just that but at a lower cost than say going out to eat.
Of course, another reason why KHC stock is appealing is because it’s one of the Warren Buffett stocks. The legendary investor loves a good deal and Kraft Heinz provides exactly that. Currently, KHC stock trades at only 11.61X forward earnings. That’s lower than the sector median 15.5X.
Looking ahead to the end of this year, analysts anticipate that the company will post revenue of $26.83 billion. That’s only modest growth of less than 1%. However, a more robust recovery could occur in 2025, with sales rising to $27.32 billion.
Also, experts peg shares a moderate buy with a $38.47 price target, implying about 10% upside potential.
Mondelez (MDLZ)
Moving into the riskier but possibly more rewarding ideas for consumer staples stocks to buy, Mondelez (NASDAQ:MDLZ) could be enticing for smart speculators. A multinational food, beverages and snacks company, Mondelez is perhaps best known for its Oreo brand of cookies. Cynically, such confectionaries are addictive – and that “attribute” bodes well for MDLZ stock.
Analysts seem to agree. On average, they project that the company will post revenue of $37.13 billion. That comes out to 3.1% growth from last year. In 2025, Wall Street experts believe that revenue will land at $38.77 billion. That would represent 4.4% growth if indeed 2024 sales reach $37.13 billion.
On the profitability side, Mondelez may produce EPS of $3.52, implying solid growth over last year’s tally of $3.19. And 2025 may generate EPS of $3.81. To be sure, MDLZ stock isn’t offered at a great discount but the underlying company is consistently profitable.
Lastly, analysts rate shares a consensus strong buy with an $83.47 price target, implying over 15% upside potential.
Philip Morris (PM)
At first glance, tobacco giant Philip Morris (NYSE:PM) might seem too controversial and irrelevant for consumer staples stocks to buy. Primarily, global smoking rates have declined conspicuously. Therefore, the total addressable market appears to be shrinking. Add to that the controversies surrounding the sector and you have a poor investment.
Nevertheless, analysts have a completely different take. By the end of this fiscal year, they believe that the tobacco firm can generate revenue of $37.17 billion. If so, this tally would represent sales growth of 5.4% from last year’s haul. Looking out to 2025, sales might reach $39.56 billion. That would mean a growth rate of 6.4% against projected 2024 sales.
Also, covering experts believe that EPS may reach $6.4. That would be a noticeable jump from $6.01 last year. And in 2025, the print could be up to $7.04. Driving the upside narrative is the vaping/e-cigarette industry, which only continues to rise in popularity.
Analysts peg shares a moderate buy with a $101.94 price target. That translates to over 13% growth potential.
Anheuser-Busch (BUD)
Once manufacturing America’s favorite beer, Anheuser-Busch (NYSE:BUD) is singing in a more humble tune these days. I don’t want to rehash the controversy that engulfed BUD stock about one year ago. You can read about it here if you want. Long story short, Anheuser’s beloved brand Bud Light collaborated controversially with a social media star. Given the underlying narrative, the move sparked criticism that Bud Light went “woke.”
Undoubtedly, the controversy has affected Anheuser-Busch. Not only that, concerns exist that the creative decision will continue to haunt the company. I have a different view: it’s difficult to stay angry for that long, especially for really old news.
Analysts agree. At the end of 2024, they believe sales will hit $63.4 billion, up nearly 7% from last year’s tally. Also, sales may slow a bit but will still be lofty at $66.27 billion by the end of 2025, per estimates.
Overall, the experts rate shares a consensus moderate buy with a $76 price target, projecting over 26% upside potential.
On the date of publication, Josh Enomoto 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.