What Are Consumer Staple Stocks and Are They Worth Investing In?
Key takeaways
- Consumer staple stocks are companies that provide everyday household goods
- They’re considered less volatile than other parts of the market and good for a ‘recession-proof’ portfolio strategy
- Some of the bigger stocks include Procter & Gamble, Unilever and Johnson & Johnson
Ever thought about making returns from the everyday items you use? It’s possible with consumer staple stocks. They might not be as fun to invest in as the massive highs and lows you see with other parts of the market, but as stocks go, consumer staples are as safe as it gets. Here’s an explainer of what they are and some of the bigger stocks you could invest in.
Consumer staple companies are the type of value brands that the likes of Warren Buffett prefer to invest in. Now you can adopt the same strategy with Q.ai’s Value Vault Kit. It uses an AI algorithm to do the hard work with the data, predicting which companies with relatively low valuations and strong balance sheets are set to perform well to help you build wealth the old-fashioned way.
Download Q.ai today for access to AI-powered investment strategies.
What are consumer staple stocks?
Consumer staple stocks are what they say on the tin: they’re stocks in companies that produce the everyday items Americans can’t live without. Think food and drinks, personal hygiene products and household cleaning goods.
Adding a few consumer staple stocks to your portfolio is always worth considering because they’re slow and steady. Consumer staples don’t tend to dip in demand, so the companies tend to produce consistent returns and dividends.
They’re a great choice for a recession-proof portfolio because everyone needs the necessities, even in an economic downturn. They might not be as sexy as the big-ticket tech stocks, but they’re definitely less volatile.
Consumer staple stocks examples
Procter & Gamble
This company is one of the biggest consumer staple conglomerates in the world — if you use something in your everyday life, chances are Procter & Gamble produces it. The stock has gained 2.1% in the last month and is currently trading at around $148, but overall the share price has lost 2% in 2023.
Unilever
This company is pretty on par with Procter & Gamble regarding its scale and how many household-name brands it owns, including Dove and Magnum ice creams. Unilever is up 2.56% so far this year, but the company could see further stock fluctuations this year. It’s on the cusp of getting a new CEO and has made some divestments of late such as its tea division being sold to CVC Capital Partners for $4.9 billion last year.
Johnson & Johnson
Johnsons largely operates in the pharmaceuticals industry, with top products including the immunology drug Selera and cancer treatment Darzalex. This year it’s dropped 7% in value, which might attract investors looking to buy the dip — especially with a 2.9% dividend yield available.
The bottom line
Consumer staples are the tortoise of stocks: they’re slow and steady but win the race. Consider adding some to your portfolio if you want to have some ‘safe as houses’ stocks in your investing strategy.
When it comes to investing, it’s good to have a mix of stocks in your portfolio to catch gains. Q.ai’s Value Vault Kit takes care of the ‘safer’ part of the stock market by holding a mix of companies with low valuations and solid balance sheets, with an AI sifting through massive amounts of data to predict which stocks are set to perform. It then dynamically adjusts the Kit’s holdings to help you grow your returns.
Download Q.ai today for access to AI-powered investment strategies.
