e.l.f. Beauty Inc., New Oriental Education & Technology Group Inc., and Hims & Hers Health Inc. are among the top-performing consumer staples stocks this month, each providing investors with returns in excess of 120% in the past year.
The Consumer Staples Select Sector SPDR ETF (XLP) has fallen by 1% in the past 12 months, compared to the Russell 1000 index’s 4% gain over the same period.
Below we look at the top consumer staples stocks in three categories: the best value, the fastest growth, and the most momentum. All data are as of June 5.
Best Value Consumer Staples Stocks
These are the consumer staples stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
- Cal-Maine Foods Inc.: Cal-Maine handles the production, packaging, marketing, and distribution of shell eggs for supermarkets, distributors, and consumers all across the United States. Cal-Maine’s bottom line increased eightfold for the quarter ending Feb. 25 after a bird flu outbreak killed 43 million egg-laying hens, causing U.S. egg prices to double.
- JBS S.A.: JBS is a food processing company in Brazil that offers animal products such as pork, beef, poultry, and fish. JBS’s gross profit fell 53% in the first quarter amid reduced demand and higher livestock purchase prices. Share prices have fallen almost 50% in the past year.
- Herbalife Ltd.: Herbalife is a health and wellness company that provides a range of products for weight management, nutrition education, and fitness.
Fastest Growing Consumer Staples Stocks
These are the top consumer staples stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth.
Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 1,000% were excluded as outliers.
|Fastest Growing Consumer Staples Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|e.l.f. Beauty Inc. (ELF)||105.11||5.7||867||78|
|Cal-Maine Foods Inc. (CALM)||47.09||2.3||717||109|
|Celsius Holdings Inc. (CELH)||143.94||11.1||344||95|
- e.l.f. Beauty Inc.: Formerly known as J.A. Cosmetics Holdings, e.l.f. is a global cosmetic and skin care product manufacturer that markets its products globally under the e.l.f. Cosmetic, e.l.f. Skin, Well People, and Keys Soulcare brands. The company released its fourth quarter and 2023 fiscal year results on May 24. Net income increased more than tenfold, while net sales rose for the seventeenth consecutive quarter. e.l.f. Beauty stock jumped 20% following the earnings release.
- Cal-Maine Foods Inc.: See company description.
- Celsius Holdings Inc.: Celsius Holdings distributes and sells flavored carbonated energy drinks and other liquid supplements under the Celsius, Celsius Heat, and Celsius On-The-Go brands. Celsius Holding’s net income soared sixfold, and total revenue nearly doubled in the first quarter of 2023 compared with the year before. The increase in total sales was primarily attributed to a PepsiCo partnership, which has allowed Celsius to integrate into the PepsiCo distribution system. After the earnings report, Celsius’ stock price jumped by more than 20%.
Consumer Staples Stocks With the Most Momentum
These are the consumer staples stocks that had the highest total return over the past 12 months.
|Consumer Staples Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|e.l.f. Beauty Inc. (ELF)||105.11||5.7||298|
|New Oriental Education & Technology Group Inc (EDU)||41.54||7.1||223|
|Hims & Hers Health Inc. (HIMS)||8.95||1.9||120|
|Russell 1000 Index||N/A||N/A||4|
|Consumer Staples Select Sector SPDR ETF (XLP)||N/A||N/A||-1|
- e.l.f. Beauty Inc.: See company description.
- New Oriental Education & Technology Group Inc.: New Education is one of the largest private tutors in China with 712 learning centers and 26,000 teachers. The company swung to a profit in the most recent quarter, reporting net income of $94 million after losing $126 million a year ago. The company has seen consistent growth in the livestream e-commerce business it launched in 2021 amid a regulatory crackdown on China’s private education sector.
- Hims & Hers Health Inc.: Hims & Hers is a health and wellness company that operates an integrated Telehealth platform, medical record system, and online pharmacy. The company’s net loss shrank by 39% in the first quarter, while subscriber count and total revenue both nearly doubled from the prior-year quarter.
Advantages of Consumer Staples Stocks
Several key advantages of consumer staples stocks include stability, growing dividends, and lower volatility.
Stability: Consumer staples stocks typically generate consistent earnings as they offer products and services that remain in demand irrespective of the economy’s health. Consumers will always need to purchase household goods, toiletries, and food, even during periods of declining discretionary income.
Growing Dividends: Given that consumer staples stocks generate consistent profits, they usually pay investors steady dividends. Indeed, many names in the group are also dividend aristocrat stocks—companies in the S&P 500 that have raised their dividend for 25 consecutive years. The XLP ETF yields 2.55%, which is above the S&P 500’s 1.66% dividend yield.
Lower volatility: During periods of economic uncertainty, consumer staples stocks can help investors minimize risk as they typically display lower levels of volatility compared to other sectors. For instance, if the broader stock market falls 2%, the average consumer staples stock may fall by about half that amount.
Cons of Consumer Staples
Two key disadvantages of consumer staples stocks include slower growth and changing consumer preferences.
Slower Growth: During times of economic expansion, the group often underperforms growth companies, such as fast-moving technology stocks. Investors who overweight consumer staples names in their portfolio during bull markets may miss out on sizeable market gains in other sectors.
Changing Consumer Preferences: Many consumer staples stocks are established companies that rely on consistent consumer spending patterns. Changing preferences, such as a move to online shopping and the uptake of specialty brands, have the potential to disrupt the sector.
The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our warranty and liability disclaimer for more info.
As of the date this article was written, the author does not own any of the above stocks.