4 Inflation-Proof Consumer Staples Stocks Worth Buying Now

The Federal Reserve has jacked up the cost of borrowing to slow down economic growth and curb inflationary pressure. No doubt, such monetary tightening measures have slowed inflation from a 40-year high, but price pressure continues to run hot for the Fed’s comfort.

The consumer price index (CPI) increased 0.4% month over month in February and 3.2% from a year ago, per the Labor Department. Even though the monthly gain was in line with estimates, the annual gain was slightly above expectations of an increase of 3.1%.

Core CPI, which eliminates the volatile energy and food costs, increased 0.4% on a month-on-month basis and 3.8% from a year ago. Both the readings were slightly higher than forecast.

The headline inflation number primarily increased due to an uptick in the prices of energy and shelter. Energy costs increased 2.3%, while shelter costs rose 0.4%. Home prices, in reality, are expected to continue to rise this year. Separately, airline fares, apparel costs and the cost of used vehicles were up 3.6%, 0.6% and 0.5%, respectively.

Elevated inflation, regrettably, decreases the purchasing power of dollars. This tends to impact consumer spending, which derails economic growth and stirs up volatility in the stock market.

However, investors shouldn’t get rattled. Instead, it’s prudent for astute investors to place bets on stocks unfazed by inflationary pressure and their hostile impact on the stock market.

These stocks belong to the consumer staples sector. In case of price pressure, consumers may cut back spending on discretionary items but must buy staple products. Moreover, these staple products are cyclical, or in other words, their demand is constant irrespective of market disturbance.

We have thus highlighted four fundamentally sound consumer staple stocks, namely Pilgrim’s Pride Corporation PPC, Molson Coors Beverage Company TAP, Tyson Foods, Inc. TSN and Grocery Outlet Holding Corp. GO, which flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Pilgrim's Pride is focusing on strengthening its Prepared Foods category. PPC currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has increased 14.9% over the past 60 days. The company’s expected earnings growth for the current year is 68.6%.

Molson Coors is a global manufacturer and seller of beer and other beverage products. TAP currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has increased 4.6% over the past 60 days. The company’s expected earnings growth for the current year is 4.3%.

Tyson Foods produces, distributes and markets chicken, beef and pork, including prepared foods. TSN currently has a Zacks Rank #1. The Zacks Consensus Estimate for its current-year earnings has increased 23.2% over the past 60 days. The company’s expected earnings growth for the current year is 74.6%.

Grocery Outlet is a high-growth, extreme-value retailer of quality, name-brand consumables and fresh products. GO currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings has increased 1.7% over the past 60 days. The company’s expected earnings growth for the current year is 9.4%.

 

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Molson Coors Beverage Company (TAP) : Free Stock Analysis Report

Tyson Foods, Inc. (TSN) : Free Stock Analysis Report

Pilgrim's Pride Corporation (PPC) : Free Stock Analysis Report

Grocery Outlet Holding Corp. (GO) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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