Those in the Consumer Staples sector carry a defensive nature, as these companies’ products possess an advantageous ability to generate consistent demand in the face of many economic situations.
In addition, many also pay dividends, providing the cherry on top for those who prefer income.
Three stocks from the realm – PepsiCo PEP, Procter & Gamble PG, and Kimberly-Clark KMB – could be worth adding to your radar.
All three presently carry a favorable Zacks Rank and are low-beta, with the latter helping to tame volatility. Let’s take a closer look at each for those seeking a more defensive approach.
PepsiCo
Consumer Staples titan PepsiCo has enjoyed positive revisions following better-than-expected results, with the stock sporting a Zacks Rank #2 (Buy).
Image Source: Zacks Investment Research
Regarding the mentioned release, the company exceeded the Zacks Consensus EPS estimate by 7% and reported sales more than 3% ahead of expectations thanks to strong consumer demand. Earnings saw growth of 13%, whereas revenue climbed 10% from the year-ago quarter.
And to top it off, the company lifted its FY23 guidance. Shares saw bullish activity post-earnings, similar to what occurred in the release prior.
Image Source: Zacks Investment Research
The company is forecasted to grow steadily, with estimates suggesting 10% earnings growth in its current fiscal year on 7% higher revenues.
Procter & Gamble
Procter & Gamble, a current Zacks Rank #2 (Buy), is a branded consumer products company that markets its products in more than 180 countries. PG would likely attract income-focused investors, with shares currently yielding 2.4% annually.
The company has consistently boosted its payout as well, sporting a 6.5% five-year annualized dividend growth rate.
Image Source: Zacks Investment Research
Shares may not entice value-conscious investors, with the current 24.8X forward earnings multiple sitting above the five-year median and the Zacks Consumer Staples sector average. Still, it’s worth noting that shares trade well below the 28.0X high in 2022.
Image Source: Zacks Investment Research
And like PEP, Procter & Gamble posted results that beat expectations in its latest release just on July 28th, exceeding the Zacks Consensus EPS Estimate by 3.8% and delivering a positive 2.6% revenue beat.
Kimberly-Clark
Like those above, Kimberly-Clark has seen its earnings outlook improve over the last several months, helping land the stock into a Zacks Rank #2 (Buy). The revisions trend has been particularly notable for the company’s upcoming release in October, with the $1.58 per share estimate up nearly 3% since May.
Image Source: Zacks Investment Research
For those seeking income, KMB has that covered; KMB shares currently yield a sizable 3.7% annually, well above the Zacks Consumer Staples sector average. The company’s payout has grown by a modest 4% over the last five years.
Image Source: Zacks Investment Research
The company has delivered some big beats as of late, exceeding the Zacks Consensus EPS Estimate by an average of 8% across its last four quarters.
Bottom Line
Stocks in the Zacks Consumer Staples sector carry a defensive nature, as these companies’ products have an advantageous ability to generate consistent demand in the face of many economic situations.
And all three low-beta stocks above – PepsiCo PEP, Procter & Gamble PG, and Kimberly-Clark KMB – could be great considerations for those seeking a more defensive approach.
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