In this article, we will look at the 10 Best Soaps and Cleaning Materials Stocks to Invest In.
Overview of the Consumer Staple Sector
Soaps and cleaning materials stocks fall in the consumer staple sector. According to the Global Industry Classification Standard (GICS), these stocks are less sensitive to economic cycles, as all consumers need to eat, clean themselves and their houses, and perform other acts of personal hygiene. Consumer staples are thus an integral part of life.
These stocks generally do not have the highest year-over-year revenue and earnings growth. This is primarily because they are usually mature and large companies. However, the consumer staples sector has historically experienced relatively minute disruption. Stocks in this sector have various other characteristics that overshadow their modest growth. These characteristics include noncyclic and inelastic demand that does not fluctuate with changing prices and economic conditions. They also entail stable revenue streams, reliable profits, low price volatility, defensive positioning, and a reliable dividend-paying nature.
What Does 2025 Look Like for Consumer Staples?
On December 10, Ben Shuleva, Fidelity Sector Portfolio Manager, published a report on Fidelity Investments to discuss the outlook and expected nature of consumer staples in 2025. The consumer staples sector had a positive year in 2024. Shuleva is of the view that with sector dynamics returning to normal, 2025 is also expected to have a positive outlook for the sector. Solid consumer balance sheets, a strong economy, and support from the Fed may help the sector perform better than the broader market. Opportunities thus exist in consumer staples in 2025. Stable consumer demand, steady real wage growth, and healthy employment are further expected to support these opportunities.
However, Shuleva warned that some uncertainties may affect the sector. These include trade policy changes that may arise due to Trump’s incoming presidential administration, the effects of tariffs, and the potential consequences of the dollar’s strength or weakness. He further highlighted that since most consumer staple products are manufactured in the United States, the direct effects of tariffs are expected to be limited. However, products like Mexican alcohol and Chinese items sold by consumer staples retailers may experience price increases.
Shuleva also presented a bright side to the sector, reasoning that since consumer staple businesses have experienced volatility from changing tariff policies in recent years, they are likely to be well-prepared for them. Like other sectors, the consumer staples sector’s ultimate performance depends upon the broader economy’s performance. It is a defensive sector, and defensive sectors are historically likely to perform well in economic weaknesses.
With these trends in view, let’s look at the 10 best soap and cleaning materials stocks to invest in.
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Our Methodology
We sifted through stock screeners, online rankings, and ETFs to compile a list of 15 soaps and cleaning materials stocks. We then selected the top 10 stocks most popular among elite hedge funds. We sourced hedge fund data from Insider Monkey’s database. The stocks are sorted in ascending order of the number of hedge fund holders that have stakes in them as of fiscal Q3 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Soaps and Cleaning Materials Stocks to Invest In
10. WD-40 Company (NASDAQ:WDFC)
Number of Hedge Fund Holders: 25
WD-40 Company (NASDAQ:WDFC) owns various brands that develop maintenance, cleaning, and home care products. It develops and sells products that solve problems in homes, workshops, and factories across the globe, including Solvol, WD-40 Multi-Use Product, no vac, 3-IN-ONE, WD-40 Specialist, GT85, 2000 Flushes, and Carpet Fresh.
The company reported net sales of $153.5 million in fiscal Q1 2025, an increase of 9% from fiscal Q1 2024. It also reported $145.5 million in net sales of its maintenance products in fiscal Q1 2025, the company’s core strategic focus. This reflects an increase of 10% from fiscal Q1 2024, and marks the third consecutive quarter of double-digit growth in this category.
WD-40 Company (NASDAQ:WDFC) is thus experiencing a strong volume performance. Around 90% of its growth in fiscal Q1 2025 was driven by increased sales volume, excluding the impact of the currency. The company plans to continue this momentum. It is focused on standardization and processes such as portfolio and project management. It is also streamlining approaches to solution-driven decision making.
In addition, WD-40 Company’s (NASDAQ:WDFC) increased focus on its key growth markets across the globe is continually yielding success. In fiscal 2025, it plans to continue building its flagship brand with end users worldwide. It is accelerating premiumization and targeting a compound annual growth rate for net sales of premiumized products of greater than 10%. The company ranks tenth on our list.
9. Newell Brands Inc. (NYSE:NWL)
Number of Hedge Fund Holders: 28
Newell Brands, Inc. (NYSE:NWL) is a global consumer goods company that manufactures, markets, and sells consumer and commercial products. Its Home and Commercial Solutions segment offers commercial cleaning and maintenance solutions, hygiene systems, garage and closet organization products, and others.
The company is focusing on its new corporate strategy, which it announced a year ago. This strategy entails disproportionately investing in brand building, innovation, and market excellence in its profitable and largest markets and brands. It is also driving scale efficiencies and standardization across its supply chain and back-office functions.
Newell Brands, Inc. (NYSE:NWL) has also transitioned into a new operating model designed to enhance its organization’s effectiveness and agility. The strategy and operating model changes have begun to yield results for the company and are expected to continue in the coming quarters. It reduced net debt by more than $560 million in the past five quarters. In addition, its normalized EBITDA increased by 2% on a trailing 12-month basis compared to the prior year, going from $739 million to $903 million. On January 17, Barclays maintained a Buy rating on Newell Brands and set a price target of $11.00. Newell Brands, Inc. (NYSE:NWL) takes the ninth spot on our list of the best soaps and cleaning materials stocks to buy now.
