In this article, we take a look at 12 top performing consumer staples stocks in January. If you want to see more top performing consumer staples stocks in January, go directly to 5 Top Performing Consumer Staples Stocks in January.
Demand for many consumer staples does not change that much in the near term.
While economic conditions might deteriorate, the overall demand for food will remain largely the same or increase as the population increases.
Similarly, the overall demand for essential consumer products like toothpaste or detergent will not change very much despite changes in economic condition. Because toothpaste or detergent are considered essential and don’t cost very much, many consumers keep buying the products and cut spending on more expensive and not as needed products in more difficult economic times.
Individual Company Demand Can Change More Than the Overall Sector Demand
While the overall demand for many consumer goods might not change as much, the individual demand for consumer good companies does change more frequently and sometimes quite substantially.
If a competitor does a good job in terms of marketing, a leading consumer staple might lose market share and it might not make as much profit as the market expects.
If the leading consumer staple does a good job in terms of launching new products or growing in new emerging markets, it could potentially make more profit than what the market expects even though the overall demand for a consumer staple remains largely the same.
If there is a lot of inflation like what has occurred in 2022, some of the more premium consumer staples brands might not sell as much as consumers downgrade to cheaper alternatives to save money.
Consumer Staples ETF
In terms of the consumer staples ETFs, the Consumer Staples Select Sector SPDR® Fund (XLP) “seeks to provide an effective representation of the consumer staples sector of the S&P 500 Index.” Specifically the ETF, “seeks to provide precise exposure to companies from the food and staples retailing, beverage, food product, tobacco, household product and personal product industries in the U.S.”
In terms of the ETF’s characteristics as of January 30, 2023, The Consumer Staples Select Sector SPDR® Fund (XLP) has a weighted price to earnings ratio of 20.97, a weighted price to book ratio of 5.44 and an est. 3-5 year EPS growth rate of 6.74%.
The ETF has an inception date of December 16, 1998 and a gross expense ratio of 0.10%.
Because many leading consumer staple stocks are dividend stocks given their relatively stable businesses, The Consumer Staples Select Sector SPDR® Fund (XLP) has a 30 Day SEC yield of 2.55%.
S&P 500 Performance in January
In terms of January, the S&P 500 has rallied 6.6% in the month as fourth quarter U.S. GDP growth has been stronger than expected and as inflation has shown signs of having potentially peaked last year.
Given the Federal Reserve is expected to increase interest rates further this year, however, stocks could decline if economic data doesn’t meet estimates. As a result it could be a good idea to have a well diversified portfolio of blue chip stocks across many different sectors.
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Methodology
For our list of 12 Top Performing Consumer Staples Stocks in January, we took the 33 holdings of The Consumer Staples Select Sector SPDR® Fund (XLP) as of January 30.
Of the stocks, we took the top 12 performing in terms of year to date performance as of January 31 according to Finviz.com.
Given the leading consumer staple stocks aren’t usually very volatile, many of the top 12 performing stocks have not exceeded the S&P 500’s 6.6% rally in January. In fact the 12 listed are the only 12 that are positive year to date as of 1/31 among the 33 holdings.
12 Top Performing Consumer Staples Stocks in January
12. The Kroger Co. (NYSE:KR)
Year to Date Performance as of January 31: 0.11%
Number of Hedge Fund Holders: 49
The Kroger Co. (NYSE:KR) is a leading grocery chain whose stock has increased by around 0.11% this year as of January 31. Although 0.11% isn’t very good, the performance nevertheless ranks the stock #12 on our list of 12 Top Performing Consumer Staples Stocks in January given many other stocks in the sector are lower year to date.
The Kroger Co. (NYSE:KR) is currently trying to get regulatory approval to complete its purchase of Albertsons which would give the company more scale and bargaining power if the deal successfully closes. Currently, the companies hope the merger will successfully complete in 2024.
Alongside The Estee Lauder Companies Inc. (NYSE:EL), Lamb Weston Holdings, Inc. (NYSE:LW), and Costco Wholesale Corporation (NASDAQ:COST), The Kroger Co. (NYSE:KR) is a top performing consumer staple in January.
11. Church & Dwight Co., Inc. (NYSE:CHD)
Year to Date Performance as of January 31: 0.31%
Number of Hedge Fund Holders: 40
Church & Dwight Co., Inc. (NYSE:CHD) is a leading consumer staple with a portfolio of well known brands such as Arm & Hammer and OxiClean. While Church & Dwight Co., Inc. (NYSE:CHD) shares have increased 0.31% in January, they are still down 21.5% in the last year as inflation has been challenging for demand. In Q3, the company’s organic sales declined 0.7% year over year due to a volume decline of 8.5%, partially offset by positive pricing of 7.8%. If inflation normalizes in the long term, however, Church & Dwight Co., Inc. (NYSE:CHD) could have more growth potential.
10. SYSCO Corporation (NYSE:SYY)
Year to Date Performance as of January 31: 1.32%
Number of Hedge Fund Holders: 40
SYSCO Corporation (NYSE:SYY) has rallied 1.32% year to date as of the end of January as the leading food distribution company’s valuation has improved slightly given the higher S&P 500. Considering many investors own the stock for its dividend yield of 2.53%, the stock’s valuation has decreased as interest rates have increased substantially in 2022.
If interest rates normalize in the long term, there’s potential for SYSCO Corporation (NYSE:SYY) to potentially gain a higher valuation if it maintains its earnings growth. When interest rates normalize is up for debate, however, as many think it could be at least several years. SYSCO Corporation (NYSE:SYY) ranks #10 on our list of 12 Top Performing Consumer Staples Stocks in January.
9. Walmart Inc. (NYSE:WMT)
Year to Date Performance as of January 31: 1.47%
Number of Hedge Fund Holders: 68
Leading discount retailer Walmart Inc. (NYSE:WMT) stock has approximately doubled since the beginning of 2013 given the company’s organic growth and shares have rallied 1.47% in the month of January as company has benefited from the rise in inflation in 2022 with more customers shopping at its stores. Although inflation is expected to decrease this year, it is still expected to be higher than normal and that would offer more opportunity for Walmart Inc. (NYSE:WMT) to continue to increase its sales from that route. Of the 920 hedge funds in our database, 68 owned shares of Walmart Inc. (NYSE:WMT) at the end of Q3.
8. Molson Coors Beverage Company (NYSE:TAP)
Year to Date Performance as of January 31: 2.06%
Number of Hedge Fund Holders: 34
Molson Coors Beverage Company (NYSE:TAP) is a leading beer company whose shares have rallied 2.06% in January. For its third quarter, the company’s net sales rose 4% year over year and its adjusted income before income taxes declined 5% year over year. In terms of constant currency, however, net sales increased 7.9% year over year and adjusted income before income taxes rose 0.5% year over year. The rise was Molson Coors Beverage Company (NYSE:TAP)’s sixth consecutive quarter of top line growth on a constant currency basis.
7. Monster Beverage Corporation (NASDAQ:MNST)
Year to Date Performance as of January 31: 2.51%
Number of Hedge Fund Holders: 39
Monster Beverage Corporation (NASDAQ:MNST) has been one of the best performing consumer staples in the last two decades as both the company’s sales and EPS have increased given the company’s strong branding. In January, the leading energy drink maker rallied another 2.51% as the market remains optimistic on the company’s future EPS growth potential. In terms of consensus estimates, analysts estimate Monster Beverage Corporation (NASDAQ:MNST) will earn $2.31 per share in 2022, $3.04 per share in 2023, and $3.59 per share in 2024.
6. Philip Morris International Inc. (NYSE:PM)
Year to Date Performance as of January 31: 2.99%
Number of Hedge Fund Holders: 63
Tobacco giant Philip Morris International Inc. (NYSE:PM) shares increased 2.99% in January as the cooling inflation data in the past few months might have caused some capital to rotate back into leading dividend stocks. In terms of its dividend, Philip Morris International Inc. (NYSE:PM) has a dividend yield of around 4.87%. If interest rates don’t rise too much further, leading dividend stocks could be more attractive if they maintain their earnings growth. Just how far interest rates will increase depends on the Federal Reserve and economic data, however, and not current market estimates.
Like Philip Morris International Inc. (NYSE:PM), The Estee Lauder Companies Inc. (NYSE:EL), Lamb Weston Holdings, Inc. (NYSE:LW), and Costco Wholesale Corporation (NASDAQ:COST) are among the top performing consumer staple stocks in January.
Click to continue reading and see 5 Top Performing Consumer Staples Stocks in January.
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Disclosure: None. 12 Top Performing Consumer Staples Stocks in January is originally published on Insider Monkey.
