Are These The Best Consumer Staples Stocks To Buy In December 2021?
People will always need staple goods, and this bodes well for consumer staples stocks in the stock market. Staple goods include household necessities such as cooking supplies, fresh fruits, and other items that are consumed or used regularly. In other words, staple goods are items that consumers will continue purchasing. Not to mention, the recent downturn in stocks could have investors eyeing consumer staples stocks now. After all, most would consider them more defensive plays that offer some stability during the current Omicron-related volatility now. What’s more, many of the stocks in this sector are also dividend stocks. Also, the rapid rise of e-commerce would indicate that consumers will find other ways to shop if going to physical stores becomes difficult.
Consumer staples giant Procter & Gamble (NYSE: PG) for example reported that its net sales rose 5% year-over-year to $20.34 billion in its latest quarter. This is despite the ongoing pandemic and with many economies around the world just reopening after the year’s various restrictions. Elsewhere food processing firms such as Campbell Soup (NYSE: CPB) could be worth noting as well. This would especially be the case as its offerings boast long shelf lives, ideal for consumers looking to stock up for the winter. With consumers still needing staple goods despite rising prices, could consumer staples stocks be worth watching in the stock market today?
Top Consumer Staples Stocks To Watch Right Now
- Kroger Co. (NYSE: KR)
- Starbucks Corporation (NASDAQ: SBUX)
- Crocs, Inc. (NASDAQ: CROX)
- Costco Wholesale Corporation (NASDAQ: COST)
Kroger
Among the consumer staple giants to note now would be Kroger. After all, the regional grocery chain operator is here to cater to every home cook’s pandemic needs. Kroger’s CEO Rodney McMullen said the company is now offering a larger array of fresh foods in its stores. The century-old grocery chain has always been fast to adapt to consumers’ shopping behavior. It recently announced its expansion into Florida without building any brick-and-mortar stores. It instead will go into e-commerce for the Florida market, with an automated warehouse and delivery persons. As said before, Kroger responds to consumers’ behaviors; a smart play as consumers are increasingly shopping online.
Kroger’s third fiscal quarter results released yesterday show that this strategy works for the company. Its sales rose 7.2% year-over-year to $31.86 billion in the latest quarter. Additionally, Kroger also reported a $483 million net profit for its third quarter. Overall, McMullen is positive that the business will emerge stronger through the pandemic and is well-positioned to grow beyond 2021. On this positive note, could KR stock be one of the top consumer staples stocks to watch in the stock market?
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Starbucks
Who hasn’t heard of Starbucks? The coffeehouse chain is the world’s largest, serving an average of about 4 billion cups a year globally. Despite its decades-old presence, the chain works hard on staying current. It recently collaborated with Taylor Swift to introduce her favorite grande-sized caramel nonfat latte order at its stores. The collaboration was made in conjunction with the popular singer-songwriter’s release of an updated version of her Red album. The chain also promised to raise wages for its US baristas at least twice in 2022. This will bring their pay floor to $17 an hour by summer next year, from about $14 an hour at present.
Starbucks’ latest fiscal quarter results showed that the global coffee chain is weathering the Covid-19 storm well. The company recorded a 31% increase in revenue year-over-year to $8.1 billion. Global same-store sales climbed 17% year-over-year, while US same-store sales increased by 22% in the same quarter. The company’s loyalty program reported 24.8 million active members, up 28% year-over-year. It also declared a cash dividend of $0.49 per share, payable on February 25, 2022. With such strong growth potential, could SBUX stock be a staple in your portfolio?
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Crocs
If you think Crocs is not a consumer staple, think again. Crocs specializes in the sale and design of casual lifestyle footwear and accessories. And casual wear has been the to-go outfit for many during this pandemic. Given the latest headlines on emerging Covid variants, we could, in theory, see a resurgence in consumer interest towards Crocs. Like many consumer brands, Crocs is moving on with the times by strengthening its digital presence. To support this ambition, the footwear company launched its app this year as part of its digital strategy. The app leverages virtual reality (VR) to offer a new dimension to online shopping.
As a popular pandemic wardrobe staple, Crocs’ third-quarter earnings show promise. The company posted $625.9 million in revenue, a rise of 73% year-over-year. Out of this, digital sales climbed 68.9% during the quarter, accounting for 36.8% of total sales. And Crocs is serious about its digital ambition. Accordingly, Crocs is strengthening its digital sales component in line with its plans to achieve $5 billion in sales by 2026. Seeing how Crocs is moving on with the times, could CROX stock make a beeline into your watchlist?
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Costco Wholesale
Costco Wholesale is a membership-only big-box retail store chain which has been going strong during the pandemic. This could be due to customers making more bulk purchases to cut down on grocery trips. Despite being affected by global supply chain issues and having to raise prices, the company continues to power on.
Evidently, Costco’s fourth fiscal quarter results reflect its pandemic popularity. The company recorded an increase in net sales by 17.5% year-over-year to $61.44 billion. This is the first time the company recorded $60 billion in quarterly sales since its founding. Membership grew to 61.7 million households in the last fiscal quarter. Meanwhile, for the full fiscal year, Costco sales grew 17.7% to $192.05 billion from $163.22 billion in the 2020 fiscal year. This, according to FactSet, was the largest year-over-year growth for Costco since its 1992 fiscal year, when sales grew 19.6%. All in all, the question remains on whether Costco can sustain this momentum amidst the current market conditions. With this in mind, would you be buying COST stock?
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
