The Consumer Staples sector has been performing well this year, with the S&P 500 Consumer Staples Select Sector SPDR (NYSE:XLP) up 7.7% as of Jul 3. Despite not meeting market expectations of a significant increase in consumer spending, the sector has remained stable compared to consumer discretionary stocks.
Stock trading in 2024 has been influenced by concerns about the Fed not lowering rates as promised. However, defensive stocks like consumer staples have gained investor interest due to their ability to withstand market volatility.
While consumer staples may not have the highest earnings growth, they offer low price volatility, reliable profits, dividends, and defensive positioning. The sector has historically experienced minimal disruption.
Inflation has been slowing down over the past few months, which is a positive factor for consumer staples. With consumer sentiment and spending expected to increase, the sector is set to benefit.
Three consumer staples stocks with strong potential are highlighted: Chewy, Inc., Edgewell Personal Care Company, and Arko Corp. These stocks have a Zacks Rank of #1 or #2 and a VGM Score of A or B, indicating their value, growth, and momentum potential. Chewy, Inc. is an e-commerce company with a high expected earnings growth rate. Edgewell Personal Care Company is a global manufacturer of personal care products, while Arko Corp. operates convenience stores in the U.S.