Consumer staples stocks have long been seen as a safe investment during times of market volatility. In 2023, the bullish case for buying consumer staples was strong due to high demand for their products even in the face of inflation. However, the emergence of artificial intelligence in 2024 shifted investor focus back to the technology sector.
With the Federal Reserve expected to lower interest rates, now may be a good time to consider pivoting back to consumer staples stocks. Instead of viewing them as a hedge against AI, investors may want to see them as a potential growth opportunity.
General Mills (GIS) has faced challenges with a decrease in stock value and increased competition from private label brands. However, a potential reduction in interest rates could benefit the company and its investors.
PepsiCo (PEP) offers growth potential for investors with its diverse portfolio of soft drink and snack brands. Despite facing challenges in 2023, the company has shown consistent revenue and earnings growth, along with a reliable dividend yield.
e.l.f. Beauty (ELF) has seen significant growth in recent years due to its focus on marketing to Gen-Z consumers. The company’s sustainable and affordable skin-care products have resonated with this demographic, leading to impressive stock gains.