Consumer Staples Stocks Worth Buying After a Selloff

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Procter & Gamble, Clorox, and Kenvue are among the standouts in a beaten-down sector. They boast healthy dividends and resilient businesses.

Consumer staples stocks have had a tough run lately amid concerns about rising bond yields, the health of the U.S. consumer, and the introduction of obesity drugs.

Like utilities, another laggard, the staples sector is considered a bond proxy. The 10-year U.S. Treasury note’s yield on Monday touched 5%, its highest level since 2007. The consumer staples stocks in the S&P 500 were yielding 2.9% as of Oct. 20. He and other analysts are also closely following how the U.S. consumer is holding up. “The healthy consumer landscape is beginning to show some fault lines, such as rising credit-card delinquencies,” observes Saira Malik, Nuveen’s chief investment officer, in her most recent weekly note. Says Erin Lash, director of consumer equity research at Morningstar: “The concern, No.

Procter & Gamble even managed to boost its dividend during the early part of the pandemic in 2020, when other large companies were cutting or suspending their payouts. “Procter & Gamble is a fortress, and they are performing and executing exceptionally well right now,” says English. Stable StaplesThese are five consumer staples stocks whose dividends should continue to grow, even in a tougher economy.Note: data as of Oct. 23; E=estimate. *Return since initial public offering on May 3. **Estimates for fiscal 2025, which ends in June. *** Estimate for fiscal 2025, which ends in May.Sethi says there are some good companies in the consumer staples space—and not necessarily ones with high dividend yields—that should do well over time and grow their dividends, as well.

 

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