Consumer staples are a great niche to invest in. Why? Because when it comes to investing, many times, boring it better. I know investing in razors or hand sanitizer doesn’t sound glamorous or exciting as electric cars, but you have to remember one thing. Not everyone is a potential customer for electric cars.
On the other hand, everyone needs a razor to shave. Everyone needs hand sanitizer and other consumer staples to live their everyday lives. So while these stocks might not get the headlines because their products aren’t popular or sexy, they do provide consistent results. And over the long term, you as an investor can reap the rewards.
So what are some hot consumer staples that you should be investing in? This post will walk you through 3 choices to grow your wealth.
3 Hot Consumer Staples Stocks
#1. Johnson & Johnson (NYSE: JNJ)
I talked about JNJ before and I realize that many investors see it more as a medical play than a consumer staples play. But Johnson & Johnson has a large foothold in the consumer staple sector. Just look at a few of the products they sell:
And that is only a handful of their popular products.
The real reason to invest in this company is the fact that they commit $9 billion annually to research and development. That budget is larger than many corporations are worth. It’s no wonder why JNJ keeps cranking out new products on a regular basis.
And the products are successful too. JNJ has increased organic sales by 5% and earnings by 8%. This is a true long term investment for all investors.
#2. Procter & Gamble (NYSE: PG)
Proctor & Gamble is a powerhouse when it comes to consumer staples. Some of their most popular brands include Pampers, Charmin and Bounty. But they have many more highly recognizable names.
The stock itself had been under pressure for a while. The company got to a point where they weren’t growing as quickly as shareholders would like. In other words, they became too big and there was too much red tape and issues that slowed things down.
The company responded by selling off assets and refocusing its core message and goal. They also are working on becoming more efficient too. They are cutting costs and lowering their inventory turnover rate.
While investors won’t see immediate results in terms of stock price increases, the effects of these initiatives will show up soon enough.
And if that wasn’t enough, the company has gained attention for its aggressive $22 billion dividend and stock repurchase plan it set for this year.
#3. Energizer Holdings (NYSE: ENR)
Energizer is the boring battery company with the bunny that keeps going and going. And if the stock is like their mascot, it too will just keep going and going.
The company recently reported earnings per share that beat the market but missed on revenue estimates. Still the company has beaten estimates ever quarter since the first quarter of 2015.
And the future looks good too. Energizer expects earnings growth for 2017 to be up 18.8% and for 2018 up 7.9%.
They do face some headwinds as there is more competition in the alkaline battery sector, but don’t bet against this company. They have the power to keep impressing with earnings and growth.
Consumer staples are a great place for an investor. The sector is boring, but this just means it doesn’t get caught up in hot money overpricing the stocks. And since everyone always needs these products, the companies here tend to fare better during downturns in the economy.
I feel that these 3 stocks are worth looking into and investing for the long term.
This author has no positions in any stock mentioned and does not plan to open any positions in any stocks mentioned for at least 72 hours after publication of this article.