Should investors buy these consumer staples stocks in May 2022?
As inflation continues to weigh on consumers, fears of a possible recession are mounting. On top of that, with the continued volatility in the stock market, investors may be looking to take the safest route in terms of their investments. As such, more resilient and stable sectors of the stock market, such as consumer staples stocks, may be worth watching at this time. Basic consumer goods consist of essential products used by consumers. This includes food and beverages, household items and hygiene products. Despite high inflation forcing consumers to cut spending, these essentials will still have a place in consumers’ baskets. Therefore, demand will always be there for basic consumer goods, regardless of how the economy performs.
A solid choice of consumer staples right now could be Procter & Gamble (NYSE:PG). The company recently released its quarterly financial statements with strong sales across the board. On top of that, it also raised its revenue growth outlook for the year. Somewhere else, The Clorox Company (NYSE: CLX) also reported quarterly performance above earnings and revenue estimates. “We saw continued strong demand for our products this quarter and delivered sequential gross margin improvement in a volatile and challenging environmentsaid CEO Linda Rendle. That being said, here are five basic consumer stocks to watch on the stock exchange today.
Consumer Staples Stocks to Buy [Or Sell] In May 2022
Starting our list today is Estee Lauder (EL). It is a multinational manufacturer and marketer of premium skin care, makeup, fragrance and hair care products. The company is a global leader in prestige beauty, a vibrant and dynamic industry that benefits from favorable demographic trends. EL has a portfolio of famous brands such as Clinique, Aveda, Bobby Brown and Jo Malone among many others.
Yesterday, EL released its third quarter financial statements for fiscal 2022. Diving into revenue, the company reported net revenue of $4.25 billion for the quarter, a 10% increase in income compared to the previous year. In addition, its organic net sales also increased by 9%. Next to that, net income for the quarter was $558 million, up 22% from $456 million in 2021. With that, earnings per share was $1.90 , up 17% year-over-year and beating Wall Street estimates of $1.67. And on that note, are you going to buy EL stock?
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Archer-Daniels-Midland, commonly referred to as ADM, is an agricultural origination and processing company. Its main objective is sustainable human and animal nutrition. The company does not own any farms. Instead, it works with producers, supporting them with innovative services and technologies. It takes natural products and transforms them into food staples, sustainable, renewable and industrial products. Over the past year, ADM’s stock has increased by about 40%.
Last week the company released its financial statements for the first quarter of the year. Starting with revenue, ADM reported revenue of $23.65 billion for the quarter. That’s a nice 25% increase in revenue from last year’s $18.9 billion. Moving on to earnings, the company raked in a net profit of $1.05 billion, a steep 53% increase from $689 million last year. Given this quarter’s strong results, should you invest in ADM shares?
Coca Cola is a beverage company that sells its products in more than 200 countries and territories. Its multiple billion-dollar brands are spread across multiple beverage categories around the world. Namely, these include soft drink brands such as Coca-Cola, Sprite, and Fanta, to name a few. Besides soft drinks, the company also offers sports, coffee and tea brands. For an idea of scale, the company has over 700,000 employees worldwide.
On April 25, the company announced its first quarter financial results. Coca-Cola reported net revenue of $10.49 billion, an increase of 16% from $9.02 billion a year earlier. As for its profits, the company brought in $2.78 billion. This represents a 24% increase over last year’s $2.25 billion. Additionally, earnings per share improved to $0.64, up 23% from the prior year quarter. Overall, the company was able to beat analyst estimates for the quarter, largely due to inflation-fueled price increases. As such, should you keep an eye on KO stock?
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Another notable consumer staple stock would be PepsiCo. All in all, most of us would be familiar with the global food company’s offerings. This ranges from its famous beverage lines such as Pepsi-Cola and Gatorade to food brands such as Frito-Lay and Quaker. In fact, the company estimates that its products are consumed more than a billion times a day in more than 200 countries around the world. Given PepsiCo’s impressive reach in the market, I can understand why investors may be interested in PEP stock.
Last Tuesday, the company released its first-quarter 2022 results. Plunging, net revenue rose 9.3% year-over-year to $16.2 billion. Along with that, PepsiCo’s organic revenue grew 13.7% in the quarter. As for earnings, the company posted net income of $4.26 billion, a massive increase from $1.71 billion in 2021. For the year, PepsiCo expects to generate 8% organic revenue growth, up from its previous guidance of 6%. . All things considered, do you like PEP stocks?
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Last but not least, we have Kimberly Clark, a multinational personal care company. For the most part, it primarily manufactures paper-based consumer products. This would include the likes of toilet paper products and surgical and medical instruments. Kimberly-Clark has a portfolio of famous household brands such as Kleenex, Kotex, Scott and Huggies to name a few. And for an idea of scale, the company has over 40,000 employees.
On April 22, the company released its financial statements for the first quarter of 2022. Plunging, the personal care company reported net revenue of $5.1 billion, up 7% from the period of the previous year. As for earnings, Kimberly-Clark reported earnings of $1.55 per share for the first quarter. For 2022, he expects net sales to increase by 2% to 4%. Adjusted earnings per share are expected to be between $5.60 and $6. Given the earnings report, should you try KMB shares?
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