Top 7 Consumer Staples Stocks: July 2024

High inflation might be a long-term issue, leading some consumers to rethink nonessential purchases. However, consumer staples remain essential, even when the consumer price index (CPI) is soaring, people still need to buy groceries.

Consumer staples stocks are shares of publicly-traded companies that cater to basic needs such as food, household products like toothpaste, and essential clothing and furniture.

The distinction between consumer staples stocks and consumer discretionary stocks, which offer luxury items like designer clothes and high-end furniture, can sometimes be blurred. Many retailers operate in both sectors simultaneously.

However, fundamentally, consumer staples stocks are companies that derive a significant portion of their revenue from selling essential items that people cannot do without. Experts suggest that these stocks may be more resilient to inflation compared to other sectors.

“During times of widespread inflation, core industries like food and medicine tend to perform better as they are relatively inflation-proof. People will always need to eat and seek medical attention,” explains Satoru Asato, a certified financial planner based in Minneapolis.

Here is a list of the seven top-performing consumer staples stocks in the S&P 500 index ranked by their one-year returns.

Investors may find individual consumer staples stocks appealing, as many offer dividends, and some have outperformed the S&P 500 index in the past year.

Alternatively, for those seeking exposure to consumer staples stocks as a hedge against inflation, investing in a consumer staples ETF that includes a variety of such stocks simultaneously could be a more diversified approach.