What are the biggest stocks in the consumer staples sector?
Some of the big names in the sector include Procter & Gamble Co. ( PG ), Coca-Cola Co. ( KO ), and General Mills Inc. ( GIS ). Consumer staples stocks, as represented by the Consumer Staples Select Sector SPDR ETF ( XLP ), have significantly underperformed the broader market over the past year.
What is the difference between consumer discretionary stocks and consumer staples?
The consumer discretionary segment is far larger than the $3.7 trillion of stocks that comprise consumer staples, but that gap has a lot to do with the fact that markets have been in a long period of expansion. Discretionary stocks tend to fare better during boom times, while consumer staples hold up particularly well during downturns.
What is the consumer staple sector?
The consumer staples sector is comprised of companies that produce and sell items considered essential for everyday use. Consumer staples products include household goods, food, beverages, hygiene products, and other items that individuals are either unwilling or unable to eliminate from their budgets even in times of financial trouble.
What is a consumer goods industry?
The industry covers both the manufacturers of these products and the retailers that sell them to the public. These stocks differ from consumer discretionary stocks, which involve products that are very sensitive to moves in the wider economy.
What is a discretionary stock?
Consumer discretionary stocks are those of companies that provide a certain type of goods and services to customers.
What stocks are in consumer services sector?
5 Best Consumer Services Stocks to BuyAmazon.com (NASDAQ: AMZN) With a market cap of more than $1.84 trillion, Amazon.com is one of the largest companies in the world. ... McDonald's (NYSE: MCD) ... Costco (NASDAQ: COST) ... Walmart (NYSE: WMT) ... 5. Walt Disney (NYSE: DIS)
What are examples of cyclical stocks?
Cyclical stocks represent companies that make or sell discretionary items and services that are in demand when the economy is doing well. They include restaurants, hotel chains, airlines, furniture, high-end clothing retailers, and automobile manufacturers.
What's a cyclical stock?
What Is a Cyclical Stock? A cyclical stock is a stock that's price is affected by macroeconomic or systematic changes in the overall economy. Cyclical stocks are known for following the cycles of an economy through expansion, peak, recession, and recovery.
What is a consumer stock?
Consumer staple stocks represent companies that are noncyclical because they produce or sell goods or services that are always in demand.
What are examples of consumer discretionary stocks?
Understanding consumer discretionary stocks Consumer electronics manufacturers. Apparel and luxury goods companies. Retailers of various kinds, including department stores, home-improvement retailers, electronics retailers, home furnishers, and apparel stores.
What is a speculative stock?
A speculative stock is a stock that a trader uses to speculate. The fundamentals of the stock do not show an apparent strength or sustainable business model, leading it to be viewed as very risky and trade at a comparatively low price, although the trader is hopeful that this will one day change.
What are some examples of defensive stocks?
Utilities. Water, gas, and electric utilities are examples of defensive stocks because people need them during all phases of the business cycle. Utility companies also get another benefit from a slower economic environment because interest rates tend to be lower.
Which sectors are cyclical and defensive?
The Cyclical super sector has four sectors: Basic Materials, Consumer Cyclical, Financial Services, and Real Estate. The Defensive super sector has three sectors: Consumer Defensive, Healthcare, and Utilities. The Sensitive super sector also has four sectors: Communication Services, Energy, Industrials, and Technology.
What is a secular stock?
A stock is secular when the associated company earnings remain constant regardless of other trends occurring within the market. Companies are often secular when the primary business relates to consumer staples or products that most households consistently use.
What is a defensive stock?
Defensive stocks are stocks that are considered safer. They might not offer the same opportunity for massive gains that more aggressive stocks do, but they come from sectors like consumer staples and healthcare that are expected to perform in essentially any economic conditions.
What is a non cyclical stock?
Non-Cyclical stocks are those stocks that outperform their industry in the stock market despite the economic instability. These are also called defensive stocks as they are not majorly impacted by economic or cyclic changes.
What are the most important things for investors to know about each of these consumer discretionary giants?
Here are some important things for investors to know about each of these consumer discretionary giants. 1. Amazon.com. Amazon has come a long way since CEO Jeff Bezos launched a tiny website in the late '90s with ambitions to disrupt the book industry.
What is consumer discretionary stock?
A consumer discretionary stock is a business that markets goods or services to people with money to spend over and above their baseline needs. Put another way, it's a company that deliveries luxuries or products that aren't considered essential to a household's monthly budget.
What is discretionary purchase?
Discretionary purchases, on the other hand, involve categories such as travel, home improvements, and eating out. Basically, if it's something that you'd cut out of your budget during tough economic times, it's discretionary.
What is consumer spending?
Consumer spending powers most economic growth in the U.S. economy, and so companies that operate in this segment can see long periods of rising sales. Their often-premium services command high prices, too, and that fact can translate directly into robust earnings growth.
Which companies have targeted the same niches as Nike?
Many companies, including lululemon athletica and Under Armour, have targeted the same consumer niches as Nike. However, as long as the company maintains its innovative lead, its competitive advantages make it difficult to take away any of its market share. 5. Starbucks.
Is McDonald's a brutal company?
McDonald's. The restaurant industry is famously brutal, with a sky-high failure rate, razor-thin profit margins, and shifting consumer tastes that always threaten to crush a given business. Yet McDonald's has parried these challenges as it captured, and defended, the fast-food crown over the last few decades.
What is common stock?
Common stock represents partial ownership in a company, with shareholders getting the right to receive a proportional share of the value of any remaining assets if the company gets dissolved.
How to distinguish domestic and international stocks?
Domestic stocks and international stocks. You can categorize stocks by where they're located. For purposes of distinguishing domestic U.S. stocks from international stocks, most investors look at the location of the company's official headquarters.
What is considered a large cap?
There's no precise line that separates these categories from each other. However, one often-used rule is that stocks with market capitalizations of $10 billion or more are treated as large-caps, with stocks having market caps between $2 billion and $10 billion qualifying as mid-caps and stocks with market caps below $2 billion getting treated as ...
Why are cyclical stocks important?
Cyclical stocks include shares of companies in industries like manufacturing, travel, and luxury goods, because an economic downturn can take away customers' ability to make major purchases quickly. When economies are strong, however, a rush of demand can make these companies rebound sharply.
How does preferred stock work?
Preferred stock works differently, as it gives shareholders a preference over common shareholders to get back a certain amount of money if the company dissolves. Preferred shareholders also have the right to receive dividend payments before common shareholders do.
What is safe stock?
Safe stocks. Safe stocks are stocks whose share prices make relatively small movements up and down compared with the overall stock market. Also known as low-volatility stocks, safe stocks typically operate in industries that aren't as sensitive to changing economic conditions.
What are cyclical stocks?
National economies tend to follow cycles of expansion and contraction, with periods of prosperity and recession. Certain businesses have greater exposure to broad business cycles, and investors therefore refer to them as cyclical stocks.
What are consumer staples?
The main classes of consumer staples are food, beverages, home and personal care, alcohol, and tobacco. Product examples include toothpaste, soda, shampoo, toilet paper, and laundry detergent. The industry covers both the manufacturers of these products and the retailers that sell them to the public.
How many companies are in the S&P 500?
There are 33 companies that make up the S&P 500 consumer staples sector, and they span industries from beverage manufacturers to supermarket chains to tobacco giants.
What is the biggest retailer in the world?
Walmart . Walmart is the world's biggest retailer, handling more than half a trillion dollars of annual revenue. Consumers shop in its supercenters and neighborhood markets to fill their grocery needs and to stock up on other consumer staples like cleaning and pet supplies, beauty aids, and baby products.
When did Costco start?
Costco has come a long way since its founding in the early 80s, when the warehouse club retailing model was just getting started. From nine locations topping $1 billion of annual sales in 1984, the company is now the second-largest retailer on the market, responsible for more than $150 billion of revenue each year.
Is Coca Cola a global company?
Coca-Cola. The scale of Coca-Cola's business is hard to overstate. It not only markets many of the world's biggest beverage franchises (e.g., Coke, Sprite, Dasani, Powerade) but also maintains a global distribution network that's essentially impossible to challenge.
What is consumer discretionary?
The consumer discretionary sector is in that second category -- the goods and services that people spend money on when they have a little extra cash available. Unlike consumer staples companies -- which make necessities -- consumer discretionary stocks tend to do well when the economy is strong, and poorly when times are tough.
How many stores does TJX have?
The company's business has generated wide profit margins and solid growth over the years, and the company plans to expand to more than 6,000 stores globally, up from about 4,500 today. Though TJX took a hit during the pandemic like other discretionary retailers, the company managed to produce a slim profit in 2020.
What is Nike's business model?
The strength of Nike's business model stems from its use of celebrity endorsements, tying the success of high-profile athletes to the company's products.
Does Nike have a digital ecosystem?
Nike has built a strong digital ecosystem around apps like SNKRS and the Nike Training Club, which has buffered much of the impact of the crisis. Even as revenue growth has been sluggish during the pandemic, Nike has delivered solid profits. 2. Starbucks.
Is consumer discretionary stock cyclical?
Consumer discretionary stock prices tend to rise and fall with the overall economy, making them cyclical stocks. Although the COVID-19 pandemic has created unprecedented challenges for many consumer discretionary companies, with the economy reopening, investors have a unique opportunity in the sector. Focusing on well-known brands and industry ...
BG is top for value and growth, and ACI is top for momentum
Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
Best Value Consumer Staples Stocks
These are the consumer staples stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows that you’re paying less for each dollar of profit generated.
Fastest-Growing Consumer Staples Stocks
These are the top consumer staples stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company.
Consumer Staples Stocks with the Most Momentum
These are the consumer staples stocks that had the highest total return over the past 12 months.
What is Endeavor Group?
Endeavor Group Holdings, Inc. operates as an entertainment, sports, and content company in the United States, the United Kingdom, and internationally. It operates in three segments: Owned Sports Properties, Events, Experiences & Rights, and Representation. The Owned Sports Properties segment operates a portfolio of sports properties, including Ultimate Fighting Championship, Professional Bull Rider, and Euroleague that license broadcast and other intellectual property rights and operate exclusive live events. The Events, Experiences & Rights segment provides services to a portfolio of live events, including sporting events, fashion, art fairs and music, culinary, and lifestyle festivals. This segment also owns and operates the IMG Academy, an academic and sports training institution; and produces and distributes sports video programming. The Representation segment offers services to a diverse group of talent across entertainment, sports, and fashion, such as actors, directors, writers, athletes, models, musicians, and other artists in various mediums comprising film, television, art, books, and live events. This segment provides brand strategy, marketing, advertising, public relations, analytics, digital, activation, and experiential services to corporate and other clients; intellectual property licensing services to a portfolio of entertainment, sports and consumer product brands; and content development, production, financing, sales, and advisory services for television properties, documentaries, feature films, and podcasts. The company was founded in 1898 and is headquartered in Beverly Hills, California.
What is Comcast Corporation?
Comcast Corporation operates as a media and technology company worldwide. It operates through Cable Communications, Cable Networks, Broadcast Television, Filmed Entertainment, Theme Parks, and Sky segments. The Cable Communications segment offers cable services, including high-speed Internet, video, voice, wireless, and security and automation services to residential and business customers under the Xfinity brand, as well as sells advertising. The Cable Networks segment operates national cable networks that provide various entertainment, news and information, and sports content; regional sports and news networks; international cable networks; and various digital properties, including brand-aligned Websites, as well as engages in the cable television studio production operations. The Broadcast Television segment operates NBC and Telemundo broadcast networks, NBC and Telemundo local broadcast television stations, broadcast television studio production operations, and various digital properties. The Filmed Entertainment segment produces, acquires, markets, and distributes filmed entertainment under the Universal Pictures, Illumination, DreamWorks Animation, and Focus Features names. It also develops, produces, and licenses stage plays; and distributes filmed entertainment produced by third parties. The Theme Parks segment operates Universal theme parks in Orlando, Florida; Hollywood, California; and Osaka, Japan. The Sky segment offers direct-to-consumer services, such as video, high-speed Internet, voice, and wireless phone services; and content services comprising operating entertainment networks, the Sky News broadcast network, and Sky Sports networks. The company also owns the Philadelphia Flyers, as well as the Wells Fargo Center arena in Philadelphia, Pennsylvania; and provides streaming service, such as Peacock. Comcast Corporation was founded in 1963 and is headquartered in Philadelphia, Pennsylvania.
What are Berkshire Hathaway's investments?
Founded by famed investor Warren Buffett, Berkshire Hathaway’s holdings include big investments in industries ranging from technology (Apple), banking (Wells Fargo, Bank of America), airlines (Delta, Southwest), food and beverage (Coca-Cola) and energy (Phillips 66), insurance (GEICO) and even clothing (Fruit of the Loom.)
How much did NBC own in 2017?
It even once owned the television network NBC. With revenues of more than $122 billion in 2017, it’s one of the largest companies in the world and one of the most diversified.
How many people does Honeywell employ?
Honeywell employs more than 130,000 people building everything from aircraft wheels to packaging for pharmaceuticals . The company was founded in 1886 as the maker of the first crude thermostat, and through a series of mergers evolved to become one of the world’s largest aerospace firms.
What is Disney's company?
The Walt Disney Co. [NYSE: DIS] This company is more than just Mickey Mouse. Disney has theme parks and resorts. It has movies, including all of the Marvel superhero and Star Wars franchises. It owns ABC and the ESPN networks and recently launched a direct-to-consumer video service.
What are Honeywell's four segments?
Most of Honeywell’s revenue comes from four segments: Aerospace, home, and building technologies, performance, and materials technology, and safety and productivity solutions. All of these segments have seen steady growth, and the overall company has been a solid stock market performer for decades.
What is Johnson and Johnson?
We think of Johnson & Johnson as the maker of Band-Aids, baby shampoo, and other home health products, but this company does so much more. In addition to producing a wide range of prescription and over-the-counter drugs, it has a robust medical device segment featuring instruments used in major surgeries. Johnson & Johnson also has a sports performance research institute for athletes.
What Are Stock Market Sectors?
Stock market sectors group together public companies that have a lot in common, like when they share similar business models and are active in related industries. These sectors are further subdivided into narrower categories by industry.
The 11 GICS Stock Market Sectors
The energy sector comprises stocks that are involved in extracting, refining and transporting fossil fuels. These can include businesses engaging in the exploration, production, refining and marketing of oil and natural gas, such as oilfield service firms, pipeline and fuel storage companies and companies involved in coal mining.
Stock Market Sectors and Your Portfolio
How should everyday investors leverage sector stocks to expand their own investment portfolio opportunities? Experts advise using as many of the GICS sectors as possible and spreading assets around to diversify their holdings and help protect their investing dollars from risk.