These are the 5 Best Consumer Staples stocks to buy in April 2024, as per Wall Street analysts. Consumer staples are essential items that people buy for their everyday living and are less sensitive to economic cycles and macro factors. Consumer staples companies include manufacturers and distributors of food, beverages, household, and personal hygiene products.
The consumer staples sector is considered a pure defensive play. The companies in this sector are large, well-established players, which may not boast very high growth rates or earnings potential. Nonetheless, they usually have stable year-over-year revenue growth, earn steady profits, their stocks are less volatile, and generally pay dividends. With this background in mind, let us look at the five best consumer staples stocks that analysts favor.
#1 Walmart (NYSE:WMT)
Walmart is the world’s largest retailer offering groceries and other merchandise at everyday low prices through both offline and online channels. Walmart also has a membership-only warehouse, called Sam’s Club, which offers benefits like free shipping, savings on medications, and further discounts.
Walmart pays a regular quarterly dividend of $0.21 per share, reflecting a yield of 1.25%. In the past year, WMT stock has gained 19.3%.
In Fiscal 2024, Walmart’s revenues grew 6% and adjusted earnings per share (EPS) rose 5.7% compared to FY22. For Fiscal 2025, WMT projects sales growth in the range of 3% to 4% (constant currency). It expects adjusted EPS to be between $6.70 and $7.12 (pre-split). The company undertook a 3-for-1 forward stock split on February 23, 2024, to encourage associates to participate in Walmart’s Associate Stock Purchase Plan. Walmart also announced the acquisition of Vizio (NYSE:VZIO) to accelerate its Walmart Connect business in the U.S.
Is Walmart Stock a Buy or Sell?
With 25 Buys and three Hold ratings, WMT stock has a Strong Buy consensus rating on TipRanks. The average Walmart price target of $65.73 implies 9.8% upside potential from current levels.
#2 Colgate-Palmolive (NYSE:CL)
Colgate-Palmolive is a multinational consumer goods company that offers household, personal care, oral care, health care, and veterinary products. The Colgate maker pays a quarterly dividend of $0.50 per share, reflecting a yield of 2.18% compared to the sector average of 2.13%.
In FY23, net sales increased 8.5% while diluted EPS jumped 30% compared to the prior year. The company guided for Fiscal 2024 net sales to grow between 1% and 4%. Additionally, CL projects gross profit margin expansion, accelerated advertising investment, and double-digit EPS growth in FY24. In the past year, CL stock has gained nearly 17%.
Is Colgate-Palmolive a Good Stock to Buy?
On TipRanks, CL stock commands a Strong Buy consensus rating based on 13 Buys and four Hold ratings. The average Colgate-Palmolive price target of $91.63 implies 4.3% upside potential from current levels.
#3 Costco Wholesale (NASDAQ:COST)
Membership-only warehouse club operator Costco Wholesale needs no introduction. The big-box retailer sells everything from groceries to appliances to auto supplies, household needs, and apparel at discounted prices. Costco pays a regular quarterly dividend of $1.02 per share, reflecting an above-sector average yield of 2.67%.
Costco earns annual fees from members, so it is important for the company to keep opening more stores and enhancing its offerings to attract more members. Costco is focusing on increasing its e-commerce sales (an important growth driver) by delivering a seamless shopping experience and efficient delivery services. In FY23, Costco had a 90% global membership renewal rate.
Coming to recent results, the company’s net sales rose 5.7% year-over-year in Q2 FY24, while diluted EPS increased 19% to $3.92 per share.
Is Costco Stock a Buy, Sell, or Hold?
COST stock has a Strong Buy consensus rating on TipRanks, backed by 20 Buys and six Hold ratings. The average Costco Wholesale price target of $777.08 implies 8.9% upside potential from current levels.
#4 Constellation Brands (NYSE:STZ)
Constellation Brands is a global producer and marketer of well-known beer, wine, and spirits, with over 100 brands in its portfolio. STZ pays a quarterly dividend of $0.89 per share, representing a current yield of 1.31%.
The Corona beer maker is set to report its Q4 Fiscal 2024 results on April 11. The Street expects STZ to post adjusted EPS of $2.11 on net sales of $2.10 billion. In Q4 FY23, Constellation Brands reported adjusted EPS of $1.98 on net sales of $2 billion.
Ahead of the results, several analysts have reiterated their Buy views on STZ and some have even raised their price targets on the expected solid performance of the company’s Beer segment.
What is the Price Target for Constellation Brands?
On TipRanks, the average Constellation Brands price target is $297.73, implying 12.1% upside potential. Also, STZ stock commands a Strong Buy consensus rating based on 14 Buys and two Hold ratings. In the past year, STZ shares have gained 18.3%.
#5 Mondelez International (NASDAQ:MDLZ)
Mondelez is one of the world’s largest snacking companies, having an extensive portfolio of biscuits, chocolates, candies, cheese, groceries, and beverages. MDLZ boasts an above-average dividend yield of 2.31%, paying a quarterly dividend of $0.42 per share.
Mondelez is expected to report its Q1 FY24 results soon. The Street expects MDLZ to post adjusted EPS of $0.89 on net revenue of $9.2 billion. In the prior year period, MDLZ posted adjusted EPS of $0.89 on net revenue of $9.17 billion. The company is struggling as cocoa prices have remained elevated in an inflationary environment. Even so, MDLZ has been able to pass on some of these costs to the customers without sacrificing the sales volumes.
Is MDLZ Stock a Good Buy?
With 17 Buys versus one Hold rating, MDLZ commands a Strong Buy consensus rating on TipRanks. The average Mondelez International price target of $83.47 implies 22.8% upside potential from current levels. In the past year, MDLZ shares have lost 3.6%.
Ending Thoughts
Investing in consumer staples stocks comes with a host of advantages, including stable performance irrespective of the broader macro environment. Moreover, these companies usually have been in business for years and command a large market share. Plus, they often pay healthy dividends. All these factors, coupled with analysts’ highly optimistic views, make the aforementioned five consumer staples stocks worth considering in April 2024.
