The Consumer Staples Sector is comprised of companies that sell products such as food, beverages, tobacco, and regularly used household items. These are the types of items that consumers are unable or unwilling to stop using in their everyday lives regardless of economic conditions.
People are generally quicker to cut out trips to their local fast-food restaurant than they are to stop buying groceries from the super market. So while this sector is similar to the consumer discretionary sector in that it relies on the spending of consumers for profits, it is generally less volatile and less directly impacted by economic conditions due to the “stickiness” of the products sold.
Some of the longest dividend growth streaks in the market come from companies in the sector. For example, Coca-Cola $KO, Colgate-Palmolive $CL, Hormel Foods $HRL, and Proctor & Gamble $PG are all companies that have produced dividend growth streaks of 50 years or longer. Meanwhile, Altria Group $MO, Archer-Daniels-Midland $ADM, Kimberly-Clark Corp. $KMB, PepsiCo $PEP, Sysco Corp. $SYY, Walgreens Boots Alliance $WBA, and Wal-Mart Stores $WMT have increased dividend payouts for at least 40 consecutive years.
Due to the consistency of earnings through both good times and bad, I consider the Consumer Staples, along with Utilities and Healthcare, as one of the must-have core sectors of a diversified dividend growth portfolio.
For your reference, here is my current list of the top stocks in the Consumer Staples Sector.
Here is a link for a PDF of the watch list.
For those interested in my previous writings on the sector, here are some articles from Seeking Alpha where I selected my Top Ten Lists at then-current prices. Additionally, those articles provide my dividend growth projections based on payout ratios and expected earnings growth rates for the different companies.
July 21, 2016:
September 4, 2015:
Return to the Watch Lists.