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Top 3 consumer staples stocks to buy ahead of a possible economic downturn

Mircea Vasiu

The Federal Reserve of the United States has voiced its intentions to aggressively raise the funds rate, even at the risk of an economic downturn. So what consumer staples stocks to buy? 

Companies in the consumer staples sector provide goods and services that are a necessity for consumers. Food, beverages, household products, and personal products are just a few examples. 

Consumer staples are favored by investors expecting an economic downturn. Because the goods and services provided by the companies in the sector are a necessity, their stocks tend to be less affected by an economic downturn. 

The Federal Reserve has already raised the interest rate and is preparing to tighten the monetary policy further, even at the risk of affecting economic growth. So what are the best consumer staples stocks to buy ahead of a possible economic slump? 

Here are three names to consider: Procter & Gamble, Kroger, and Colgate-Palmolive.

Procter & Gamble

Procter & Gamble is one of the leading companies part of the consumer staples sector. It sells personal products and is home to one of the strongest brands on the globe. 

As a dividend-paying company, Procter & Gamble increased its annual payout to shareholders in the past 65 consecutive years. Also, the 50-year dividend growth rate is 5.48%. 

Procter & Gamble’s stock price gained over 20% in the past twelve months and is flat YTD. 

Kroger

Kroger is a food retailer in the United States. It operates with a gross profit margin of 22.72%, smaller than the sector median, and its market capitalization exceeds $41 billion. 

Kroger is also a dividend-paying company, with the forward dividend yield reaching 1.48%. Kroger’s stock price gained more than 25% YTD and over 50% in the past twelve months. 

Colgate-Palmolive

Colgate-Palmolive is another representative company active in the consumer staples sector. It sells consumer products, and the stock price is relatively flat in the last twelve months. 

Colgate-Palmolive pays a dividend, too, and the gross profit margin for the past twelve months exceeds the sector median by 74.49%.