When the economy goes through a downturn, people must be more careful about spending their money. Budgets get tighter and luxuries get downgraded or skipped altogether. However, some sectors, like consumer stocks, continue to attract capital during any economic cycle.
People can’t neglect consumer staples. Consumers need food, beverages, home care products and other essentials in good times and bad times. While stocks in this sector can offer more insulation during economic uncertainty, these same picks can also do well in bullish markets. These are some of the top consumer stocks to consider.
Celsius Holdings (CELH)
Celsius Holdings (NASDAQ:CELH) is the hottest sports beverage around. The company regularly releases earnings reports that exhibit high growth rates. For instance, Celsius Holdings’ Q4 2023 report revealed a 95% year-over-year increase in sales. Revenue isn’t the only thing that’s going up. Net income came in at $39.1 million compared to a $28.2 million net loss in the same period last year.
The company has maintained impressive growth rates throughout the year. Full-year 2023 revenue increased by 102% year-over-year while full-year net income flipped from a $198.8 million net loss to a $182.0 million positive net income. The company has a tiny slice of the international market and is expanding in multiple countries. This development should help the company generate robust revenue and long-term net income growth.
The stock has been a reliable outperformer for long-term investors. Shares have gained 17% year-to-date and have surged by 5,300% over the past five years.
Sprouts Farmers Market (SFM)
Sprouts Farmers Market (NASDAQ:SFM) has silently outperformed the stock market with a 33% year-to-date gain and a 210% gain over the past five years. The Arizona-based supermarket chain has a 26 P/E ratio and more than 380 grocery stores spread across the United States.
The latest earnings report highlighted the company’s “continued strength as a leading specialty grocer.” The Q4 report revealed an 8% increase in net sales. Total net sales reached $1.7 billion for the quarter. Sprouts Farmers Market also opened six additional shares in the quarter. Net income jumped by 11% year-over-year to reach $50.1 million.
The grocery chain has a healthy $202 million cash and cash equivalents. Sprouts Farmers Market also repurchased 5.9 million shares in full-year 2023 for a total investment of $203 million. Investors should anticipate a 5.5% to 7.5% net sales growth in 2024. Sprouts Farmers Market also anticipates opening an additional 35 stores.
Walmart (WMT)
Walmart (NYSE:WMT) is the go-to brand for affordable products. It’s a big draw as people feel more financial pressure and want some breathing room in their budgets. The business model continues to attract consumers based on the company’s 5.7% year-over-year revenue growth in Q4 FY24.
Walmart has been giving out dividends for years but decided to hike its annual dividend by 9% this year. That’s the highest increase in over a decade, indicating that Walmart is back to being a dividend growth stock.
The company’s recent acquisition of Vizio should support higher dividends. Vizio will strengthen Walmart’s growing advertising segment, improving the company’s profit margins in the long run. E-commerce sales are gaining traction and exceeded $100 billion in full-year 2024. Pickup & delivery options have been contributing to Walmart’s e-commerce growth.
Walmart stock trades at a 31 P/E ratio and offers a 1.39% dividend yield. Shares are up by 12% year-to-date and have gained 76% over the past five years.
On this date of publication, Marc Guberti held a long position in CELH. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.