Regarded as defensive investments, consumer staples stocks are generally safe bets in choppy markets. The flip side is that they frequently fall behind growth industries when times are good, and this perception became a reality over the past six months as the sector was down 3.3% while the S&P 500 was up 16.6%.
Despite the lackluster result, a few diamonds in the rough can produce earnings growth no matter what, and we started StockStory to help you find them. On that note, here are two resilient consumer stocks we’ve added to our cart and one we’re steering clear of.
One Consumer Staples Stock to Sell:
B&G Foods (BGS)
Market Cap: $233.3 million
Started as a small grocery store in New York City, B&G Foods (NYSE: BGS) is an American packaged foods company with a diverse portfolio of more than 50 brands.
Why Are We Out on BGS?
- Annual sales declines of 6% for the past three years show its products struggled to connect with the market
- Earnings per share decreased by more than its revenue over the last three years, partly because it diluted shareholders
- 7× net-debt-to-EBITDA ratio makes lenders less willing to extend additional capital, potentially necessitating dilutive equity offerings
At $2.88 per share, B&G Foods trades at 6.3x forward P/E. If you’re considering BGS for your portfolio, see our FREE research report to learn more.
Two Consumer Staples Stocks to Watch:
e.l.f. Beauty (ELF)
Market Cap: $5.96 billion
Short for "eyes, lips, face", e.l.f. Beauty (NYSE: ELF) is a developer of high-quality beauty products at accessible price points.
Why Is ELF Interesting?
- Annual revenue growth of 37.9% over the past three years was outstanding, reflecting market share gains
- Differentiated product offerings are difficult to replicate at scale and result in a best-in-class gross margin of 71.2%
- Free cash flow margin jumped by 5.8 percentage points over the last year, giving the company more resources to pursue growth initiatives, repurchase shares, or pay dividends
e.l.f. Beauty’s stock price of $101.20 implies a valuation ratio of 33.2x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Coca-Cola (KO)
Market Cap: $370.4 billion
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE: KO) is a storied beverage company best known for its flagship soda.
Why Does KO Catch Our Eye?
- Differentiated product offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 61.7%
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 28.8%, and its operating leverage amplified its profits over the last year
- Free cash flow margin expanded by 30.1 percentage points over the last year, providing additional flexibility for investments and share buybacks/dividends
Coca-Cola is trading at $86.22 per share, or 25.6x forward P/E. Is now the time to initiate a position? See for yourself in our full research report, it’s free.
Stocks We Like Even More
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+1,154% between June 2020 and June 2025). Find your next big winner with StockStory today.
