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Highlights
- Consumer staples include foods and beverages, household goods, hygiene products, alcohol and tobacco.
- The S&P/ ASX 200 consumer staples index has gained nearly 6.70% in the past 52 weeks.
- The demand for consumer staples always remains relatively constant, regardless of their prices.
The term consumer staples represents a range of essential products used by customers. This group includes things like foods and beverages, household goods, hygiene products, alcohol, and tobacco.
The S&P/ASX 200 consumer staples index has gained nearly 6.70%, slightly higher than the S&P/ASX 200 benchmark, which has gained nearly 5.41% in the same period. This might be because food comes under consumer staples which are essential products and always in demand.
Consumer staples are resistant to business cycles. Their demand always remains relatively constant, regardless of their prices.
This article will talk about consumer staples from three different business backgrounds that have provided the highest return in the past 52 weeks period.
GrainCorp has a leading market in East Coast Australia (ECA) related to grain and edible oils. It is the most extensive grain storage and handling business in ECA and the No. 1 edible oil processor and oilseed crusher in Australia and New Zealand.
The company delivered strong outcomes in FY21 (period ended 30 Sep 2021). It reported a nearly 206% hike in underlying EBITDA and an underlying NPAT of AU$139 million. The total dividend summed up to 18 cents per share in FY21. It has provided a massive return of nearly 100% to its investors in the last 52 weeks.
The company is improving ROIC and ‘through-the-cycle’ EBITDA through asset utilisation and operating efficiencies. It aims to uplift its EBITDA by AU$40 million by 2023-24.
Stock information: The closing price of GNC as of Monday was AU$8.730 with a gain of nearly 3.4%
Lark Distilling Co. Ltd (ASX: LRK)
Image source: © Ersler | Megapixl.com
Lark specialises in the manufacture and distribution of whiskey and gin with over 30 years of business. Recently, LRK was nominated as one of four distillers for the Worldwide Whisky Producer of the Year award.
The company’s net sales grew by 78% compared to the previous corresponding period (pcp) in the half-year ended 31 Dec 2021. Similarly, its Operating Normalised EBITDA also surged by 130% on pcp. However, the COVID-19 pandemic led to a decline in its gross profit margin by 3.5 ppts. Over the last 12 months, LRK’s share value has increased by nearly 91%.
Lark has a positive outlook for its whisky sales and is expecting approximately 2 million litres of whisky under maturation with an estimated net sales value of AU$430 million by 30 June 2022.
Stock information: Shares of LRK closed on Monday at AU$3.480, gaining 4.19%.
Ridley Corporation Limited (ASX: RIC)
Ridley deals with the production of animal nutrition solutions. It involves milling, marketing and recycling of by-products. The company has been an integral part of Australian agriculture for more than 30 years.
Ridley’s financial highlights in the half year ended 31 Dec 2021.
- Revenue from ordinary activities - up by 8.2%
- Consolidated EBITDA – up by 45.2%
- Net profit after tax – up by 124.4%
Shares of Ridley have provided nearly 47% return to investors in the last 52 weeks.
The company is expecting an increment in EBITDA in the second half compared to pcp as the business is well positioned to grow earnings.
Stock information: RIC gained 1.6% on Monday, closing at AU$ 1.5.
Also read: Bega Cheese (ASX: BGA) warns about price surge amid food inflation
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Aditi Sarkar - Healthcare Analyst (Biotechnology)528 PostsAditi covers content focused on healthcare and food & beverages sectors. She has a post-graduate degree in Genetics and Plant Breeding with Biotechnology as her minor subject. She has two co-authored scientific research publications in peer-reviewed ...
