SYY to KO: 5 inflation-beating consumer staple stocks to watch in Q2 

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Highlights 

  • Coca-Cola Company (NYSE: KO) has a P/E ratio of 28.77 and a dividend yield of 2.72%.
  • Hormel Foods Corp’s (NYSE: HRL) P/E ratio is 31.62, and the dividend yield is 1.94%.
  • Walmart Inc. (NYSE: WMT) has a dividend yield of 1.42% and a P/E ratio of 32.19. 

Defensive stocks have outperformed the benchmark index this year. The S&P 500 Consumer Staple Index rose around 2.5% YTD compared to an 8% decline of the overall Index in the same period. The utility sector also gained over 6% this year.   

The consumer staples companies specialize in food, beverages, household goods, etc., whose demand usually stays stable. Consumer Staple companies also pay dividends. Here we discuss five S&P 500 consumer staples stocks that gave inflation-beating returns YTD.

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 Sysco Corporation (NYSE: SYY)

Closing price on April 14, 2022: US$86.27
Price range in one year: US$89.22 to US$68.05

Houston, Texas-based Sysco is a food-service distributor in the US. It distributes more than 400,000 food and non-food products to restaurants, healthcare facilities, educational institutions, government departments, and the travel and leisure industry.

For the second quarter ended January 1, 2022, the company reported sales of US$16.3 billion compared to US$11.56 billion in the previous year’s corresponding quarter.

Its net income came in at US$167 million or US$0.33 per share diluted compared to US$67.3 million or US$0.13 per share diluted in the same quarter in 2020.

Sysco’s market capitalization is US$43.78 billion. Its P/E ratio is 56.76, and its forward P/E for one year is 27.21. Its dividend yield is 2.17%, with an annualized dividend of US$1.88.

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As of April 15, 2022*

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Coca-Cola Company (NYSE: KO)

Closing price on April 14, 2022: US$65.02
Price range in one year: US$64.87 to US$52.28

It is the largest nonalcoholic beverage company globally. The Atlanta, Georgia-based Coca-Cola owns brands like Coke, Sprite, Fanta, Minute Maid, Costa, etc. 

For the fiscal year ended December 31, 2021, the company generated net operating revenue of US$38.66 billion, a 17% increase YoY compared to US$33.01 billion in fiscal 2020. The revenue growth was driven by a 9% surge in the concentrate sales.

It posted a net income of US$9.77 billion or US$2.25 per share diluted, attributable to its shareholders, compared to US$7.75 billion or US$1.79 per share diluted in the previous fiscal.

Coca-Cola’s market capitalization is US$281.9 billion. Its P/E ratio is 28.77, and its forward P/E for one year is 26.65. Its dividend yield is 2.72%, with an annualized dividend of US$1.76.

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Tyson Foods, Inc. (NYSE: TSN)

Closing price on April 14, 2022: US$95.45
Price range in last one year: US$100.72 to US$69.88

Tyson Foods produces processed chicken, beef, pork, and other protein-based products. Its brands are Jimmy Dean, Ball Park, Sara Lee, Aidells, State Fair, Hillshire Farm, Raised & Rooted, etc. The Springdale, Arkansas-headquartered company sells its products in Canada, Mexico, Brazil, Europe, China, and Japan.

For the first quarter ended January 1, 2022, the company reported sales of US$12.93 billion compared to US$10.46 billion in the previous year's quarter. Its net income came in at US$1.12 billion or US$3.07 per diluted share against US$0.467 billion or US$1.28 per diluted share.  

It will declare its second-quarter results on May 9, 2022.

Tyson has a market capitalization of US$34.6 billion. Its P/E ratio is 9.42, and its forward P/E for one year is 11.0. With an annualized dividend of US$1.84, its dividend yield is 1.95%.

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Hormel Foods Corporation (NYSE: HRL)

Closing price on April 14, 2022: US$53.43
Price range in last one year: US$53.65 to US$40.48

Austin, Minnesota-based Hormel Foods is a protein-focused branded food company. Its brands include Hormel, Spam, Applegate, Wholly Guacamole, Skippy etc. 

Hormel posted a net income attributable to the company of US$239.6 million on net sales of US$3.04 billion for the quarter ended January 30, 2022, compared to a net income of US$222.3 million on net sales of US$2.46 billion in the year-ago period. Its earnings per share diluted were US$0.44 compared to US$0.41 per share diluted in the same period a year ago. 

Hormel has a market capitalization of US$29.12 billion. Its P/E ratio is 31.62, and its forward P/E for one year is 27.54. Its dividend yield is 1.94%, with an annualized dividend of US$1.04.

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Walmart Inc. (NYSE: WMT)

Closing price on April 14, 2022: US$157.08
Price range in last one year: US$158.41 to US$132.01

Bentonville, Arkansas-based Walmart operated over 11,400 stores at the end of fiscal 2021. It is one of the largest US retailers by sales volume. It sells general merchandise and grocery. 

For the fiscal year ended December 31, 2021, the company earned revenue of US$572.7 billion compared to US$559.1 billion in the previous fiscal year. Its net income attributable to the company came in at US$13.7 billion or US$4.87 per diluted share compared to US$13.5 billion or US$4.75 per diluted share in fiscal 2020.

Its market capitalization is US$432.2 billion. Its P/E ratio is 32.19, and its forward P/E for one year is 23.20. Its dividend yield is 1.42%, with an annualized dividend of US$2.24.

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Bottom line:

The current geopolitical tensions, inflationary pressures, and interest rate worries have turned the market mood bearish lately. Historically, the consumer staple stocks managed to remain afloat even during the turbulent times in the market. However, investors should exercise due diligence before investing in the stock market.


 


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