Amid a backdrop of mounting market uncertainty, many are betting on a potential crash fueled by recession whispers. Others are more hopeful, expecting a soft landing. Regardless, the U.S. Federal Reserve’s chess moves aim for a stable economic touchdown, even if interest rate cuts seem off the table. Hence, for those looking to navigate these uncertain tides, there lies an anchor in the best consumer stocks to buy on the dip.
Navigating the market’s waters became trickier post the stellar first half of 2023; August brought a pause to equities, influenced by China’s economic hiccups, Ukraine’s unrest and mixed corporate earnings. However, consumer stocks, known for their resilience during turbulent times, stand as reliable bulwarks against market storms. With that said, here are three of the most attractive consumer stocks to buy on the dip.
Procter & Gamble (PG)
Procter & Gamble (NYSE:PG) usually makes it to the top of the list of stalwart consumer staples. Housing iconic brands such as Tide, Crest, Gillette and others under its vast umbrella, Procter & Gamble’s portfolio is virtually synonymous with everyday essentials. Globally, consumers place their trust in the firm, fueling a staggering annual sales figure that has blown past the $80 billion mark. That trust was notably evident during the pandemic, as households, in their quest for comfort and hygiene, stockpiled Procter & Gamble offerings.
However, its recent earnings shed light on a curious trend. Though its revenues dipped, the average pricing of its staple products observed a significant 10% spike year-over-year. Moreover, it wasn’t just limited to one or two products; the trend spanned across brand leaders, including Gillette and Bounty. This strategic price elevation played a critical role in Procter & Gamble’s recent financial wins, as it outpaced Wall Street predictions, infusing PG stock with renewed vigor.
Furthermore, the firm continues to ace the dividend game, boasting a staggering 66-year track record of consistent payout growth, yielding 2.46%. Additionally, with a modest 0.30% uptick year-to-date, now might be the opportune moment for investors to seize the stock on a dip.
General Mills (GIS)
Consumer goods giant General Mills (NYSE:GIS) recently made headlines by boosting its quarterly dividend payout for stockholders by an impressive 9%. This increment translates to almost 60 cents per share payout every quarter, propelling GIS stock to a solid 3.60% forward yield.
General Mills’ legacy, characterized by an array of iconic brands, enthralls its global consumer base. With a strong historical performance showcasing strong single-digit sales and profitability metrics, General Mills emerges as an excellent wealth multiplier for its investors. It delivered nearly a 37% return on its stock over the past half-decade, which speaks volumes about its prowess.
Yet, the road hasn’t been without its bumps. Come the end of June, its second-quarter results showed how it grappled with quarterly sales unaligned with Wall Street’s expectations. Consequently, the financial miss nudged the stock southward. However, with its massive portfolio stretching over 100 branded products, the results will likely be a temporary blip.
Few brands exemplify resilience quite like Coca-Cola (NYSE:KO). With a lineage that’s stood the test of time, it’s no wonder this food and beverage titan is one of the top recession-proof stocks. Amidst prevailing economic turbulence, Coca-Cola leveraged its unparalleled brand strength, affecting price hikes that fueled impressive revenue growth.
Delving into the details, the company’s second-quarter results dazzled many. Surpassing analysts’ predictions on revenue and profit fronts while lifting its financial outlook for the year, Coca-Cola once again asserted its market dominance. At a forward earnings multiple of 23.40, KO stock appears attractively priced, particularly when one factors in its consistently strong financial showings, adept pricing strategies and unwavering demand.
With the stock witnessing a 7% dip year-to-date, opportunity beckons. For those seeking a robust blue-chip asset with an illustrious legacy of rewarding shareholders, Coca-Cola emerges as a compelling buy-the-dip prospect.
On the date of publication, Muslim Farooque did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.