4 Consumer Staple Stocks Likely To Win Big On Q2 Earnings
Zacks Investment Research | Aug 07, 2019 07:35AM ET
Wall Street is reeling under severe volatility injected by heightened trade conflict between the United States and China. Meanwhile, the second-quarter 2019 earnings session is gradually approaching its end. Interestingly, although the pace of earnings growth has declined, overall results are not as bad as initially expected. Notably, the consumer staple stocks have so far performed impressively.
Why Consumer Staple Stocks?
The consumer staple sector includes companies that provide necessities and products used in daily lives, which make them defensive in nature. So, this has always been the go-to place for investors, who want to play it safe during extreme market fluctuations.
Consequently, adding stocks from the consumer staple basket usually lends more stability to portfolios in an uncertain market condition. Moreover, the sector remains a lucrative space for income-seeking investors given its strong dividend yield.
Notably, year to date, the Consumer Staple Select Sector SPDR (XLP) has gained 14.6%, almost in line with the broad-market S&P 500 Index’s gain of 15%. However, during the past three months, when volatility resurfaced for the first time in 2019 in Wall Street, XLP gained 1.6% compared with the benchmark index’s loss of 1.7%.
From the second quarter earnings perspective, as of Aug 2, 67.7% of consumer staple companies within the S&P 500 Index reported their earnings results. Total earnings for these companies are up 7.1% from the same period last year on 7.3% higher revenues. Moreover, 71.4% companies surpassed EPS estimates while 61.9% outpaced revenue estimates. (Read More: Zacks Investment Research
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