Consumer staples are considered safe havens in turbulent markets due to their inelastic demand profiles. 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 3.4% while the S&P 500 was up 9.8%.
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 is one resilient consumer stock we’ve added to our cart and two we’re swiping left on.
Two Consumer Staples Stocks to Sell:
Cal-Maine (CALM)
Market Cap: $3.60 billion
Known for brands such as Egg-Land’s Best and Land O’ Lakes, Cal-Maine (NASDAQ: CALM) produces, packages, and distributes eggs.
Why Are We Cautious About CALM?
- 4.3% annual revenue growth over the last three years was slower than its consumer staples peers
- Estimated sales decline of 21.1% for the next 12 months implies a challenging demand environment
- Efficiency has decreased over the last year as its operating margin fell by 8.1 percentage points
At $75.87 per share, Cal-Maine trades at 22.5x forward P/E. Dive into our free research report to see why there are better opportunities than CALM.
J. M. Smucker (SJM)
Market Cap: $10.98 billion
Best known for its fruit jams and spreads, J.M Smucker (NYSE: SJM) is a packaged foods company whose products span from peanut butter and coffee to pet food.
Why Should You Sell SJM?
- Flat unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Expenses have increased as a percentage of revenue over the last year as its operating margin fell by 11.4 percentage points
- Low returns on capital reflect management’s struggle to allocate funds effectively, and its shrinking returns suggest its past profit sources are losing steam
J. M. Smucker’s stock price of $103.12 implies a valuation ratio of 10.2x forward P/E. To fully understand why you should be careful with SJM, check out our full research report (it’s free).
One Consumer Staples Stock to Watch:
WD-40 (WDFC)
Market Cap: $2.77 billion
Short for “Water Displacement perfected on the 40th try”, WD-40 (NASDAQ: WDFC) is a renowned American consumer goods company known for its iconic and versatile spray, WD-40 Multi-Use Product.
Why Is WDFC Interesting?
- Products command premium prices and lead to a stellar gross margin of 54.9%
- Impressive free cash flow profitability enables the company to fund new investments or reward investors with share buybacks/dividends, and its growing cash flow gives it even more resources to deploy
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures, and its returns are growing as it capitalizes on even better market opportunities
WD-40 is trading at $205.36 per share, or 33.4x forward P/E. Is now the right time to buy? See for yourself in our in-depth research report, it’s free.
High-Quality Stocks for All Market Conditions
WHILE YOU’RE HERE: Top 9 Market-Beating Stocks. The best stocks don’t just beat the market once. They do it again. And again. Robust revenue growth, rising free cash flow, returns on capital that leave their competition in the dust. The market has already rewarded these businesses.
But our AI platform says the party isn’t over. Find out which 9 stocks made the cut this week — FREE. Get Our Top 9 Market-Beating Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
