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 5% while the S&P 500 was up 18.3%.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. Taking that into account, here is one consumer stock poised to generate sustainable market-beating returns and two we’re passing on.
Two Consumer Staples Stocks to Sell:
Beyond Meat (BYND)
Market Cap: $218.4 million
A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ: BYND) is a food company specializing in alternatives to traditional meat products.
Why Are We Out on BYND?
- Falling unit sales over the past two years imply it may need to invest in product improvements to get back on track
- Capital intensity has ramped up over the last year as its free cash flow margin decreased by 18.5 percentage points
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Beyond Meat is trading at $2.86 per share, or 0.8x forward price-to-sales. To fully understand why you should be careful with BYND, check out our full research report (it’s free).
Hershey (HSY)
Market Cap: $38.13 billion
Best known for its milk chocolate bar and Hershey's Kisses, Hershey (NYSE: HSY) is an iconic company known for its chocolate products.
Why Are We Cautious About HSY?
- Shrinking unit sales over the past two years suggest it might have to lower prices to stimulate growth
- Costs have risen faster than its revenue over the last year, causing its operating margin to decline by 4.4 percentage points
- Earnings per share were flat over the last three years and fell short of the peer group average
At $187.68 per share, Hershey trades at 33.2x forward P/E. Read our free research report to see why you should think twice about including HSY in your portfolio.
One Consumer Staples Stock to Watch:
Coca-Cola (KO)
Market Cap: $282.6 billion
A pioneer and behemoth in carbonated soft drinks, Coca-Cola (NYSE: KO) is a storied beverage company best known for its flagship soda.
Why Are We Positive On KO?
- Dominant market position is represented by its $47.23 billion in revenue, which gives it negotiating power with suppliers and retailers
- Unique products and pricing power are reflected in its best-in-class gross margin of 61.1%
- Healthy operating margin of 25.1% shows it’s a well-run company with efficient processes, and its operating leverage amplified its profits over the last year
Coca-Cola’s stock price of $65.67 implies a valuation ratio of 21.2x forward P/E. Is now the right time to buy? See for yourself in our full research report, it’s free.
High-Quality Stocks for All Market Conditions
Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.
The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today for free. Find your next big winner with StockStory today. Find your next big winner with StockStory today
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