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 2.2% while the S&P 500 was up 7.2%.
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 that may face trouble.
Two Consumer Staples Stocks to Sell:
MGP Ingredients (MGPI)
Market Cap: $347.1 million
Headquartered in Atchison, Kansas, MGP Ingredients (NASDAQ:MGPI) is a leading supplier of high-quality ingredients to the food and beverage industry
Why Are We Out on MGPI?
- Annual revenue declines of 12.9% over the last three years indicate problems with its market positioning
- Overall productivity fell over the last year as its plummeting sales were accompanied by a decline in its operating margin
- Earnings per share have dipped by 17.4% annually over the past three years, which is concerning because stock prices follow EPS over the long term
At $16.53 per share, MGP Ingredients trades at 9x forward P/E. To fully understand why you should be careful with MGPI, check out our full research report (it’s free).
Archer-Daniels-Midland (ADM)
Market Cap: $38.03 billion
Transforming crops from the world's most productive agricultural regions into everyday essentials, Archer-Daniels-Midland (NYSE:ADM) processes and transports agricultural commodities like grains and oilseeds while manufacturing ingredients for food, beverages, feed, and industrial applications.
Why Do We Think Twice About ADM?
- Sales tumbled by 7.5% annually over the last three years, showing consumer trends are working against it
- Gross margin of 6.3% is an output of its commoditized products
- Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term
Archer-Daniels-Midland’s stock price of $79.28 implies a valuation ratio of 15.1x forward P/E. Check out our free in-depth research report to learn more about why ADM doesn’t pass our bar.
One Consumer Staples Stock to Buy:
Philip Morris (PM)
Market Cap: $281.7 billion
Founded in 1847, Philip Morris International (NYSE:PM) manufactures and sells a wide range of tobacco and nicotine-containing products, including cigarettes, heated tobacco products, and oral nicotine pouches.
Why Do We Love PM?
- Products command premium prices and result in a best-in-class gross margin of 66.5%
- Disciplined cost controls and effective management resulted in a strong two-year operating margin of 36.5%
- PM is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Philip Morris is trading at $181.44 per share, or 21.9x forward P/E. Is now the time to initiate a position? Find out in our full research report, it’s free.
Stocks We Like Even More
ONE MORE THING: Top 5 Growth Stocks. The biggest stock winners almost always had one thing in common before they ran. Revenue growing like crazy. Meta. CrowdStrike. Broadcom. Our AI flagged all three. They returned 315%, 314%, and 455%, respectively.
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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.