Consumer staples stocks are solid insurance policies in frothy markets ripe for corrections. 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 1.1% while the S&P 500 was up 8.8%.
The elite companies can churn out earnings growth under any circumstance, however, and our mission at StockStory is to help you find them. With that said, here are two consumer stocks we think can generate sustainable market-beating returns and one we’re steering clear of.
One Consumer Staples Stock to Sell:
Anheuser-Busch (BUD)
Market Cap: $105.4 billion
Born out of a complicated web of mergers and acquisitions, Anheuser-Busch InBev (NYSE: BUD) boasts a powerhouse beer portfolio of Budweiser, Stella Artois, Corona, and local favorites around the world.
Why Does BUD Give Us Pause?
- Large revenue base makes it harder to increase sales quickly, and its annual revenue growth of 1.2% over the last three years was below our standards for the consumer staples sector
- Shrinking unit sales over the past two years show it’s struggled to move its products and had to rely on price increases
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
At $62.79 per share, Anheuser-Busch trades at 11.5x forward EV-to-EBITDA. If you’re considering BUD for your portfolio, see our FREE research report to learn more.
Two Consumer Staples Stocks to Watch:
Inter Parfums (IPAR)
Market Cap: $3.73 billion
With licenses to produce colognes and perfumes under brands such as Kate Spade, Van Cleef & Arpels, and Abercrombie & Fitch, Inter Parfums (NASDAQ: IPAR) manufactures and distributes fragrances worldwide.
Why Should You Buy IPAR?
- 14.6% annual revenue growth over the last three years surpassed the sector average as its brand resonated with consumers
- Free cash flow margin increased by 8.7 percentage points over the last year, giving the company more capital to invest or return to shareholders
- Industry-leading 27.4% return on capital demonstrates management’s skill in finding high-return investments
Inter Parfums’s stock price of $116.02 implies a valuation ratio of 21.5x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Altria (MO)
Market Cap: $111.6 billion
Best known for its Marlboro brand of cigarettes, Altria (NYSE: MO) offers tobacco and nicotine products.
Why Are We Positive On MO?
- Differentiated product offerings are difficult to replicate at scale and lead to a best-in-class gross margin of 70.7%
- Highly efficient business model is illustrated by its impressive 54.6% operating margin
- MO is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders
Altria is trading at $66.50 per share, or 12x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Stocks We Like Even More
Trump’s April 2025 tariff bombshell triggered a massive market selloff, but stocks have since staged an impressive recovery, leaving those who panic sold on the sidelines.
Take advantage of the rebound by checking out our Top 6 Stocks for this week. 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 Tecnoglass (+1,754% 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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