These 10 consumer stocks provide an attractive mix of offense and defense
Two years ago, I recommended a group of seven consumer
stocks I thought investors should be buying. As it turns out, I may be on to
something.
Between April 26, 2018 and June 23, 2020, my seven picks
averaged a cumulative return (excluding dividends) of 73.3%, more than four
times the performance of the S&P 500 over the same period. If you take out
the best return, from Lululemon (NASDAQ:LULU) which was up 203.7, and the worst
return, from Keurig Dr. Pepper (NYSE:KDP) which was up 10.7%, you get an average
of 42.7%. That is still more than double the index.
Now, there’s no denying it feels good to see those kinds of
long-term returns, but the test of any investor’s mettle is whether they can
repeat those gains on more than one occasion.
In other words, did I get lucky? Or do I have a knack for
finding stocks that stand the test of time? I like to think it’s the latter.
That is why I want to try again.
Rather than pick 10 consumer stocks I think will do well
over the next two years, I’ll divide my selections in half, picking five
consumer staples stocks and five consumer discretionary stocks. To help with
the process, I’ll choose stocks from the top 25 holdings of the largest ETFs by
total net assets.
For consumer staples, that would be the Consumer Staples
Select Sector SPDR Fund (NYSEARCA:XLP). For consumer discretionary stocks, the
top ETF is the Consumer Discretionary Select Sector SPDR Fund (NYSEARCA:XLY).
With that in mind, here are the top 10 consumer stocks to
buy now. My consumer staples recommendations lead the list.
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