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3 Safe Consumer Staples Stocks to Buy in a Down Market

The stock market has been witnessing wild swings lately, with the Fed’s rate hikes to tame inflation and the recessionary concerns. However, the non-cyclical nature of consumer staples could help Embotelladora Andina (AKO.B), JBS S.A. (JBSAY), and Mannatech (MTEX) to generate stable returns. Thus, we think these stocks could be ideal additions to your portfolio amid the market downturn. Keep reading…

The major indices fell on Monday after posting their first weekly gain this month last week. The Dow fell about 60 points, the S&P 500 lost 0.3%, while the Nasdaq dipped 0.7%.

Recessionary concerns are widespread as experts believe that the Federal Reserve was too slow to tame inflation. Bank of America Corp. (BAC) analysts predicted that the S&P 500 settling into a bear market might push it down to the 3,000 mark.

Consumer staples are sets of necessary products like food, beverages, and hygiene products, which enjoy a stable non-cyclical demand year-round. Hence, these companies usually generate stable revenues even in recessionary periods and conventionally decline less during bear markets.

Financial services company Wells Fargo & Company (WFC) thinks consumer staples provide a refuge against market turmoil and the recent macro backdrop favors the sector.

Hence, the consumer staples stocks Embotelladora Andina S.A. (AKO.B), JBS S.A. (JBSAY), and Mannatech, Incorporated (MTEX) might be ideal buys to navigate an uncertain market.

Embotelladora Andina S.A. (AKO.B)

AKO.B, headquartered in Santiago, Chile, produces, markets, and distributes Coca-Cola Company (KO) trademark beverages in Chile, Brazil, Argentina, and Paraguay. The company offers fruit juices, sports drinks, mineral and purified water, and PET bottles.

In April, AKO.B and the Coca-Cola system in Brazil announced they had signed an agreement to distribute Campari Group’s products. The partnership is expected to benefit the company.

AKO.B’s net sales increased 22.6% year-over-year to CLP 624.23 billion ($678.65 million) in the first quarter of 2022. Its operating income grew 20.6% from the year-ago value to CLP 95.42 billion ($103.74 million), while its adjusted EBITDA improved 19.1% year-over-year to CLP121.38 billion ($131.96 million).

The consensus EPS estimate of $1.26 for the fiscal year 2023 indicates a 14.9% improvement year-over-year. The consensus revenue estimate of $2.74 billion for the same year reflects a 7.2% increase from the prior year.

The stock has gained 3.8% intraday to close its last trading session at $11.19.

AKO.B’s POWR Ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

AKO.B is rated an A in Value and a B in Growth, Stability, and Quality. Within the A-rated Beverages industry, it is ranked #3 of 36 stocks. To see additional POWR Ratings for Momentum and Sentiment for AKO.B, click here.

JBS S.A. (JBSAY)

JBSAY operates as a food company that processes and trades in animal protein globally. The company offers beef, pork, chicken, and lamb products, as well as steel cans, plastic products, and soap bases and bars. The company is headquartered in São Paulo, Brazil.

In June, JBSAY announced the pricing of its multiple senior notes to be offered in the international market. The company intends to use the net proceeds from the offering for financing and general corporate purposes.

In April, it was reported that JBSAY had announced the creation of a business unit for renting electric trucks to distribute refrigerated cargo to retailers. This is expected to help the company advance its carbon emission reduction plan and reduce medium and long-term logistics costs.

In the first quarter ended March 31, JBSAY’s net revenue increased 20.8% year-over-year to R$90.87 billion ($17.34 billion). Its adjusted EBITDA grew 46.7% year-over-year to R$10.08 billion ($1.92 billion), while the net income increased by 151.4% from the prior-year quarter to R$5.14 billion ($981.56 million). The company’s EPS increased 182.7% from the prior-year period to R$2.29.

Analysts expect JBSAY’s revenue for the second quarter (ending June 2022) to be $18.37 billion, indicating a 12% year-over-year growth.

JBSAY’s stock has increased 7.8% over the past year and marginally intraday to close its last trading session at $12.58.

It is no surprise that JBSAY has an overall A rating, which translates to Strong Buy in our POWR Rating system. The stock has an A grade for Value and a B grade for Growth, Stability, and Sentiment. In the 88-stock Food Makers industry, it is ranked #3. The industry is rated B.

Beyond what we’ve stated above, we have also given JBSAY grades for Momentum and Quality. Get all the JBSAY ratings here.

Mannatech, Incorporated (MTEX)

MTEX operates as a global health and wellness company. The company develops, markets, and sells nutritional supplements, skincare, and anti-aging products. It markets its offerings through e-commerce and network marketing channels, as well as directly.

On June 3, MTEX declared a dividend of $0.20 per share of common stock, payable to shareholders on June 29. This reflects the company’s commitment to shareholder returns.

For the first quarter ended March 31, MTEX’s net sales were $32.38 million. Its total operating expenses came in at $25.26 million, registering a decrease of 10.8% from its year-ago value, while its earnings per common share stood at $0.06.

MTEX has declined marginally intraday to close its last trading session at $16.91.

MTEX’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, equating to Strong Buy in our POWR Rating system.

MTEX has an A grade for Growth, Value, and Quality and a B for Sentiment. In the 70-stock Consumer Goods industry, it is ranked #1. Click here to see the additional POWR Ratings for MTEX (Momentum and Stability).


AKO.B shares were trading at $10.92 per share on Tuesday afternoon, down $0.27 (-2.41%). Year-to-date, AKO.B has declined -7.58%, versus a -19.18% rise in the benchmark S&P 500 index during the same period.



About the Author: Anushka Dutta

Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.

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