We discovered the 3 Best Consumer Staples stocks to buy in June 2024 based on analysts’ Strong Buy consensus rating and solid upside potential in the next twelve months. To determine these stocks, we leveraged the TipRanks Stock Screener tool and filtered the list for the Consumer Defensive sector by selecting Strong Buy under Analyst Consensus and >20% under Price Target Upside potential.
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Consumer Staples stocks are popular defensive plays in times of economic uncertainty. These companies offer products that are generally necessity items with resilient demand, irrespective of the macroeconomic situation. Thus, these companies tend to offer stable performance in economic downturns while having the capability to outperform during expansion periods.
Consumer staples companies include household and food items, beverages, personal and hygiene items, food and staples, and tobacco. Owing to their robust business lines, most of these companies offer regular dividends to reward shareholders. Let’s learn more about the three consumer staples companies.
#1 MGP Ingredients (NASDAQ:MGPI)
MGP Ingredients is a manufacturer and supplier of premium distilled spirits, branded spirits, and plant-based food ingredients. The company operates one of the largest distilleries in the U.S., producing bourbon and rye whiskeys, gins, and vodkas. Furthermore, its food ingredients segment produces specialty proteins and starches that find applications in several functional and nutritional food products. MGPI pays a quarterly dividend of $0.12 per share, carrying a yield of 0.65%. It also undertakes regular stock buybacks.
MGPI has consistently exceeded analysts’ adjusted earnings per share (EPS) expectations in the past eight quarters. The company closed its Atchison, Kansas white goods distillery in December 2023 and is strategizing to focus on the brown goods category. Accordingly, overall sales declined by 15% year-over-year in Q1 FY24 but remained consistent if the impact of the Atchison deal was excluded from both periods.
Meanwhile, MGPI guided full-year Fiscal 2024 sales to be between $742 and $756 million, up from the pro-forma sales of $728.03 million reported in FY23. Also, adjusted EPS is forecasted in the range of $6.12 to $6.23, considerably higher than the $5.88 posted in FY23.
What is the Price Target for MGPI Stock?
With five unanimous Buy recommendations on TipRanks, MGPI stock commands a Strong Buy consensus rating. The average MGP Ingredients price target of $115 implies 56.9% upside potential from current levels. MGPI shares have declined 25.3% so far this year.
#2 Lamb Weston Holdings (NYSE:LW)
Lamb Weston is an American food processing company that sells frozen french fries, waffle fries, and other frozen potato products to restaurants and retailers worldwide. LW stock pays a quarterly dividend of $0.36 per share, reflecting a yield of 1.51%. The company also enhances shareholder returns through the regular repurchase of its common stock
The delay in transitioning to a new ERP (enterprise resource planning) system in North America has been weighing on the company’s performance. In Q3 FY24, Lamb Weston missed analysts’ consensus on both the top and bottom lines. Moreover, the company lowered its full-year outlook, which came in below the Street’s estimates, dragging down its stock price.
The restaurant industry is witnessing diminishing footfall and orders, which is impacting several QSR (quick-service restaurants) stocks and related suppliers. Lamb Weston is expected to accelerate its volumes and product offerings once the new ERP system is fully effective.
Is Lamb Weston a Good Stock to Buy?
Despite the short-term challenges, analysts remain highly optimistic about LW stock’s trajectory. With nine unanimous Buy recommendations, LW has a Strong Buy consensus rating on TipRanks. The average Lamb Weston price target of $108.75 implies 28.4% upside potential from current levels. Meanwhile, LW shares have lost 20.5% of their value so far in 2024.
#3 Anheuser-Busch InBev SA (NYSE:BUD)
Belgium-based Anheuser-Busch InBev is a multinational beverage company that manufactures both alcoholic and non-alcoholic spirits. BUD stock pays a quarterly dividend of $0.65 per share, representing a current yield of 1.09%.
It has been over a year since Anheuser-Busch was caught in a controversial marketing campaign for its Bud Light beer. Sales were hampered as people sent hate messages, with uproars to boycott the company’s products. Despite the chaos, the company has been able to consistently beat analysts’ earnings estimates for the past eight quarters. This reflects the resilient demand for BUD’s beverages.
Anheuser-Busch continues to make solid partnerships and sponsorships with leading players and sports leagues (such as the NBA, UFC, and NFL), which drives brand strength and boosts sales. Plus, the company signed a deal for the upcoming Olympic Games, making its zero-alcohol beer brand Corona Cero the sponsor of the event.
Is BUD a Good Stock to Buy?
BUD stock has a Strong Buy consensus rating on TipRanks, backed by four Buys and one Hold rating. The average Anheuser-Busch Inbev SA price target of $74.88 implies 26.6% upside potential from current levels. Year-to-date, BUD shares have lost nearly 8%.
Key Takeaways
Investors looking to diversify their portfolio with consumer staples stocks can consider the above three companies that boast a robust product portfolio, steady sales, and earnings. All these three companies are highly favored by analysts, offer attractive share price appreciation potential, and pay regular dividends, making them compelling stocks to consider.
