Consumer staples are dirt cheap
The guest argued that consumer staple stocks have been excessively punished and now offer attractive, defensive value with generous dividend yields.
The argument
He noted that while these companies have faced challenges with lower-income consumers, their international businesses are over-indexing and driving growth. He believes the negative sentiment has peaked, leaving these stocks 'dirt cheap' with well-covered dividends.
The thesis, stress-tested
✓ What validates it
- ✓Stabilization of domestic volumes in upcoming earnings reports
- ✓Continued strong international revenue growth in quarterly filings
▸ Risks discussed
- ▸Continued pressure on the lower-income US consumer could drag down domestic volumes further
- ▸High interest rates could make dividend yields less attractive relative to risk-free bonds
Hear it yourself
"The consumer, they over index to lower income consumers, and they've been challenged. So there are reasons why these stocks have gotten hit, but now I think that they've been thrown out to the point where they're dirt dirt cheap with generous, dividend yields."
00:00 / 00:16
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE