3 Consumer Staples Stocks to Play Safe as Consumer Sentiment Hits a Low

Consumer sentiment is hitting rock bottom on fears that the economy could slip into a recession after President Donald Trump announced sweeping tariffs against all nations trading with the United States.

Inflation declined marginally in March but it is unlikely that the Federal Reserve will resume its interest rate cuts immediately, as the central bank prefers to wait and watch the economic situation for some time before taking a decision.

Given this situation, it would be wise to invest in safe-haven stocks like consumer staples. In this regard, Carriage Services, Inc. CSV, Reed's, Inc. REED and BellRing Brands, Inc. BRBR are lucrative buys. Each of these stocks carries a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The stocks are also from the low-beta category (beta greater than 0 but less than 1). Hence, the recommended approach is to invest in low-beta stocks with a favorable Zacks Rank.

Consumer Sentiment Hits a Low

Consumer sentiment fell to 50.8 in April, declining 10.9% from March’s final reading of 57 and also lower than the consensus estimate of a reading of 54.6, the University of Michigan survey showed. April’s reading is 34.2% below the year-ago levels. This is also the lowest reading since June 2022 and the second-lowest ever since 1952.

The five-year inflation outlook jumped 0.3% to 4.4%, the highest level since June 1991. The current economic conditions index declined 11.4% to 56.5 in April, from the prior month. The expectations index dropped 10.3% from March to 47.2 in April and hit its lowest level since May 1980.

Recession Fears Dent Sentiment

Trump’s tariffs have already rattled markets. The President announced a baseline 10% tariff on all trading partners of the United States last week and a whopping 145% tariff on Chinese imports. Wall Street saw $6.2 trillion wiped out of markers in just two sessions following the announcement.

Trump, a day later, announced a temporary 90-day pause on tariffs on all countries, with the exception of China. Stocks rebounded, with indexes making historic gains. However, the fears haven’t subsided as the halt is temporary and investors are still unclear on how Trump plans to move forward with the tariffs.

Moreover, high inflation remains a cause of concern. Inflation declined unexpectedly in March but the fears of an economic slowdown are far from over. The consumer price index (CPI) declined 0.1% sequentially in March after climbing 0.2% in February. This was the first time that the CPI declined since May 2020.

The Federal Reserve has adopted a cautious approach and halted interest rate cuts in January after inflation showed signs of increasing. Fed officials are likely to maintain this stance until they are more confident that inflation is declining and go for a rate cut only after that. The uncertainties are likely to keep markets volatile for a longer period.

3 Consumer Staple Stocks With Upside

Carriage Services

Carriage Services is a leading provider of death care services and products in the United States. CSV provides a complete range of services relating to funerals, burials and cremations, including the use of funeral homes and motor vehicles, the performance of cemetery interment services and the management and maintenance of cemetery grounds.

Carriage Services has an expected earnings growth rate of 21.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 13.8% over the past 60 days. CSV presently sports a Zacks Rank #1. Carriage Services has a beta of 0.77.

Reed's, Inc.

Reed's, Inc.develops, manufactures and markets top-selling sodas in natural foods markets and will is currently expanding its innovative, all natural, non-alcoholic beverages, candies and ice creams into the mainstream markets. REED’s non-alcoholic Ginger Brews are unique in the beverage industry being brewed from fresh ginger, spices and fruits. 

Reed's has an expected earnings growth rate of 96.1% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 33.3% over the past 60 days. REED presently has a Zacks Rank #2 and a beta of 0.62.

BellRing Brands, Inc.

BellRing Brands, Inc. manufactures and sells nutrition products. BRBR offers protein shakes, other RTD beverages, powders and nutrition bars and supplements. It offers products under the Premier Protein, Dymatize and PowerBar, as well as Joint Juice and Supreme Protein brands.

BellRing Brands has an expected earnings growth rate of 16.6% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 0.9% over the past 60 days. BRBR presently has a Zacks Rank #2 and a beta of 0.78.

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