Stocks in the consumer staples sector offer stability and steady growth. They are especially attractive during turbulent market conditions. As the name implies companies in this sector produce goods that consumers buy regardless of the economic conditions. Household products like toothpaste, food items, cleaning products, hygiene items, shampoo and even beer are good examples of consumer staples. While products such as beer may seem like they are discretionary items, in reality they are consumer staples since people buy beer to enjoy during periods of economic expansions and also buy during recessions to drown their sorrow.
Large-cap European consumer staples companies offer exposure to not only the European market but also to the fast growing emerging markets. Hence investors looking to gain from the emerging market consumption growth can invest in these companies.
In order to identify some consumer staples stocks from Europe I referred to the STOXX® Europe 600 Optimised Consumer Staples index.
The STOXX Europe 600 Optimised Market Quartile indices provide investors with access to companies classified under one of the four peer groups: Consumer Discretionary, Consumer Staples, Cyclicals and Defensives. Based on the STOXX Europe 600 index, companies are evaluated by fundamental factors and allocated to one of four clusters. The index covers companies across 16 European countries: Austria, Belgium, Denmark, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
Source: STOXX
Ten stocks from the STOXX® Europe 600 Optimised Consumer Staples index trading on the US markets are listed below for consideration:
1.Company: Unilever PLC (UL)
Current Dividend Yield: 3.29%
Sector: Food Products
Country: UK
2.Company: British American Tobacco PLC (BTI)
Current Dividend Yield: 3.92%
Sector:Tobacco
Country: UK
3.Company: Henkel AG & Co KGaA (HENKY)
Current Dividend Yield: 1.63%
Sector: Household Products
Country: Germany
4.Company: Heineken NV (HEINY)
Current Dividend Yield: 2.07%
Sector:Beverages
Country: The Netherlands
5.Company:SABMiller PLC (SBMRY)
Current Dividend Yield: 2.81%
Sector:Beverages
Country: UK
6.Company: Nestle SA (NSRGY)
Current Dividend Yield: 3.08%
Sector: Food Products
Country: Switzerland
7.Company: Unilever NV (UN)
Current Dividend Yield: 2.91%
Sector: Food Products
Country: UK
8.Company: Reckitt Benckiser Group plc (RBGLY)
Current Dividend Yield: 2.61%
Sector: Household goods
Country: UK
9.Company: Anheuser-Busch InBev SA/NV (BUD)
Current Dividend Yield: 1.92%
Sector:Beverages
Country: Belgium
10.Company: Diageo PLC (DEO)
Current Dividend Yield: 2.50%
Sector: Beverages
Country: UK
Note: Dividend yields noted above are as of May 29, 2014. Data is known to be accurate from sources used. Please use your own due diligence before making any investment decisions.
Disclosure: Long HENKY, RBGLY
