With President-elect Donald Trump’s second term beginning in less than two weeks, the U.S. economy has yet to fend off market uncertainties positively. Geopolitical crises, incoming policy changes, and an existing border crisis have turned up the volatility knob, leading to an uncertain market.

Amid this, consumer staples remain a stable investment option, acting as a buffer against these uncertainties. Thus, investors could scoop up shares of fundamentally stable consumer staple stocks Colgate-Palmolive Company (CL), Chewy, Inc. (CHWY), and Kimberly-Clark Corporation (KMB) to look for steady returns in these uncertain times.

With his proposed 60% tariffs on Chinese goods and a pledged 25% tariff on Canadian imports within his initial days in office, Trump’s statements on trade policies have not been perceived as the most welcoming message to world leaders. Corporations, no matter how big or small, are expected to take a hit due to these tariff changes.

On the other hand, Trump’s stance on the U.S.-Mexico border crisis threatens to deepen challenges between the two nations. This means a threat to both the Mexican and American economies as interchanged goods and services between these two nations are to face significant red tape going forward.

Additionally, Trump’s vows to end the Ukraine-Russia war, the ongoing altercation in the Middle East, as well as his ‘joking’ statement to include Canada as the 51st U.S. State have all contributed to the mix of political and global uncertainty. Furthermore, hints of wanting the Panama Canal and Greenland under American control or ownership have also been observed.

Amid this concerning politically uncertain times, consumer staples remain a stable investment option. These products maintain the principle of inelastic demand, holding their needs and demand even if costs climb.

So now, let us dive deep into the fundamentals of three Consumer Goods stocks, starting with #3.

Stock #3: Colgate-Palmolive Company (CL)

CL manufactures and sells consumer products. The company has two segments: Oral, Personal and Home Care; and Pet Nutrition. It sells its products under various brands such as Colgate, Darlie, elmex, hello, meridol, Sorriso, Tom’s of Maine, Irish Spring, Palmolive, Protex, Sanex, Softsoap, and more.

CL’s trailing-12-month gross profit margin of 60.42% is 66.4% higher than the industry average of 36.32%. Its trailing-12-month levered FCF margin of 14.82% is 161.6% higher than the sector average of 5.66%. Furthermore, the stock’s trailing-12-month net income margin of 14.26% is 232.3% higher than the 4.29% industry average.

For the fiscal 2024 third quarter that ended September 30, CL’s net sales increased 2.4% year-over-year to $5.03 billion. Its non-GAAP operating profit increased 4.8% year-over-year to $1.08 billion.

Additionally, non-GAAP net income attributable to CL and non-GAAP EPS grew 5.6% and 5.8% from the prior year’s quarter to $750 million and $0.91, respectively.

Analysts expect CL’s revenue and EPS for the fiscal 2024 fourth quarter (ended December 2024) to increase 1.7% and 3.2% year-over-year to $5.04 billion and $0.90, respectively. Additionally, the company topped the consensus revenue and EPS estimates in all four trailing quarters, which is noteworthy.

CL’s shares have surged 9.3% over the past year to close the last trading session at $87.39.

CL’s POWR Ratings reflect its fundamentals. The stock has an A grade for Quality and a B for Stability. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Within the Consumer Goods industry, CL is ranked #18 out of 54 stocks. In addition to the POWR Rating highlighted above, you can check CL’s ratings for Growth, Momentum, Sentiment, and Value here.

Stock #2: Chewy, Inc. (CHWY)

CHWY is a dedicated e-commerce platform specializing in pet care. It provides a comprehensive range of products and services, including pet food, treats, supplies, medications, and services for a variety of pets, dogs, cats, fish, birds, small animals, horses, and reptiles, accessible through its retail websites and mobile apps.

CHWY’s trailing-12-month ROCE of 130.34% is significantly higher than the industry average of 10.88%. Its trailing-12-month ROTC of 7.31% is 17.4% higher than the sector average of 6.22%. Likewise, the stock’s trailing-12-month asset turnover ratio of 3.88x is 295% higher than the industry average of 0.98x.

For the fiscal 2025 third quarter that ended October 27, 2024, CHWY’s net sales increased 4.8% year-over-year to $2.88 billion. Its income from operations amounted to $25.63 million, compared to a loss from operations of $9.72 million the previous year’s quarter.

Moreover, adjusted net income and adjusted EPS attributable to common Class A and Class B stockholders grew 33.8% and 33.3% from the year-ago value to $84.92 million and $0.20, respectively.

Street expects CHWY’s revenue and EPS for the fiscal 2025 fourth (quarter ending January 2025) to increase 12.9% and 10.4% year-over-year to $3.19 billion and $0.20, respectively. Moreover, the company topped the consensus revenue estimates in all four trailing quarters, which is noteworthy.

Shares of CHWY have surged 43.2% over the past six months and 75.1% over the past year, closing the last trading session at $35.77.

CHWY’s sound fundamentals are mirrored in its POWR Ratings. The stock has an overall rating of B, translating to a Buy in our proprietary rating system.

CHWY has a B grade for Quality. Within the Consumer Goods industry, it is ranked #13 out of 54 stocks.

To access CHWY’s Growth, Stability, Value, Momentum, and Sentiment ratings, click here.

Stock #1: Kimberly-Clark Corporation (KMB)

KMB manufactures and markets personal care and consumer tissue products. The company has three segments: Personal Care; Consumer Tissue; and K-C Professional. It offers products under brands like Huggies, Pull-Ups, Kleenex, Scott, Cottonelle, Viva, Andrex, Scottex, and more.

On December 26, 2024, KMB announced significant digital transformation through its  Global Digital Technology Center (GDTC) in Bengaluru, India. Established with an initial investment of $2.5 million, this GDTC focuses on key areas and digital capabilities such as Data and Analytics, Artificial Intelligence (AI) including Generative AI, Machine Learning (ML), Cloud Transformation, and more.

The Bengaluru GDTC is set to continue its expansion, focusing on advancing AI/ML capabilities and developing innovative digital solutions to boost operational efficiency and customer engagement, contributing to India’s broader tech and innovation ecosystem and enhancing the company’s global presence.

KMB’s trailing-12-month levered FCF margin of 12.41% is 119.1% higher than the industry average of 5.66%. Its trailing-12-month EBITDA margin of 19.39% is 52% higher than the 12.76% industry average. Additionally, the stock’s trailing-12-month net income margin of 12.97% is 202.2% higher than the sector average of 4.29%.

For the fiscal third quarter that ended September 30, 2024, KMB’s net sales came in at $4.95 billion. Its operating profit increased 49.1% year-over-year to $1.15 billion.

Additionally, adjusted net income attributable to KMB and adjusted EPS rose 4.6% and 5.2% from the prior year’s quarter to $617 million and $1.83, respectively.

The consensus revenue estimate for the fiscal year ending December 2025 amounts to $20 billion. Its EPS for the same period is expected to rise 4.2% year-over-year to $7.63. Furthermore, the company surpassed the consensus EPS estimates in three of four trailing quarters.

Shares of KMB have surged marginally over the past nine months and 4.1% over the past year to close the last trading session at $127.30.

KMB’s POWR Ratings reflect its robust prospects. The stock has an overall rating of B, equating to a Buy in our proprietary rating system.

KMB has a B grade for Quality, Value, and Sentiment. It is ranked #5 out of 54 stocks in the Consumer Goods industry.

Click here to access KMB’s ratings for Stability, Momentum, and Growth.

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CL shares were unchanged in premarket trading Wednesday. Year-to-date, CL has declined -3.87%, versus a 0.44% rise in the benchmark S&P 500 index during the same period.

About the Author: Aritra_Gangopadhyay

Aritra is a financial journalist dedicated to breaking down complex financial topics into simple, actionable insights. Holding a Master’s degree in Economics, he uses his analytical expertise to help investors uncover unique opportunities for long-term success. More...

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