Ian Bezek
Investor/Writer, Latin American Equities, Former Analyst at Kerrisdale
Hershey is a better consumer-staples bet than optically cheaper peers because its strong brand and balance sheet keep it out of dividend-cut risk. @CDInewsletter notes Campbell's just cut its dividend and expects General Mills to follow, as both are too levered, and argues a CPG turnaround bet should be limited to companies with excellent balance sheets. x.com
Hormel Foods offers a dividend yield above 5% as a Dividend Aristocrat trading below 15x earnings, which could reward patient investors if growth rebounds. It is one of four high-yield picks chosen to avoid sucker yields, alongside VICI Properties, Ladder Capital and a global utility fund. x.com
US consumer staples look good here as a safe-haven play. x.com
Hershey looks like an obvious short because nearly its entire product line is weak, apart from Milk Duds, classic Reese's, Heath and arguably Twizzlers. If Campbell's trades at 10x earnings, Hershey should trade at about 5x. x.com
Consumer staples such as Costco, Walmart, Procter & Gamble, Kroger, General Mills, Coca-Cola and PepsiCo are among the names to study if hantavirus fear dominates the next 60-90 days, whether or not a lockdown happens. Markets react to perception before confirmed reality, and fear alone shifts attention, behavior and capital flows. A real pandemic is not needed; the fear narrative only has to persist long enough for capital and behavior to start shifting. x.com
Consumer staples should strongly outperform in 2026, one of the year's expected surprises, if the AI bubble bursts. In that scenario circular financing deals unwind, AI capex slows abruptly on return-on-investment worries and power bottlenecks, and depreciation and weaker demand wreck AI earnings estimates. PepsiCo, Coca-Cola, Procter & Gamble and Kimberly-Clark would then materially outperform the Magnificent 7, with PepsiCo beating most staples on better organic unit growth. x.com
Durable dividend stocks such as Johnson & Johnson, Coca-Cola, Realty Income, PepsiCo, Procter & Gamble, Sherwin-Williams, Visa and Federal Realty can become a lifetime income machine. The key is owning businesses so durable that investors sleep well while dividends and compounding do the work, rather than chasing yield. x.com
Procter & Gamble is highly likely to keep lagging the S&P 500 over the next 10 to 20 years, as it has this century. Store brands like Costco's Kirkland and Amazon's are no longer seen as inferior, which has changed its story, and few of its brands are must-haves besides Gillette. Elevated petroleum-based input costs for plastics and energy cast doubt on its safety-stock status. At $139, EV/EBIT is about 16 and forward P/E just under 20, so it suits only those wanting a bond proxy. x.com
Whirlpool is a high-yield stock to avoid, alongside Walgreens Boots Alliance, because its payout ratio showed the dividend risk in advance. Management described recession-level demand, cash flow turned negative, the payout ratio hit 120% and the dividend was cut. Walgreens was worse, cutting its dividend 48% in early 2024 to 25 cents a share after a 47-year record. x.com
Kraft Heinz is starting to curl higher on the chart and pays a sweet 6.5% dividend, making it a good fit for a retirement account. x.com
Consumer staples are a lose-lose here because they are already overvalued at 26x forward earnings versus a 22.7x five-year average, the highest since just before the tech bubble burst. With stocks this richly valued, there is little left to rotate into if the economy weakens next year, and the healthcare rotation is well under way. If the economy holds, high rates hurt staples; if it weakens, they are too expensive to hold up even with rate cuts, except perhaps Campbell's. x.com x.com
