Investing in consumer companies that produce essential goods and services can significantly minimize your risks during economic downturns. These companies often have a stable demand for their products and services, making them more resilient to market volatility.
In this context, I have highlighted three fundamentally sound companies, Kimberly-Clark de México, S. A. B. de C. V. (KCDMY – Get Rating), Ennis, Inc. (EBF – Get Rating), and Mannatech, Incorporated (MTEX – Get Rating), with substantial profitability, which could be solid additions to your portfolio this month.
Despite the challenges of high inflation and the Fed’s hawkishness, the consumer goods sector has exhibited resilience. Even in the face of rising prices, consumers prioritize essential items and are often reluctant to forgo their usage, leading to consistent demand.
Therefore, companies operating in this sector tend to maintain steady performance, demonstrating their ability to withstand economic cycles. The projected value added in the Consumer Goods market is expected to reach approximately $3.08 trillion by 2023 and grow at a 3.3% CAGR over the next five years.
Further, in June, inflation experienced its slowest growth in over two years, which indicates that the Fed is progressing toward achieving its target benchmark rate of 2%. However, a robust economy and strong job market remain a concern for the Federal Reserve. As a result, most officials believe that additional rate hikes could be on the horizon.
As per ADP’s National Employment Report, the private sector added 497,000 jobs last month, surpassing the economists’ expectations for 228,000 jobs and ADP’s May total of 267,000 hires.
On the bright side, these figures bode well for the consumer goods sector, as they can lead to increased consumer spending and greater purchasing power. To that end, it could be wise for investors to consider adding stable consumer stocks, KCDMY, EBF, and MTEX, to their portfolios.
Let us dig deeper into the fundamentals of the aforementioned stocks in detail…
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