In This Article:
We recently published a list of 12 Best FMCG Stocks To Buy According to Hedge Funds. In this article, we are going to take a look at where Kimberly-Clark Corporation (NYSE:KMB) stands against other best FMCG stocks to buy according to hedge funds.
Consumer Staples Outlook For 2025
Consumer staples refer to essential daily-use products such as packaged food, toothpaste, and dish detergent. These products often run out quickly off the supermarket shelves and are considered “defensive” because consumers continue to purchase these necessities even during economic downturns. Moreover, consumer staple companies are mostly mature dividend payers.
On December 10, 2024, Ben Shuleva, Fidelity Sector Portfolio Manager shared his outlook for the sector in a report published on Fidelity Investments. The consumer staples sector had a positive year but lagged behind the broader market due to investors favoring higher-growth stocks. The high interest rates and concerns about GLP-1 weight-loss drugs affecting food consumption also impacted performance negatively. However, despite these challenges, the sector still posted strong absolute gains. Compared to the S&P 500 index the consumer staple sector gained 16.7% on a year-to-date basis as of December 9, whereas the S&P 500 index gained 26.9% during the same time.
READ ALSO: 12 Undervalued Cyclical Stocks to Buy Right Now and 10 High Growth Financial Stocks To Invest In.
Ben Shuleva from Fidelity Investments anticipates a return to normalcy for the consumer staples sector in 2025. He suggests this based on a broadly stable economic environment with healthy employment and steady real wage growth. In addition, the Fed is expected to begin cutting interest rates, which could boost dividend-paying stocks. Lastly, consumer spending has remained strong and is expected to remain resilient in 2025, thereby indicating positive sales growth for the sector. Shuleva anticipates that these factors will lead the sector to outperform the broader market in 2025. However, there could be a few uncertainties that could hamper the growth trajectory. The new presidential administration may introduce changes in tariff policies, which could affect certain consumer staples products. Although most consumer staples are manufactured domestically, so the direct impact of tariffs might be limited. Moreover, a strengthening US dollar can negatively affect consumer staples companies with international operations by reducing their foreign earnings when converted back into dollars. Shuleva emphasizes focusing on core fundamentals when investing in consumer staple companies, such as those operating in favorable market structures and maintaining strong underlying growth profiles.