How to invest in Consumer Staples firms | How to Invest in Consumer Products & Services | Investment Series

How to invest in consumer staples firms

Consumer staples are firms that manufacture commodities we eat every day such as food, drinks, and non-durable home and personal products.

It is an industry valued more than $3 trillion in 2019, according to Statista.

Some individuals invest in consumer staples firms to shield themselves from downside risk during an economic downturn since these companies create important products we use on a daily basis even during a recession.

Consumer staples are commodities and services that consumers require. Food, clothes, personal hygiene, tax services, and more are all consumer staples categories.

Consumer essentials vary from consumer discretionary items, which represent what consumers desire, such entertainment, luxury travel, and beauty.

For some, consumer staples may imply sugary drinks; for others, they may mean cigarette items. Consumer staples are characterised simply by the regularity of their purchase.

Given how crucial consumer staples are in our day-to-day lives, as a group, the tend to be less vulnerable to external variables that may damage firms in other sectors during an economic crisis. We may put off going on vacation when things are bad, but we will always need items such as toilet paper and shampoo. Thus, firms that create or sell these critical items are frequently huge and stable blue-chip stocks, which is a competitive strength.

However, even solid blue-chip corporations may perceive their scale as a vulnerability when there is a change in customer demand. For example, both Coca-Cola and Procter & Gamble (both firms may be found in Public’s Pantry Essentials theme) spent decades modernising their processes to remain competitive, while smaller competitors were able to make swift improvements to operations. Thus, although consumer staple firms are steady and low-risk investments, there is no assurance that consumer staple equities will be competitive in the next market trend.

The consumer staples sector is the sixth biggest industry of the 11 primary sectors that make up the economy. As of mid-2019, consumer staples stocks accounted for $3.6 trillion in total market value, according to The Balance.

There are around 100 publicly-traded consumer staples firms, with the bulk of them trading over $100 per share in US. As these major organisations ask for a greater cost per share, many consumers with smaller investment budgets normally don’t have the money to invest in big corporations freely. This leads to the existing public market status quo that only the richest may gain on long-term investment.

Fractional shares, termed slices, affect all of that. Thanks to slices, investors may acquire equities without having to purchase the full share. Now, you may invest in your favourite consumer essentials firms with any dollar amount you desire and have. For example, if a firm you admire is trading at $100, but you have only $20 to invest, you may now acquire 20% (or 1/5) of a share of that company. Should the price of that stock increase and you chose to sell, you would get a return in proportion to your initial slice.

This might be beneficial if you wish to acquire a stock that is more costly than what you have budgeted. Buying slices of shares in several firms offers portfolio diversification, and might, thus, minimise your portfolio risk exposure to one single company. In other words, instead of having all your money tied up with one share of a pricy company, you may now acquire slices of one share in numerous companies. Buying slices of shares in several companies helps diversify your assets, thereby possibly minimising your risk and enhancing possible rewards.

What qualifies as a consumer staples company?

Like we stated, consumer staples are firms that either create or sell things that consumers buy on a daily basis. Consumer basics goods include food, personal care items, drinks, and tobacco products. Firms operating establishments that sell consumer basics items are also recognised as consumer staple companies. Supermarket businesses like as Target, Sprouts Farmers Market, and Costco are wonderful examples of consumer staples stocks, all of which can be found in Public’s Pantry Essentials theme.

Why do some individuals prefer to invest in consumer staples?

Consumer basics have fared well through a weak part of an economic cycle. When the economy is in a recession or a time of sluggish development, consumer staples firms may continue to create sales and profits since people still need to purchase everyday necessary items. For example, individuals will still need to purchase basic household supplies from retail outlets such as Bed Bath and Beyond, Home Depot, and Lowe’s even during a recession. All the brands listed above may be found under Public’s Home & Garden theme.

The consumer discretionary sector contains things that consumers may only acquire when they have additional cash. Companies within the consumer discretionary category include online luxury clothes retailers and vacation firms such as The RealReal, StitchFix, TripAdvisor. All these firms may be found in Public’s Click it, Ship It theme. These enterprises generally see growth when the overall economy is robust. During an economic downturn, discretionary items frequently see a slow down in sales.

How do you locate consumer staples firms to invest in?

You may not aware that some of the big-name companies you’re buying your everyday items from are accessible to acquire (in the form of shares!). It’s good to construct a watchlist of companies and ETFs in the consumer staples sector and become acquainted with what are included in the topic. On the Public app, you may start with any stocks and ETFs that interest you, marking them as favourites without investing and keeping an eye on them as part of your daily or weekly routine.

Follow news and updates from businesses and ETFs you are interested in will help you remain up to date. For all of the same reasons that a significant part of being a good writer entails reading, becoming a great investor means studying and completing your due diligence. Learning, monitoring, and remaining involved may help you grow your knowledge.

How to Invest in Consumer Products & Services, Main Market in Malaysia

Check out at least 169 companies of consumer products and services in Malaysia over here

Some are also offering quite a good dividend yield.

Of course, you need to check the valuation like the PE and PTBV. Some are indeed very high.

Companies like Carlsbeg and Nestle are well-known, but the valuation of the PE and PTBV are just too high. Investors are suggested to wait for a better entry level.

Remember, always but undervalue stock. Do not overpay it.

Name	Code	Price (RM)	PE	DY	ROE	PTBV	MCap.(Mil)
CARLSBG	2836	22.38	24.62	1.97	197.61	48.65	6842.64
NESTLE	4707	127.7	47.16	1.9	88.78	41.87	29945.65
HEIM	3255	23.5	20.5	3.45	87.51	17.94	7099.3
BAT	4162	10.26	10.63	9.55	70.99	7.54	2929.54
SEM	5250	1.56	23.81	1.67	66.6	15.85	1924.08
DLADY	3026	31.2	8.12	1.6	60.14	4.88	1996.8
MRDIY	5296	1.98	40.52	0.99	35.64	14.44	18665.25
SEG	9792	0.635	17.56	4.72	33.32	5.85	803.26
BAUTO	5248	1.89	11.25	4.63	31.01	3.49	2199.89
TECGUAN	7439	1.21	2.34	2.48	27.26	0.64	48.52
FPI	9172	3.03	7.25	6.6	25.02	1.81	774.29
PELIKAN	5231	0.27	1.7	74.1	21.8	0.37	164.2
CIHLDG	2828	2.82	6.8	4.26	20.44	1.39	456.84
AMWAY	6351	5	18.7	4.8	19.24	3.6	821.93
SPTOTO	1562	1.83	15.3	2.19	17.85	2.73	2472.38
TOMEI	7230	0.905	2.12	3.31	17.43	0.37	125.43
PADINI	7052	3.3	14.09	3.03	17.35	2.44	2171.1
HUPSENG	5024	0.695	23.56	3.6	16.39	3.86	556
TGL	9369	1.1	5.68	5.45	14.79	0.84	90.46
PWROOT	7237	1.98	22.01	2.73	14.28	3.14	868.51
MBMR	5983	3.25	4.75	8	13.37	0.63	1270.38
SENHENG	5305	0.685	15.36	0.73	13.33	2.05	1027.5
MULPHA	3905	2.28	1.55	0	13.11	0.2	709.49
HARISON	5008	6.73	8.87	4.46	13.04	1.16	460.93
DKSH	5908	4.7	7.22	2.34	13.02	0.94	740.99
INNATURE	5295	0.56	21.22	5.36	12.86	2.73	395.29
PCCS	6068	0.665	6.24	9.02	12.85	0.8	144.98
HOMERIZ	5160	0.51	7.8	3.14	12.82	1	236.25
MAGNI	7087	1.86	8.53	3.49	12.19	1.04	807.15
YOCB	5159	1.19	5.62	3.36	12.1	0.68	190.4
GCB	5102	2.27	13.89	1.76	12.07	1.68	2549.43
F&N	3689	21.6	23.1	2.78	11.84	2.73	7922.42
FCW	2755	1.04	10.79	0	11.76	1.27	259.99
KHIND	7062	3	5.26	1.67	11.74	0.62	126.12
ZHULIAN	5131	1.94	14.82	8.76	11.43	1.69	892.4
BONIA	9288	2.04	9.14	9.31	11.27	1.03	411.21
SIGN	7246	1.74	20.08	0	10.97	2.2	513.73
PETDAG	5681	21.06	34.15	3.32	10.88	3.71	20922.14
CCK	7035	0.61	10.65	2.05	10.8	1.15	384.74
TAFI	7211	0.455	22.36	0	10.71	2.39	172.64
HLIND	3301	9.19	14.29	5.66	10.62	1.52	3013.43
COCOLND	7205	1.48	24.09	3.38	10.59	2.55	677.25
3A	12	0.905	10.08	3.31	10.46	1.05	445.26
YENHER	5300	0.78	11.17	3.85	10.45	1.17	234
FIHB	8605	0.54	5.76	0.93	10.14	0.58	75.85
LEESK	8079	0.655	8.08	3.82	10.13	1.64	109.92
QL	7084	5.02	47.44	0.7	9.98	4.74	12216.96
PENSONI	9997	0.52	4.66	4.33	9.87	0.46	67.43
KAWAN	7216	2.28	22.02	1.32	9.86	2.17	820.5
OFI	7107	1.06	11.8	2.64	9.66	1.14	254.4
UMW	4588	3.09	9.01	1.88	9.6	0.87	3610.03
POHUAT	7088	1.41	8.12	3.55	9.36	0.76	392.4
PTRANS	186	0.89	11.39	3.62	9.13	1.04	631.46
ABLEGLOB	7167	1.36	11.82	3.68	9.06	1.07	422.24
CAMRES	7128	0.3	4.95	3.33	8.91	0.44	59.04
WEGMANS	197	0.195	10.48	2.56	8.86	0.93	107.26
GREENYB	136	0.215	12.33	1.4	8.55	1.05	71.75
RHONEMA	5278	0.685	11.86	2.92	8.49	1.01	151.54
ASIABRN	7722	0.58	7.07	1.72	8.21	0.58	134.94
CAB	7174	0.49	8.5	0	8.12	0.69	343.93
ORIENT	4006	7	7.63	5.71	8.09	0.62	4342.76
JAYCORP	7152	0.7	12.49	7.5	8	1	192.15
MARCO	3514	0.16	8.74	3.13	7.96	0.7	168.69
CSCENIC	7202	1.2	25.61	0	7.68	1.97	289.59
PPB	4065	15.72	11.73	2.23	7.45	0.87	22363.26
POHKONG	5080	0.715	5.98	1.68	7.43	0.44	293.4
FFB	5306	1.58	49.61	0.68	7.24	4.79	2935.57
AEON	6599	1.36	14.96	2.21	7.18	1.07	1909.44
CCB	2925	2.7	14.92	0	7.12	1.06	272.01
SHH	7412	0.675	13.1	0	6.96	0.91	67.5
SIME	4197	2.16	13.34	6.94	6.89	0.92	14709.42
TEOSENG	7252	0.76	10.17	0	6.86	0.7	228.01
MESB	7234	0.505	9.65	0	6.54	0.63	60.19
BESHOM	7668	1.45	20.98	6.1	6.52	1.37	435.15
TEKSENG	7200	0.34	8.42	8.82	6.51	0.55	122.63
MFLOUR	3662	0.57	7.28	2.63	6.12	0.45	581.45
SPRITZER	7103	2	14.81	2.25	6.03	0.89	419.99
PANAMY	3719	23.56	31.73	3.52	5.81	1.84	1431.17
FIAMMA	6939	1.04	16.68	3.08	5.67	0.95	551.15
MILUX	7935	0.76	76.47	0	5.52	4.22	178.64
RKI	7006	1.38	7.55	5.8	5.42	0.41	268.22
NHFATT	7060	2.77	9.13	3.25	4.96	0.45	229
ASIAFLE	7129	1.71	9.6	1.17	4.8	0.46	333.07
BJFOOD	5196	0.93	14.76	2.9	4.68	0.69	1811.3
TPC	7176	0.185	19.21	0	4.59	0.88	57.02
OCNCASH	49	0.3	15.6	2.67	4.4	0.69	78.24
LOTUS	8303	0.16	51.92	0	4.4	2.29	163.04
SERNKOU	7180	0.78	73.83	0	4.4	3.25	680.28
APOLLO	6432	3.65	29.28	4.11	4.39	1.29	292
ICONIC	9113	0.115	7.95	0	4.02	0.32	64.67
LIIHEN	7089	0.825	8.05	3.23	3.93	0.32	445.5
WANGZNG	7203	0.8	16.54	2.5	3.87	0.64	128
SOLID	5242	0.185	14.3	1.62	3.59	0.51	96.08
UPA	7757	2.09	18.62	3.83	3.26	0.61	166.33
LAYHONG	9385	0.225	11.91	1.33	3.15	0.37	166.57
RENEUCO	7130	0.225	20.77	0	2.71	0.56	122.13
NTPM	5066	0.425	35.27	3.76	2.62	0.92	477.36
PWF	7134	0.475	11.35	5.26	2.55	0.29	94.52
LHI	6633	0.465	37.35	1.42	2.4	0.9	1697.25
MINDA	5166	0.06	17.15	0	2.33	0.4	79.31
MBRIGHT	2097	0.075	32.59	0	2.3	0.75	146.05
KAMDAR	8672	0.16	6.27	0	2.2	0.14	31.68
CWG	9423	0.37	36.19	0	1.68	0.61	60.73
SWSCAP	7186	0.23	30.32	0	1.52	0.46	63.27
MAGNUM	3859	1.5	64.04	1.67	1.42	0.91	2156.62
REX	9946	0.15	48.67	1.33	1.19	0.58	98.65
MSM	5202	0.86	31.9	3.49	1.16	0.37	604.56
DRBHCOM	1619	1.4	33.06	1.43	1.12	0.37	2706.53
PMCORP	4081	0.17	49.91	2.94	1.12	0.56	131.47
XL	7121	0.68	154.05	0	0.64	0.99	148.35
AJI	2658	11.84	764.18	0.72	0.19	1.44	719.86
CNH	5104	0.055	404.08	0	0.14	0.55	39.6
ATLAN	7048	2.93	1,857.99	1.71	0.1	1.88	743.2
KTB	4847	0.2	-12.13	0	0	-1.82	93.96
KHEESAN	6203	0.105	-1.03	0	0	0	14.41
CAPITALA	5099	0.64	-0.74	0	0	-0.48	2663.55
JERASIA	8931	0.03	-0.01	0	0	-0.02	2.46
AAX	5238	0.425	0.01	0	0	-2.27	176.3
PMHLDG	1287	0.055	-824	0	-0.21	1.71	51.09
EIG	5081	0.3	-98.83	1.67	-0.43	0.43	71.16
TCHONG	4405	1.15	-54.42	1.3	-0.5	0.27	772.8
GCE	5592	0.31	-38.12	0	-0.81	0.31	61.07
PRG	7168	0.145	-39.18	0	-1	0.39	62.33
KAREX	5247	0.355	-60.41	0	-1.37	0.83	373.98
EMICO	9091	0.305	-56.77	0	-1.45	0.82	37.58
ASB	1481	0.075	-9.81	2	-1.61	0.16	69.69
SAUDEE	5157	0.04	-16.8	0	-1.65	0.28	39.67
GENM	4715	2.81	-66.08	2.14	-1.83	1.21	16685.91
CNOUHUA	5188	0.065	-18	0	-1.9	0.34	43.42
GENTING	3182	4.37	-23.1	1.6	-2.29	0.53	16942.04
LANDMRK	1643	0.19	-2.91	0	-2.37	0.07	127.59
PRLEXUS	8966	0.44	-17.65	0.68	-2.52	0.44	121.76
AVI	8885	0.09	-18.69	0	-2.61	0.49	102
LTKM	7085	1.33	-28.1	0	-3.09	0.87	190.34
PAOS	5022	0.3	-17.01	0	-3.6	0.61	54.35
OLYMPIA	3018	0.075	-5.73	0	-3.74	0.21	76.76
SALUTE	183	0.32	-20.73	0	-4.41	0.91	136.48
RGB	37	0.14	-18.67	0	-5	0.93	216.75
CHEETAH	7209	0.11	-7.55	0	-5.03	0.38	53.49
NIHSIN	7215	0.095	-9.43	0	-5.3	0.5	54.11
BJLAND	4219	0.27	-5.65	0	-6.46	0.36	1350.09
IQGROUP	5107	0.67	-7.21	0	-6.73	0.49	58.98
WARISAN	5016	1.15	-4.58	0	-6.84	0.31	77.28
PARKSON	5657	0.14	-1.43	0	-6.91	0.1	160.85
OWG	5260	0.47	-12.56	0	-8.13	1.02	202.49
SINARAN	5172	0.06	-13.81	0	-8.15	1.13	54.9
SHANG	5517	3.45	-22.64	0	-8.33	1.89	1518
OCB	5533	0.74	-5.27	2.03	-8.46	0.45	76.11
JADI	7223	0.075	-8.58	0	-8.74	0.75	80.74
ENGKAH	7149	0.355	-6.09	5.92	-10.6	0.65	41.93
XDL	5156	0.02	-0.3	0	-10.8	0.03	42.32
PERTAMA	8532	1.41	-41.21	0	-11.04	4.55	611.04
ONEGLOVE	5079	0.6	-18.82	0	-11.39	2.14	170.4
EUROSP	7094	0.82	-7.9	0	-11.76	0.93	36.43
PERMAJU	7080	0.04	-2.25	0	-11.88	0.27	77.35
IMPIANA	7243	0.02	-5.11	0	-12.22	0.62	28.89
SMCAP	9776	0.115	-3.29	0	-12.76	0.42	45.13
SYF	7082	0.26	-5.54	4.81	-14.23	0.79	149.27
AHB	7315	0.12	-7.14	0	-16.48	1.18	45.1
NICE	7139	0.125	-12.14	0	-17.16	2.08	109.69
MYNEWS	5275	0.44	-7.17	0	-18.61	1.33	300.15
HBGLOB	5187	0.105	-1.73	0	-20.19	0.35	80.85
HWATAI	8478	0.56	-10.07	0	-21.89	2.2	41.91
G3	7184	0.03	-6.35	0	-23.62	1.5	87.08
EURO	7208	0.08	-4.5	0	-32.29	1.45	70.55
SNC	7943	0.335	-7.26	0	-38.48	2.79	77.63
PARAGON	9407	1.47	-8.17	0	-41.36	3.38	123.23
MUIIND	3891	0.09	-6.33	0	-72.86	4.62	290.32
CAELY	7154	0.29	-9.69	1.72	-965	93.55	74.89

In Conclusion

Some investors hold shares in consumer staples firms to diversify their portfolios and decrease risk. Historically, Companies in this category either create vital products we consume everyday or run retail establishments that offer these necessary things. In other words, developments in this sector tend to stay stable no matter what’s occurring outside of the business world, and hence are tempting to investors who wish to diversify their portfolio during times of economic instability.

Happy Investing! 😉