BOSTON (TheStreet) -- With crude oil costing more than $100 a barrel, the Middle East region on the brink and the Federal Reserve ending its bond-buying program soon, investors' sentiment has turned. Just yesterday, the S&P 500 fell 1.9% after jumping 24% since September. The following consumer-staples stocks -- shares of companies that produce goods needed to live -- are ranked highest by TheStreet's quantitative equity model.
Of note: Several of the following stocks represent food-products companies, which are subject to higher costs due to the recent rise in commodity prices. Their ability to pass on increased prices to consumers, without affecting demand, varies on a case-by-case basis. TheStreet's stock model incorporates both fundamental and technical factors. The stocks are ordered by net score, from good to great.
5. Hershey (HSY) is a confectioner.
Hershey's fourth-quarter net income increased 6.9% to $136 million and earnings per share rose 7.3% to 59 cents, helped by a smaller float. Revenue grew 5.4% to $1.5 billion. Hershey's gross margin widened from 44% to 46%, but its operating margin narrowed from 17% to 16%. Hershey held $885 million of cash and $1.8 billion of debt at quarter's end, for a quick ratio of one and a debt-to-equity ratio of two. It pays a quarterly dividend of 35 cents, equal to a yield of 2.6% with a payout ratio of 59%. Hershey has grown profit 33% a year, on average, since 2008.The stock has been a top performer in the packaged foods industry, having risen 29% in the past 12 months and 15% annually, on average, since 2008. It trades at a premium to food products peer averages, costing 24-times trailing earnings, 18-times forward earnings and 2.2-times sales. Its cash flow multiple of 14 reflects a discount of 26% to the industry average. Of analysts covering Hershey, six, or 33%, advise purchasing its shares, 11 suggest holding and one advocates selling them. Citigroup offers the highest target, at $60, implying 12% of upside in the next 12 months.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV