Clorox, General Mills, and Constellation Brands Are Down Between 22% and 33%. Here's the Stock to Buy, Even if the Fed Keeps Hiking Interest Rates.
Consumer staples aren't looking so safe anymore. Here's why Clorox and General Mills are struggling, and why I think Constellation Brands may be better positioned for a higher-rate world.
Overview
Consumer goods stocks are supposed to be the boring, reliable part of a portfolio: People buy detergent, toothpaste, and other everyday products in good times and bad. But that reputation has taken a beating this year. Clorox (NYSE: CLX), General Mills (NYSE: GIS), and Constellation Brands (NYSE: STZ) are all down double digits from their highs -- each for very different reasons.
Higher interest rates make the comparison more useful, not less, because they raise the bar for what "safe" actually means: A company has to generate real cash and not lean too hard on debt to keep paying its dividend. Only one of these three clears that bar comfortably right now.
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Originally published at www.fool.com.