Feb. 9 at 8:30 PM
Consumer staples stocks have become increasingly popular as investors rotate out of software and into perceived safe havens, but valuations across much of the sector now look stretched. The Consumer Staples Select Sector SPDR ETF is up about 12% in 2026 and trades at more than 20 times forward earnings, while heavyweights like Walmart and Costco are valued at roughly 45 times earnings. Other major names, including Coca-Cola, Monster Beverage, and Colgate-Palmolive, also trade at premiums to sector peers.
Some strategists warn the sector is overbought, with valuations nearing levels last seen in the late 1990s. Still, others argue the rally is justified as fundamentals stabilize. Within the sector, analysts see better value in select dividend-paying stocks. Philip Morris stands out with expected earnings growth of 11% to 13%, a dividend yield above 3%, and a valuation below many staples peers, supported by growth in smoke-free products.
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