Consumer spending has fueled the economy for many, many years. But are you worried about the next couple of years? Has the consumer been tapped out? Will higher interest rate finally take their toll? If these questions are top of mind for you, here are three top consumer staples stocks to buy in 2025.
Jamieson Wellness
Jamieson Wellness Inc. (TSX:JWEL) is an iconic brand in the natural, or alternative health care, industry. The company has a leading market share position in Canada and an international footprint that is growing fast. In fact, in the last five years, Jamieson’s growth rate has been accelerating. Its revenue has grown at a five-year compound annual growth rate (CAGR) of 16.2%, a 10-year CAGR of 12.6%, and a 20-year CAGR of 9%. So what’s driving this growth?
Well, Jamieson’s growth is being fueled by a global health and wellness secular trend. The simple fact is that people are taking care of their health more than ever, and are willing to spend a lot on it. This means that this spending is considered almost as essential as food.
So not only is Jamieson growing its revenue quite rapidly, but it’s also delivering shareholder value. In fact, the company’s earnings per share (EPS) have grown at a four-year CAGR of 12.7%. Also, its annual dividend has grown at a CAGR of 17.3% in the same time period.
Looking ahead, Jamieson has its sights on surpassing $1 billion in annual revenue (last year’s revenue totalled $676 million).
Maple Leaf Foods
In a very different story, Maple Leaf Foods Inc. (TSX:MFI) is in the midst of a turnaround after some difficult years. It is a consumer staples stock that has been anything but safe, as you can see from the graph below.
The post-pandemic environment left Maple Leaf struggling with inflation, lower volumes, and declining profits and margins. This was reflected in the company’s results, with declining margins and earnings hitting the stock hard. For example, in 2022, EPS came in at a loss of $0.26. But since then, things have been slowly improving.
2023 saw the company report EPS of $0.09, with an earnings before interest, depreciation, and amortization (EBITDA) margin of 8.8%. This compared to an EBITDA margin of 5.8% in 2022. And in the last 12 months, the company posted an EBITDA margin of 10.6%. The company’s target is for a margin of 14% to 16%. This improvement is being driven by innovation, new processes, and new efficiencies.
Naturally, along with these improvements we are seeing rapid earnings growth, with an expected increase of 610% this year, 114% next year, and a 31% increase in 2026. And the stock is trading at very attractive valuations.
Loblaw Companies
Loblaw Companies Ltd. (TSX:L) is Canada’s leading grocery and pharmacy outlet. It is well positioned as Canada’s premier consumer staples stock, with the largest market share in the industry.
And Loblaw stock reflects this. As you can see from the graph below, Loblaw’s stock price has performed quite admirably over the last many years and is actually hovering near all-time highs. This, as investors continue to flock to it for exposure to the consumer staples sector, and as the company continues to generate shareholder value.
In the five years ended 2023, Loblaw’s revenue increased 24% to $59.5 billion, and its EPS pretty much doubled – all very excellent metrics for a so-called “boring” consumer staples company. Some of the growth drivers for the company going forward include an aging population, which will mean increased demand for Shoppers Drugmart pharmaceuticals. Also, an expanding list of services that pharmacists can offer will drive Shoppers’ pharmacy business higher. Finally, the food business will also continue to benefit from population growth.
I expect Loblaw stock to continue to be a strong performer.
