FSTA - XLP: Expensive With Underperformance Risk
2024-04-08 02:15:54 ET
Summary
- The consumer staples sector is resilient in the face of economic uncertainty and offers a hedge for investors during volatile markets.
- The XLP is expensive at 22x PE with 7% EPS growth for PEG ratio of 2.9x vs 1.5x for the S&P 500.
- With low growth, high valuations, and few positive catalysts, this ETF may underperform the market benchmarks.
Summary
People have to eat, drink, brush their teeth, shower, shave, etc. All the basic daily personal care that we humans (and increasingly pets) do is rarely impacted by a recession or a booming job market. Consumer staples are resilient in the face of economic uncertainty and have seen demand grow steadily with the population as well as income which makes the sector attractive to investors searching for less excitement without giving up on potential returns or so is the rationale....
XLP: Expensive With Underperformance Risk