Consumer staples stocks are seen as defensive plays because they’re typically safe havens in turbulent markets. On the other hand, they usually underperform during bull runs, but the sector has bucked this trend lately as its six-month return of 10.3% has closely followed the S&P 500.

Investors must still exercise caution as essential products like bread have low switching costs, meaning picking the right companies isn’t shooting fish in a barrel. With that said, here are three consumer staples stocks we’re swiping left on.

Beyond Meat (BYND)

Market Cap: $247.8 million

A pioneer at the forefront of the plant-based protein revolution, Beyond Meat (NASDAQ:BYND) is a food company specializing in alternatives to traditional meat products.

Why Are We Out on BYND?

1. Shrinking unit sales suggest it might need to invest in product improvements to get back on track
2. Cash-burning tendencies make us wonder if it can sustainably generate shareholder value
3. Short cash runway increases the probability of a capital raise that dilutes existing shareholders, or even worse, bankruptcy

Beyond Meat’s stock price of $3.83 implies a valuation ratio of 0.7x forward price-to-sales. If you’re considering BYND for your portfolio, see our FREE must-have research report to learn more.

Dole (DOLE)

Market Cap: $1.36 billion

Known for its delicious pineapples and Hawaiian roots, Dole (NYSE:DOLE) is a global agricultural company specializing in fresh fruits and vegetables.

Why Do We Pass on DOLE?

1. Products have few die-hard fans as its sales declined by 3.2% annually over the last three years
2. Gross margin of 8.5% is below its competitors, leaving less money to invest in areas like marketing and production facilities
3. Revenue for the upcoming 12 months is expected to be the same as last year, implying flat demand

Dole is trading at $14.33 per share, or 10.1x forward price-to-earnings. Dive into our free research report to see why there are better opportunities than DOLE.

Tyson Foods (TSN)

Market Cap: $21.14 billion

Started as a simple trucking business, Tyson Foods (NYSE:TSN) is one of the world’s largest producers of chicken, beef, and pork.

Why Should You Sell TSN?

1. Annual revenue growth of 4.3% over the last three years was below our standards for the consumer staples sector
2. Commoditized products and bad unit economics are reflected in its low gross margin of 6.2%
3. Falling earnings per share over the last three years has some investors worried as stock prices ultimately follow EPS over the long term

At $59.76 per share, Tyson Foods trades at 17.2x forward price-to-earnings. Check out our free in-depth research report to learn more about why TSN doesn’t pass our bar.

Stocks We Like More

The elections are now behind us. With rates dropping and inflation cooling, many analysts expect a breakout market to cap off the year - and we’re zeroing in on the stocks that could benefit immensely.

Take advantage of the rebound by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.

Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,704% between September 2019 and September 2024) as well as under-the-radar businesses like Sterling Construction (+1,003% five-year return). Find your next big winner with StockStory today for free.