HomeBusiness2 Consumer Staples Stocks That Could Make You a Millionaire

2 Consumer Staples Stocks That Could Make You a Millionaire

Becoming a millionaire is not something that normally happens overnight. Of course, you can risk it all on one thriving stock and hope it works out, or, for a better approach, you can build a diversified portfolio of well-managed companies and build your wealth slowly over time. If you choose the latter approach, consider adding consumer goods giants such as Procter & Gamble (NYSE:PG) And Coca-cola (NYSE: KO)to your collection of stocks. This is why.

The consumer staples sector is filled with companies that provide consumers with the everyday things they use every day. Think of things like food, drinks and personal care items. Deodorant and toilet paper are hardly exciting and innovative product categories at the moment, but you buy these mature products all the time. In fact, you probably can’t imagine your life without these products.

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For anyone who needs a reminder of how important staples are to consumers, think back to the early days of the coronavirus pandemic, when people were hoarding toilet paper and it was difficult to find many products on supermarket shelves.

Image source: Getty Images.

It doesn’t matter whether the economy is growing strongly or in recession; people always buy the consumer products they need to live a comfortable life. Therefore, any diversified portfolio should have at least some exposure to this sector. It provides a foundation on which you can own riskier, more growth-oriented stocks.

That said, the foundation is only as strong as the consumer goods companies you choose. This is why most investors looking to build millionaire status want to select the best-managed companies – a list that includes Procter & Gamble, better known as P&G, and Coca-Cola, often just called Coke.

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Procter & Gamble and Coca-Cola are both giants in the areas in which they compete. P&G is much more diversified, operating in the health and beauty (such as toothpaste and face cream), baby care (diapers), and paper products (toilet paper and paper towels) segments of the broader consumer products industry. The differentiator for P&G is that the company typically operates at the high end of the market and delivers products that provide observable benefits to justify their higher costs.

One of P&G’s strongest points is its research and development capabilities. The company does not so much want to take market share from the competition, but tries to expand categories through innovation. For example, the Swiffer product line and category didn’t exist until P&G created it, allowing competitors to create their own Swiffer-style products.

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