Despite rising inflation, heightened consumer spending during the holiday season should drive the consumer goods industry’s sales growth in the near term. Therefore, prominent consumer goods stocks Procter & Gamble (PG) and Colgate-Palmolive (CL) should benefit. But which of these stocks is a better buy now? Read more to find out.The Procter & Gamble Company (PG) and Colgate-Palmolive Company (NYSE:CL) are two prominent companies in the consumer goods industry. Cincinnati, Ohio-based PG sells packaged goods through mass merchandisers, e-commerce, grocery stores, membership club stores, drug stores, and department stores. The company operates in five business segments—beauty; grooming; health care; fabric & home care; and baby, feminine & family care. In comparison, New York City-based CL sells consumer products that are manufactured under its oral, personal, homecare, and pet nutrition segments. It markets and sells its products to various retailers, wholesalers, e-commerce, and distributors.
Amid the resurgence of COVID-19 cases, rising inflation, and supply chain logjams, U.S. retail sales have been rising since August, with a 1.7% month-over-month increase in October, owing to declining jobless claims and rising consumer spending ahead of the holiday season.
Further, the inelastic demand for consumer goods across business cycles has been helping the industry offset the consequences of high inflation. Investor optimism in this space is evident in the First Trust Consumer Staples AlphaDEX ETF’s (FXG) 3.7% gains versus SPDR S&P 500 Trust ETF’s (SPY) 3.3% returns over the past month. The global consumer goods (FMCG) market is expected to grow at 5.4% CAGR to reach $15.36 trillion by 2025. So, both CL and PG should benefit.