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Stock Strategist

Our Outlook for the Consumer Sector

A handful of high-quality 5-star stocks are scattered across the sector.

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Despite the ongoing slowdown in the housing market and the resurgence of high gasoline prices, consumer spending has remained strong. As a result, consumer goods and services stocks have held up quite well (on average) despite fears of an eventual consumer spending downturn. Average star ratings of the industries that constitute the consumer goods and services sectors are between 2.0 and 4.0, and the average price/fair-value ratios of these industries are between 0.9 and 1.2. This suggests to us that the sector, as a whole, is fairly valued.

Joseph Beaulieu does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.