Consumer Staples Stocks Offer Overlooked Value as Stock Market Remains Tech-Heavy in 2024

The stock market landscape of recent years has created a peculiar dynamic that savvy investors shouldn’t ignore. While technology stocks have captured the lion’s share of returns—driving major indices to impressive gains—an entire sector has been left behind. Consumer staples, the companies that produce the everyday products consumers can’t live without, have quietly become one of the most undervalued areas in the market today. For investors with $1,000 to deploy, this divergence represents a genuine opportunity.

Market Imbalance: Why Stock Market Concentration Creates Investment Gaps

Over the past twelve months, a fascinating performance split has emerged. Consumer staples stocks have advanced roughly 1.5%, while the S&P 500 index has surged 17%. But raw numbers miss the real story. The paths to these endpoints tell a much more compelling narrative about how today’s stock market operates.

Consumer staples shares rallied sharply in early 2025, climbing approximately 10% before settling into a gradual decline for the remainder of the period. The S&P 500’s journey was the inverse: a significant 15% correction at the year’s start, followed by a powerful recovery driven almost entirely by technology stocks. This disparity reveals a critical market truth: the stock market’s gains have become narrowly concentrated.

Technology stocks now represent roughly 35% of the S&P 500’s composition, while consumer staples account for just 5%. This concentration means that when tech surges, it can drag the entire index higher, while sectors that provide genuine diversification benefits languish in relative obscurity. For contrarian investors and those concerned about concentration risk, this creates an unusual opportunity.

Why Defensive Sectors Matter in Stock Market Downturns

The consumer staples sector carries an important characteristic that distinguishes it in the stock market cycle: it functions as a defensive anchor. These companies sell necessities—food, beverages, personal care products—that consumers purchase regardless of economic conditions. This recession-resistant quality historically provides portfolio stability when broader stock market turbulence emerges.

Consider that during the Great Recession of 2007-2009, the stock market experienced its most severe drawdown in generations. Yet companies like Coca-Cola and Procter & Gamble not only maintained their dividends but actually increased them throughout that brutal period. This track record matters tremendously when evaluating where your stock market capital should flow during uncertain times.

Three Compelling Consumer Staples Choices

Coca-Cola (NYSE: KO) represents the blue-chip option for traditional investors. The company reported organic sales growth of 6% in its third quarter, up from 5% in the prior quarter—solid expansion despite headwinds from cost-conscious consumers and government health initiatives. With a 3% dividend yield and more than sixty consecutive years of dividend increases, Coca-Cola earns its “Dividend King” status. For stock market participants seeking stability paired with modest yield, this is a foundational holding. A $1,000 investment would purchase approximately 14 shares.

Procter & Gamble (NYSE: PG) extends the dividend aristocracy even further. Its dividend streak exceeds Coca-Cola’s by six years, and it maintains a similar 3% yield. What distinguishes P&G is that its dividend yield now sits near five-year highs—a signal that the stock market may have undervalued this powerhouse. The company’s organic sales have held steady around 2% annually, demonstrating the consistency of its diversified consumer products portfolio. Value-conscious stock market investors may find P&G more attractive at current valuations. A $1,000 investment would secure roughly seven shares.

Conagra Brands (NYSE: CAG) presents a higher-risk, higher-reward scenario that suits only aggressive stock market participants. The company’s 8.7% dividend yield is notably higher, but it comes with legitimate concerns. Conagra’s portfolio includes iconic brands like Slim Jim, but these aren’t universally industry-leading properties. Organic sales declined 3% in the second quarter, reflecting competitive pressures. Most critically, Conagra cut its dividend during the last recession, a stark contrast to Coca-Cola and Procter & Gamble’s unwavering dividend commitment. Yet for those believing in a turnaround scenario, the elevated yield and potential for multiple expansion could generate outsized returns. A $1,000 investment would yield approximately 61 shares.

Taking the Contrarian Path When Stock Market Trends Are Clear

The current stock market environment makes it psychologically difficult to diverge from consensus. Technology stocks command attention, generate headlines, and have rewarded patient investors handsomely. The instinct to follow the crowd in a tech-driven stock market remains powerful.

However, market leadership rotates over time. When one sector becomes dramatically overweight within a major index—as technology now is—the probabilities shift toward reversion. Consumer staples, having lagged significantly in the stock market narrative, may be positioned for relative outperformance if economic conditions soften or if investors rotate toward lower-volatility holdings.

For conservative investors uncomfortable with the current stock market concentration, companies like Coca-Cola and Procter & Gamble provide portfolios an anchoring influence. For more aggressive investors, Conagra offers leverage to a potential sector rotation. Either way, the consumer staples sector deserves serious consideration in your stock market allocation strategy.