Consequently, SocGen argues that consumer staples stocks like Mead Johnson (NYSE: MJN), Procter & Gamble (NYSE: PG) and Anheuser-Busch InBev (NYSE: BUD) are some ideal plays for the price move as consumers are left with more to spend.
XLP includes a 13.4% weight in PG and 1.2% in MJN. VDC has 11.9% in PG and 1.1% in MJN. FSTA has 12.5% in PG and 1.0% in MJN.
“Lower gasoline prices most benefit lower-income consumers, who spend a greater proportion of their disposable income on gasoline and other energy costs,” according to Societe Generale. “This blue collar demographic is the U.S. consumer segment that has struggled the most in recent years, so recovery here should be helpful for the U.S. sales growth of many consumer staples companies.”
For more information on the consumer sector, visit our consumer staples category.
Max Chen contributed to this article.