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The consumer staples sector has not been a favorite among investors lately.
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I’m looking to sell my shares in Clorox and Hormel to offset tax losses and possibly repurchase them in early 2026.
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I ended up buying more stock in General Mills, leaning towards the consumer staples during what seems like a recession.
Managing a portfolio often involves a lot of moving pieces, which can lead to tough choices, even about beloved stocks.
As 2025 wrapped up, I made some key decisions, including selling my shares in Hormel and Clorox, and buying additional General Mills stock. Here’s why I continue to favor these three companies.
Back in early 2025, I sold shares of a real estate investment trust (REIT), which generated gains in my taxable account. I redirected that cash into a Roth retirement account and repurchased shares in the same REIT. This maneuver was strategic to minimize current and future taxes since REIT dividends are taxed as regular income in taxable accounts, but so much more advantageous in a Roth account.
Nevertheless, that sale meant I faced a capital gain. To counteract this, I realized losses from Hormel and Clorox, ensuring I wouldn’t owe taxes on the REIT gains. It’s essential not to buy these two stocks again within 30 days, to avoid breaching the wash-sale rule, which would erase the tax benefits.
To stay invested in consumer staples, I opted for more shares in General Mills. I was still seeing gains on that investment, and surprisingly, the dividend yield had returned to levels I saw when I initially bought in mid-2018. Clearly, I like General Mills enough to double down on it. My aim is to re-acquire Hormel and Clorox in early 2026 when the wash sale rule won’t be a factor anymore.
I’m drawn to these three consumer staples companies mainly because they consistently offer high yields. While their returns can be quite volatile, dividends usually remain steady over time. Hormel is notably a dividend king, Clorox is closing in on its 50-year dividend streak, and General Mills has a general trend of increasing dividends, even if not every year.
To cut to the chase, these are reliable dividend stocks that Wall Street is currently undervaluing based on their historically high yields. Also, they all have price-to-sales ratios below their five-year averages, which I prefer over price-to-earnings ratios as sales tend to be more consistent over the long haul. That said, Hormel’s P/E ratio is the only one exceeding its five-year average.
I should mention that all these companies are encountering challenges within the industry, and they each carry their unique risks. However, they’re long-term entities, demonstrated by their solid dividend histories. Presently, Wall Street seems preoccupied with short-term consumer trends like cost-cutting and the shift towards healthier food options.
Consumer preferences are shifting, and people are more budget-conscious than usual—it’s a reality in the consumer staples market. General Mills, Clorox, and Hormel are adapting to these trends through innovation, managing costs, and making acquisitions. This isn’t surprising; it’s standard practice in consumer staples.
From my perspective, the consumer staples sector is somewhat out of favor right now on Wall Street, likely due to short-term thinking. I’m playing a longer game—what I like to call time arbitrage (I think I picked that up from somewhere, but I can’t remember the source). I’ve worked with General Mills and I see an opportunity to strategically use the current market skepticism towards Clorox and Hormel as a tax strategy. My gut tells me that this negative sentiment won’t shift anytime soon, leaving ample time to repurchase in 2026. Overall, I genuinely like all three stocks, even if my recent moves include selling two and buying one.
If you’re considering investing in General Mills stock, perhaps keep the following in mind:
Our analysts have identified what they regard as the top stocks to buy now, and interestingly, General Mills isn’t one of them. These selections show promise for impressive returns over the coming years.
