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Four things to drive consumer staples stocks

The performance of the consumer staples sector has generally been weak over the past year, in terms of earnings and revenue growth. Amid the sluggish macro-economic environment, many companies in the consumer staples sector had to resort to tougher cost-control initiatives, inorganic growth and share buybacks.

This didn’t have much a negative bearing on their stock price performance at all, with the consumer staples stocks outperforming the S&P 500 index in the trailing 12 weeks. This performance momentum has continued into 2015, with the sector among the top performers in the admittedly short year-to-date period.

The perceived defensiveness of the sector likely was the biggest driver of this outperformance, which likely will get a lift from the improving economy and the positive impact of lower fuel costs on household disposable income.

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