For consumer staples, it's been an interesting earnings season. Some that I own, such as Diageo (NYSE:DEO) and McCormick (NYSE:MKC) are faring well. But plenty of names in the sector are facing sharp selloffs.
I've decided to highlight two names, McCormick and Colgate-Palmolive (NYSE:CL), to show the difference between a quality name and a value trap within the sector. First up, let's talk about McCormick.
Here at Seeking Alpha, within January, we had several negative articles on the company by authors who offered just 6% and 3% earnings growth rates for McCormick going forward. The consensus, based on this dim view of the company's future outlook, was to say wait for it to trade at 20x earnings, which would be in the high $70s. At that time, the stock was around $91.
