By Doug Busch

As the bull market rotates leadership across sectors, it may be time for consumer goods stocks to get their turn.

The consumer staples sector, a classic defensive play, has largely sat out the 2025 rally. On a year-to-date basis, it's essentially unchanged, making it the worst performer among 11 major S&P sectors. The Consumer Staples Select Sector SPDR ETF has formed a bear flag, where a breakdown below $77.50 could trigger a move toward the round $70 level by year end. The ETF is also on the verge of flashing a bearish death cross, with the shorter term 50-day moving average set to undercut the 200-day.

Still, amid these negative technical indicators several stocks are beginning to carve out constructive bottoming formations. Let's examine three stocks offering attractive risk/reward setups, and healthy dividends to reimburse investors while they wait for a reversal.

The Consumer Staples Select Sector SPDR ETF was trading at $78.14 Friday.

Lamb Weston, the largest potato producer in the U.S., is down 6% year to date, and offers a 2.3% dividend yield. The stock still sits about 25% below its 52-week high, even after a sharp 13% gain so far this week, fueled by a well-received earnings report. Notably, its last two earnings reactions delivered powerful surges of 9% and 24% in the weeks ending April 4 and July 25, respectively. Both rallies stalled near the round $60 level but the stock cleared that ceiling this week. It has also broken above a series of lower highs dating back to summer 2023 and decisively negating a bearish head and shoulders formation. With this third attempt appearing to stick above the $60 number, enter here and stay constructive above $57.

Lamb Weston traded at $62.90 Friday.

General Mills, the iconic branded food icon nearing its 100th anniversary, is having a rough 2025, down more than 20% year to date. That slump has pushed its dividend yield close to 5%. The stock now trades 32% below its 52-week high set last October, and hasn't posted a three-week winning streak in over a year.

But a closer look at the 10-year weekly chart reveals compelling symmetry, with two major drawdowns in the 45% range, one from 2016 -- 2019 and the other from 2023 to now. The prior example ended up forming a double bottom and it looks like the more recent chart is attempting to do the same. The very round $50 level that provided support in 2017, 2019, and 2020, is once again proving influential, offering a clear risk/reward setup. A rebound toward $75 by the second quarter looks achievable. Consider initiating a position here and stay bullish above $47.

General Mills was trading at $50.55 Friday.

Conagra Brands, the packaged and processed food company, is also having a tough 2025, down 31% year to date, with its dividend yield now exceeding 7%. The stock sits 37% below its 52-week high and has managed gains in just six of the last 26 weeks. On the three-year weekly chart, technical trouble began with the completion of a bearish evening star pattern near the $40 level in early 2023.

This week, however, the stock was up more than 5% heading into today. If it holds that level it would mark its best weekly performance since March and confirm a bullish morning star pattern. Notably, the first week of August also produced a bullish engulfing candle. A move above the round $20 level would break above a bear flag and support a rally toward $26 in the first half of 2026. Enter here and remain constructive above $17.50.

Conagra traded at $19.25 Friday.

Write to Doug Busch at douglas.busch@barrons.com

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October 03, 2025 10:59 ET (14:59 GMT)

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