ASX consumer staples shares largely fell flat in 2025.
Last week, The Motley Fool's Bronwyn Allen compared the performance of all 11 ASX sectors for 2025.
Coming in a disappointing 8th place was consumer staples shares.
The S&P/ASX 200 Consumer Staples index (ASX:XSJ) rose just 1.43% for the year.
For comparison, the best performing sector – materials – rose more than 31%.
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Why buy consumer staples shares?
Consumer staples shares play an important role in the economy for the everyday punter.
These companies provide essential goods and services.
Essentially, consumer staples are items people need rather than want, so they will continue to buy regardless of their financial situation.
This provides some defensive advantages, as they aren't linked to market conditions as heavily as other sectors.
For example, consumer discretionary items like electronics, travel and luxury goods are far more dependent on economic conditions and cash flow.
If household spending is tight, you aren't going to book an overseas holiday or buy a new luxury car.
However you still need groceries, fuel etc.
This is the appeal of consumer staples shares.
Two consumer staples shares with upside
Amongst the sector that fell flat last year, there were two that fell substantially that now may present value.
The first is Inghams Group Ltd (ASX: ING).
If the name sounds familiar, that's because Inghams supplies poultry products, notably to major Australian supermarkets Woolworths and Coles, and quick-service restaurants including McDonalds and KFC.
The company has a dominant position in the poultry market in both Australia and New Zealand.
In the last 12 months, its share price is down more than 20%.
The first reason it may be an attractive stock is its healthy dividend.
It is projected to pay a grossed-up dividend yield of more than 7% this year. It's hard to find a yield better than that.
This is significantly above the ASX 200 average of 3.5%.
Furthermore, analysts' price targets suggest its current share price is below fair value.
Estimates from TradingView and online brokerage platform SelfWealth list it as undervalued by between 4-11%.
Another consumer staples stock that could be undervalued is Ridley Corporation Ltd (ASX: RIC).
It is an animal feed manufacturer, engaged in the production and market of stock feed and animal feed supplements.
Its share price is down 4% over the last 12 months.
This is despite solid earnings in FY25 including EBITDA climbing 8.6% on FY24.
SelfWealth lists this stock as undervalued by 33%, while average analyst ratings on TradingView includes a one year price target 30% higher than current levels.
It also offers a dividend yield above 3%.
