Breakfast is the most important meal of the day; Breakfast provides fuel to get your day started, and you have all day to burn those calories. It’s a consumer staple of everyday life practiced by millions of people. The investment theme here is consistency. These 2 companies are known for their packaged products, starting with their popular cereals but also following up with meals and snacks for the rest of the day. If you're seeking low-risk blue-chip consumer staples stocks to balance your portfolio, you should lock in on these 2  familiar brand stocks.

Post Holdings Co. (NYSE: POST)

Consumer packaged goods company Post Holdings has grown through an acquisition strategy. This naturally places attention on the company's debt levels and servicing fees in this high-interest rate environment. As the Federal Reserve gets closer to interest rate cuts, the company can get some relief with financing fees, which can improve the bottom line.

Breakfast for humans and pets

Its popular cereal brands include Raisin Bran, Grape-Nuts, Great Grains, Honey-Comb and Pebbles. Breakfast doesn't just apply to humans. Pets need nourishment first thing in the morning as well. Post also owns pet food brands 9Lives for cats and Rachel Ray Nutrish, Kibble ‘n Bits and Gravy Train for dogs.

If you’re not in the mood for cereal, the company also owns popular breakfast brands Egg Beaters, Bob Evans Farms, Crystal Farms Dairy Co., Owens Sausage and Simply Potatoes. Post was the parent company of sports nutrition foods producer BellRing Brands Inc. (NYSE: BRBR), which is enjoying surging stock gains on the Ozempic weight-loss trend. Check out the sector heatmap on MarketBeat.

Robust quarter

Post Holdings reported fiscal fourth-quarter 2023 non-GAAP EPS of $1.63 versus $1.34 consensus analyst estimates, a 29-cent beat. Operating profit was $153 million, with adjusted EBITDA of $349 million. Revenues grew 23.2% YoY to $1.95 billion, beating analyst estimates of $1.94 billion.

The company completed its pet food business acquisition from The J.M. Smucker Co. (NYSE: SJM), which includes 9Lives, Kibbles ' Bits and Gravy Train, as well as its private-label pet food business as well as manufacturing facilities in Pennsylvania and Kansas.

Fiscal full-year 2023 net sales were $7 billion with an operating profit of $598.9 million and adjusted EBITDA of $1.233 billion. Post Holdings expects Fiscal 2024 adjusted EBITDA to range between $1.200 billion to $1.260 billion. Capex is expected to range between $400 million to $425 million.

CEO Insights

Post Holdings CEO Robert Vitale had been diagnosed with a malignant tumor, which had been removed. Vitale will be undergoing chemotherapy, and Jeff Zadoks has been appointed interim CEO in the meantime. Zadoks commented, "The US Cereal category remained under pressure with volumes down 6% in the quarter. We expect that the category will return to its pre-pandemic volume trends as we lap the pullback of SNAP benefits in March.”

He continued, “From a share perspective, we were the only branded share gainer this quarter, ending the quarter at 19.6%. Consumers continue trading down to value in private label products, and we are well-positioned to capture this move given our strong share in these subcategories.”

Post Holdings analyst ratings and price targets are at MarketBeat. Post Holdings peers and competitor stocks can be found with the MarketBeat stock screener. POST trades at 17.3X forward earnings and has a 4.8% short interest.

Daily ascending price channel  

The daily candlestick chart on POST illustrates an ascending price channel. The ascending lower trend line commenced off the $79.78 swing low on Nov. 1, 2023. Shares continued forming higher highs and higher lows until peaking at the daily 200-period moving average resistance at $86.88 shortly after the daily market structure low (MSL) breakout formed through the $84.77 trigger. The daily relative strength index (RSI) is trying to bounce off the 50-band. Pullback support levels are at $82.86, $80.52, $78.85 and $77.59.

General Mills Inc. (NYSE: GIS)

Iconic cereal brands, from Cheerios Cocoa Puffs to Lucky Charms, Raisin Bran, Total and Wheaties, and General Mills products, have been a staple in homes since 1928, when it was a large flour mill. The company has diversified its brands and food categories to include Betty Crocker baking goods, Chex Mix, Blue Buffalo dog food, Totino's pizzas, Haagen Das ice cream, Progresso soup and Green Giant vegetables.

The company is also expanding its pet food line with the acquisition of Fera Pets, a holistic pet supplements brand. It expects to drive growth in the pet food and international markets. The company should also be experiencing strength in its protein bars from the Ozempic weight-loss trend. These include Lara Bars, KIND, Nature Valley, Golden Graham and Cinnamon Toast protein bars which may be driving the snack segment.

Steady Eddie earnings

General Mills reported its fiscal Q1 2024 EPS of $1.14, beating consensus analyst estimates for $1.08 by 6 cents. Revenues rose 4% YoY to $4.9 billion, beating consensus analyst estimates of $4.88 billion. Net organic sales rose 4%. Operating profit fell 14% to $930 million. Adjusted operating profit rose 2% to $899 million. Gross margins improved by 540 bps to 36.1% of net sales. Adjusted gross margin rose 50 bps to 35.4%. The company noted that some prominent customers were working through clearing out their inventory during the quarter.

Growth by segment

The highest areas of growth came from International at 10%, North America Foodservice at 8%, North American retail at 3%, and the Pet segment was flat due to lower volume. North American Foodservice, its B2B segment, benefits from a 4-point benefit from the TNT Crust acquisition. Its Pet segment is relatively young for the company since it was acquired from Tyson Foods Inc. (NYSE: TSN) in 2021.

Reaffirmed guidance

General Mills reaffirmed its fiscal full year 2024 EPS of 4% to 6% growth or $4.47 to $4.56 versus $4.47 consensus analyst estimates. Organic net sales are expected to grow 3% to 4%.

CEO sees a “different kind” of recession among consumers

General Mills CEO Jeff Harmening commented that they are seeing a different kind of recession with consumers that plays in their favor despite consumers tightening their budgets. Harmening pointed out, “In fact, what I would say is, as consumers start to get squeezed, what generally happens is people move more at home.” He continues, “And now the cost of eating out is roughly four times what it is eating at home, and so as consumers get more squeezed and as people get into their normal routines in the fall, we would think that at-home eating would probably pick up a little bit. We'll find out.”

General Mills analyst ratings and price targets are at MarketBeat. GIS shares trade at 14.3X forward earnings and pay a 3.68% annual dividend.

Daily ascending triangle

The daily candlestick chart on GIS indicates a failed ascending triangle breakout pattern as shares broke down below the ascending trendline and weekly MSL trigger at $63.94. GIS fell to a swing low of $62.40 before re-triggering the weekly MSL trigger at $63.94. The daily RSI is bouncing to the 50-band. GIS can reenter the ascending triangle if it can break through the lower ascending trendline at $65.04. Pullback supports are at $62.40, $61.01, $59.58 and $57.84.