CNBC's Jim Cramer advised investors to explore consumer staples stocks as a way to diversify away from the struggling tech sector, particularly artificial intelligence. The Nasdaq-100, which tracks major tech stocks, ended October with a nearly 7% decline, while the S&P 500 Equal Weight index gained about 5%. The consumer staples index surged 11.4%, making it the second-best performing sector behind energy.
Cramer highlighted four consumer staples companies he finds attractive. Kimberly-Clark, known for brands like Kleenex and Huggies, is a new holding in Cramer's Charitable Trust. He expects significant upside from its pending merger with Kenvue, which owns brands including Tylenol and Band-Aid. Kimberly-Clark shares gained nearly 11% in October, trading at less than 15 times earnings with a 4.7% dividend yield.
Procter & Gamble, another defensive investment, reported better-than-expected quarterly results. Cramer expressed confidence in its new CEO, Shailesh Jejurikar, though he prefers Kimberly-Clark's lower valuation and higher dividend yield. Constellation Brands, the maker of Modelo and Pacifico beers, showed signs of a turnaround with a 20% surge in October. Coca-Cola delivered a strong quarterly report driven by higher volume, with shares gaining 9% in October.