Forget Procter & Gamble, Here's a Better Consumer Staples Stock to Buy

In the consumer staples sector, Procter & Gamble reigns supreme. It is perhaps the most famous consumer staples stock due to its massive size and very long track record of amazing shareholder returns.

P&G has been around for 177 years, and does business in more than 180 countries. It collects $83 billion in annual revenue, led by a huge portfolio of brands across categories including paper towels, toothpaste, razors, laundry detergent, and more. In fact, 23 of P&G's brands rake in at least $1 billion in annual revenue. This has allowed the company to provide tremendous returns for its shareholders. P&G has increased its dividend 58 years in a row.

P&G is a great company and a good stock. But Foolish investors should be on the hunt for the best stock in each sector. In consumer goods, you can do better than P&G, which is why I'd suggest turning your attention to another consumer staples giant, Unilever plc , as a better pick than P&G right now. Here's why.

Greater exposure to faster-growing products and marketsFor all of P&G's great qualities, it's such a massive company that it's starting to resemble a lumbering giant. P&G holds brands in slower-growing product lines that it's aggressively trying to get rid of. This was the rationale for P&G's $3 billion deal to sell its Duracell battery business to Berkshire Hathaway.

P&G management has stressed its intent to cut down its product portfolio to focus only on the businesses that are most critical to its future. In total, P&G wants to sell off about half of its global brands to cut its portfolio to around 70 to 80 brands.

Meanwhile, Unilever has a better product mix, because of its position in food and beverages, as well as its foothold in rapidly developing economies. While P&G is limited to staples products, Unilever has a number of popular food and beverage brands, like Ben & Jerry's and Lipton, which contribute meaningfully to the company. Unilever's food and beverage business represents 25% of its total revenue.

In addition, Unilever has a strong path for growth ahead of it thanks to the fact that it derives two-thirds of its sales from emerging markets. By comparison, P&G takes in only 39% of its sales from developing nations. This has paid off for Unilever, because the emerging markets are producing growth at much higher rates than more mature economies. For the first nine months of the year, Unilever's total revenue growth of 3% was led by 6% revenue growth in emerging markets.

More income for your dollarAnother advantage that Unilever has over P&G is its higher dividend yield. P&G's stock price has rallied considerably this year, which has pushed down its dividend yield. Year to date, P&G is up 11%, which mimics the overall market's gains. However, Unilever is up just 2%, which provides a better buying opportunity for new investors looking to jump in.

P&G offers a 2.8% dividend yield currently, while Unilever yields 3.4%. That means those who buy Unilever today will receive about 21% more income. This difference could be very valuable for investors.

The article Forget Procter & Gamble, Here's a Better Consumer Staples Stock to Buy originally appeared on Fool.com.

Bob Ciura has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway, Procter & Gamble, and Unilever. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.