Consumer confidence – a key determinant of the economy’s health – has been improving significantly of late. A gradual recovery in the housing market as well as the manufacturing sector played a crucial role in raising buyers’ confidence.

Cheaper gasoline prices and a strong labor market increased household wealth, which eventually boosted consumer spending. Positive GDP also lifted stocks. In addition to this, economic growth was boosted by a pickup in construction spending, increased business spending on equipment, a bigger buildup in inventories and higher government spending.

However, the growing concern over the health of the Chinese economy continues to unnerve investors and the spillover effect is clearly visible across the borders, be it in the Asian, European or the U.S. markets. The world’s second-largest economy took the financial markets and global economy by surprise when it unexpectedly devalued its tightly controlled currency, the yuan, signaling that the economic situation was even worse than originally perceived.

Amid a derailed Chinese economy, the U.S. Federal Reserve’s decision to keep interest rates unchanged seems a wise one due to adverse conditions of the global economy, heightened market volatility and low inflation. The interest rate hike in such a situation would have drawn investment funds out of emerging markets and put them back in the U.S.; heightening investors’ concern.

In such a scenario, it may be a good idea to look at some consumer staples stocks that have the potential to outperform. A time-tested way to earn stable returns in an unpredictable economic environment is to invest in low-beta stocks that pay high dividend yields and have attractive Zacks Rank. Before we handpick the right stocks, let us delve a little deeper into the parameters for selecting such stocks.

Our Screening Metrics

Beta, one of the most commonly-used appraisal measures of a stock’s volatility, measures the tendency of a stock’s returns to respond to market swings. For example, the market as a whole has a beta of 1. Therefore, a stock with a beta of less than 1 is less volatile compared to the entire market, while a stock with a beta higher than 1 is more volatile.