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One of the best-performing staples stocks this month could get even hotter

These staples stocks are sitting out safe-haven rally
These staples stocks are sitting out safe-haven rally

Consumer staples stocks have been in the express checkout lane this month.

The XLP, the ETF that tracks consumer staples stocks, is up more than 1% in August and has bucked the S&P 500's 3% drop. Its top performers include Tyson Foods, Coca-Cola, Kroger, Estee Lauder, Kellogg and Costco. Gains in those stocks have been enough to offset losses in some of its laggards including Coty, J.M. Smucker, Monster, Archer-Daniels, and Molson Coors.

It's about to get even better for one of the top performers, said Matt Maley, equity strategist at Miller Tabak

"One I like most on a technical basis is Coca-Cola," he told CNBC's "Trading Nation" on Tuesday. "Its earnings were actually in line in February, but their guidance was lower than expected, and the stock got crushed, but it held that $44.50 level. In fact, it bounced very strongly off of it, and rallied strongly up through its old highs of 2018, and beat those highs by a considerable margin with a series of higher lows and higher highs."

Coca Cola is up 4% this month, and Maley said the soda company has a protection element in case markets continue to swing.

"This is a stock that, I would also mention pays a 3% dividend, so gives you a little protection if the stock market becomes more volatile again, but also provides some more upside, but again you have to pick your spots a little bit more nowadays in this group," Maley said.

The overall sector still has enough strength to keep the rally going, he added.

"If you look at the broad group, it still looks quite good," Maley said. "We had a nice double bottom late last year with the December low. It's rallied strongly since then, making a series of higher highs and higher lows."

Its double bottom and that string of higher lows suggest to Maley that the XLP ETF may continue to build on strong momentum.

"Late in the spring, it broke above its old 2018 all-time highs by a considerable margin. It did see another dip during the summer, but it held that old high, so that new support held very nicely, and it has bounced again," Maley said.

Chad Morganlander, portfolio manager at Washington Crossing Advisors, is also putting this sector in his shopping cart.

"We're well over two times exposure to the consumer staples sector. ... In the big-picture perspective, the global macro backdrop, we still continue to believe this is an ideal sector to be overweight," said Morganlander.

Consumer staples is the third best-performing sector this year, having risen more than 18%, and Morganlander says you can find many names within the XLP that provide safety

"You can find many companies that are consistently growing, consistently profitable, well-capitalized, meaning they don't have a lot of debt on their balance sheet," Morganlander said. "They're paying a rising dividend with great consistency. So yes, there may be many companies that are individually overvalued within the sector, but as a whole sector in aggregate, we would be overweight this, and we think that it's going to continue to outperform over the course of the next six to 12 months."

The staples sector is one of the top dividend-paying groups, yielding an average 2.8%. By comparison, the S&P 500 yields 2%.

Disclosure: Washington Crossing Advisors is overweight consumer staples.