In this article, we will look at the 10 Best Consumer Staples Stocks to Buy According to Analysts.
Is the US Economy Headed for a Recession?
Consumer confidence is plunging in the US. It dropped further in March, with the Conference Board reporting the future outlook falling to the lowest level in more than a decade. The Conference Board’s monthly confidence index dropped to 92.9, reflecting a 7.2-point slip and making March the fourth consecutive month of index contraction. The index calculates respondents’ outlook on job prospects, business, and income. The fall was higher than analyst estimates, as economists surveyed by Dow Jones estimated a reading of 93.5.
That is not all: the measure for future estimates is painting an even bleaker story with the index falling to 65.2, reflecting a 9.6-point drop and making it the lowest number in 12 years. The reading is also considerably below the 80 level, which is typically considered a benchmark signal for an incoming recession.
While the confidence drop was spread across income groups, it was primarily driven by a decline in consumers aged 55 or older. These readings are materializing at a time uncertainty and concerns regarding President Trump’s tariffs are already looming on the market. These concerns have coincided with other surveys exhibiting waning consumer sentiment and a volatile stock market. CNBC reported that Stephanie Guichard, senior economist, global indicators at The Conference Board, said the following about the situation:
“Consumers’ optimism about future income — which had held up quite strongly in the past few months — largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.”
On March 14, CNBC reported that while headwinds like persistent inflation and high interest rates were already affecting companies, they now have to deal with additional obstacles such as worsening consumer sentiment, tariffs that go on and off, and mass government layoffs. Over the last weeks, investor presentations and earnings calls have shown a distinct trend: consumer-facing businesses and retailers are warning that fiscal Q1 2025 sales are coming in softer than expected. 2025 may prove to be a year tougher than what analysts initially estimated.
READ ALSO: 11 Best Coffee Stocks to Buy Now and 10 Best Department Store Stocks to Invest in.
Consumer Staples: Are They a Safe Haven Amid Recession Concerns?
Consumer staples are generally considered a safe haven amid recession and market volatility. We discussed how the consumer staple sector is expected to perform and whether it can be considered a safety net amid the current market dynamics in a recently published article on 12 Best Household Stocks to Buy According to Hedge Funds. Here is an excerpt from the article to shed light on the situation:
“On March 21, Bryan Spillane, Bank of America Securities’ senior food and beverage analyst, appeared on CNBC’s ‘The Exchange’ to discuss things across his space and the trends surrounding consumer staples. He said that going through the first quarter of the year and having check-ins with companies has led him to conclude that the conditions in the sector have been soft, which is true across his entire coverage universe. Consumers are pulling back a bit, and there’s uncertainty surrounding the conditions in the sector. What’s surprising is that these trends started in January and extended through the first quarter.
The sector, however, is showing a dichotomy. Spillane believed this is a market for consumer staples, as we are looking for defensiveness and certainty. But at the same time, we are doing that at a time when the fundamentals appear to be decelerating. This creates a dynamic for investors to really understand the market and where it would be best to put their money in, as not all seem as safe as they would typically be.
These trends have resulted in concerns about whether staples would be less of a safe haven this time around. Addressing these concerns, Spillane said that staples would still be a safe haven if we consider them relative to the world we are living in. Large liquid consumer staples are still a place investors would want to be if they are looking for a place to hide in uncertainty, as they are likely to generate considerable cash flows and pay dividends.”
With these reassuring trends for the consumer staples sector in mind, let’s look at the 10 best consumer staple stocks to buy according to analysts.
A B2B food distributor making sure grocery shelves are fully stocked with food.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 40 consumer staple stocks popular among hedge funds and selected the top 10 with the highest analyst upside potential as of March 28, 2025. We also added the number of hedge fund holders for each stock, as of Q4 2024. The list is ordered in ascending order of analyst upside potential. We sourced the hedge fund sentiment data from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10 Best Consumer Staples Stocks to Buy According to Analysts
10. PepsiCo, Inc. (NASDAQ:PEP)
Analyst Upside: 10.33%
Number of Hedge Fund Holders: 69
PepsiCo, Inc. (NASDAQ:PEP) manufactures, markets, distributes, and sells beverages, food, and snacks. The company operates in the following segments: Frito-Lay North America (FLNA), Quaker Foods North America (QFNA), PepsiCo Beverages North America (PBNA), Latin America (LatAm), Europe, Africa, Middle East, and South Asia (AMESA), and Asia Pacific, Australia and New Zealand, and China Region (APAC).
PepsiCo, Inc. (NASDAQ:PEP) has a strong cash position and generated $12.5 billion in operating cash flow during fiscal year 2024. The company also maintained steady revenue of $91.8 billion, a slight increase from last year. It plans to return approximately $7.6 billion to shareholders in this fiscal year through dividend payments.
Operating profit also rose from $11.9 billion in fiscal year 2023 to $12.8 billion, while net income improved by reaching $9.6 billion. For 2025, PepsiCo, Inc. (NASDAQ:PEP) expects low-single-digit organic revenue growth and mid-single-digit growth in core constant currency earnings per share (EPS). It takes the tenth spot on our list of the 10 best consumer staples stocks to buy according to analysts.
9. Albertsons Companies, Inc. (NYSE:ACI)
Analyst Upside: 11.06%
Number of Hedge Fund Holders: 70
Albertsons Companies, Inc. (NYSE:ACI) is a US-based food and drug retailer. It has over 2,269 stores across 34 states and the District of Columbia under 20 banners, including Star Market, Shaw’s, Albertsons, Kings Food Markets, United Supermarkets, Haggen, Kings Food Markets, Acme, Carrs, and more.
On March 13, RBC Capital analyst Steven Shemesh raised the firm’s price target on Albertsons Companies, Inc. (NYSE:ACI) to $23 from $22, keeping an Outperform rating on the shares. The analyst told investors in a research note that the firm continues to believe in the margin opportunity.
Albertsons Companies, Inc. (NYSE:ACI) reported strong performance across all metrics, with 2024 results ahead of its expectations and guidance. Total revenue grew by 10% over 2023, above the company’s upper single-digit longer-term forecast. Its adjusted EBITDA grew 18% in 2024, while its adjusted net EBITDA margin of 41% expanded more than 300 basis points. These trends reflect the inherent leverage in Albertsons Companies, Inc.’s (NYSE:ACI) software model. Cash flow generation also remains strong for the company, with cash flow from operating activities reaching $359 million in 2024, more than double the previous year. The company takes the ninth spot on our list of the top consumer staples stocks to buy now.
