12 Best Consumer Staples Stocks To Buy Now

Published on April 26, 2022 at 11:24 am by Omer Farooq in Hedge Funds, News

In this article, we will look at 12 best consumer staples stocks to buy now. If you want to skip our detailed discussion about the consumer staples industry which highlights key trends and major players, you can continue to 5 Best Consumer Staples Stocks To Buy Now.

With inflation on the rise and supply chain disruptions resulting from the ongoing war, investors are feeling cornered and are looking to make the best of these trying times. Since consumers are unlikely to stop grocery shopping or abandoning their personal-care routines, even in times of rising inflation, the consumer staples sector presents a more reliable and inflation-resilient investment opportunity during times of economic uncertainty.

Retail Sales Are Up

Research from Bank of America highlights that in 2022, U.S. consumer credit and debit card spending has risen by 15% year over year as of April, and this includes low-income households. Households that have an annual median income below $50,000 were shown to be using their Bank of America debit and credit cards 33.3% more in April 2022, than they had used them over the past three years. According to the Wall Street Journal, U.S. retail sales grew by 0.3% in February, even when the Consumer Price Index rose 7.9 percent year over year in the month. The National Retail Federation forecasts retail sales growth of 6% to 8% in 2022, with a sales total between $4.86 trillion and $4.95 trillion, excluding motor vehicles, gasoline, and restaurants.

Consumer Staples Market Size

According to the Consumer Packaged Goods (CPG) Market report by Absolute Reports, the global consumer packaged goods market size was valued at $2.05 trillion in 2021 and is projected to reach $2.50 trillion by 2028, registering a compound annual growth rate of 2.9% from over the forecasted period. The consumer staples market is comprised of four major segments, namely, food and beverage, personal care, household supplies, and others. Major players in the consumer staples industry include Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO).

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Our Methodology

To pick the 12 best consumer staples stocks to buy now, we did a careful assessment of companies belonging to different subsectors of the consumer staples industry. We took into account company financials, most recent quarterly results, and the analyst and investor sentiment around their stocks. We also gauged each stock’s momentum and narrowed down our selection to high momentum stocks that had positive analyst and hedge fund sentiment.

The hedge fund sentiment was derived from Insider Monkey’s database which tracks 924 hedge funds as of the fourth quarter of 2021.

Best Consumer Staples Stocks To Buy Now

12. Tyson Foods, Inc. (NYSE:TSN)

Number of Hedge Fund Holders: 36

Tyson Foods, Inc. (NYSE:TSN) operates as a food company worldwide. The company operates through four segments: Beef, Pork, Chicken, and Prepared Foods. This February, Tyson Foods, Inc. (NYSE:TSN) reported market-beating earnings for the fiscal first quarter of 2022. The company reported earnings per share of $2.87, beating estimates by $0.94. Its revenue grew by 23.46% from the comparable quarter last year and came to $12.93 billion, outperforming the market by $766.79 million. As of April 22, Tyson Foods, Inc. (NYSE:TSN) has a trailing-twelve-month (TTM) PE ratio of 9.65 which makes it a best value consumer staples stock to buy now.

On February 8, Stephens analyst Ben Bienvenu raised his price target on Tyson Foods, Inc. (NYSE:TSN) to $115 from $110 and maintained an Overweight rating on the shares following the company’s “strong” Q1 results for 2021 across all business segments. The analyst noted that having raised its margin guidance for its business segments along with the 4.2 million share buyback during the quarter positions Tyson Foods, Inc. (NYSE:TSN) for growth.

By the end of the fourth quarter of 2021, 36 hedge funds were bullish on Tyson Foods, Inc. (NYSE:TSN) having collective stakes of $1.01 billion in the company. This is compared to 33 positions in the preceding quarter with stakes worth $865.19 million. Yacktman Asset Management was the lead stakeholder in Tyson Foods, Inc. (NYSE:TSN) at the end of December 2021, having stakes of $239.88 million.

11. Herbalife Nutrition Ltd. (NYSE:HLF)

Number of Hedge Fund Holders: 37

Herbalife Nutrition Ltd. (NYSE:HLF) operates as a nutrition solutions company globally. The company offers weight management products, including meal replacements, protein shakes, drink mixes, weight loss enhancers, and healthy snacks. This February, the company reported earnings for the fiscal fourth quarter of 2021 in which it generated revenues of $1.32 billion and registered an EPS of $0.57. Herbalife Nutrition Ltd. (NYSE:HLF) is another undervalued stock that is popular among value investors. As of April 22, 2022, Herbalife Nutrition Ltd. (NYSE:HLF) has a TTM price-to-earnings ratio of 6.89.

On February 24, Herbalife Nutrition Ltd. (NYSE:HLF) expanded its global footprint by inaugurating its 154,697 square foot Global Business Services Center along with a research and development facility, in Bangalore, India. Herbalife Nutrition Ltd. (NYSE:HLF) has reportedly invested $5 million in the project. The company said that this facility will drive growth in both global and local-Indian markets.

This February, B. Riley analyst Jeff Van Sinderen lowered his price target on Herbalife Nutrition Ltd. (NYSE:HLF) to $50 from $58 but kept a Buy rating on the shares following the company’s fourth-quarter earnings. The analyst sees the company’s “highly adaptable direct sales model” as driving the growth of Herbalife Nutrition Ltd. (NYSE:HLF) in the U.S. and internationally.

Herbalife Nutrition Ltd. (NYSE:HLF) was a part of 37 hedge fund portfolios at the end of the fourth quarter of 2021. The total stakes of these funds were valued at $1.89 billion, up from $1.80 billion in Q3 2021 with 38 positions. As of December 31, 2021, Route One Investment Company is the most prominent investor in Herbalife Nutrition Ltd. (NYSE:HLF) with stakes of $372.9 million in the company.

Bronte Capital mentioned Herbalife Nutrition Ltd. (NYSE:HLF) in its third-quarter 2021 investor letter Here is what the firm had to say:

“Herbalife is – as we have discussed many times before – a multi-level marketing scheme selling weight-loss shakes. The idea is simple. If I replaced six meals a week with low-calorie protein shakes and I walked an extra 15km a week I would quickly lose 15-20kgs. It would be good for me. It is also well-nigh impossible to do.

One solution is to hire a personal trainer (usually of the opposite sex) and have them nag you. You will do tough stuff for an attractive member of the opposite sex. More realistically you could just have your friends nag you. And that is why this works so well as a multi-level marketing scheme. The person who sells you the shakes has an incentive to keep you on the diet.

We have looked at many distributors and we see a weight-loss program – implemented for (literally) millions of people – which works about as well as any weight-loss health program that ever existed. That still means it fails most of the time – but it works enough that we can be proud of owning this stock and the health benefits it provides. Herbalife, it turns out, grew well during COVID. This was initially a surprise to us – as we thought Herbalife depended on the personal touch to make the sale. But, instead, weight loss and associated social clubs moved online – and – in many cases were the main social outlet the customers had.”

10. Bunge Limited (NYSE:BG)

Number of Hedge Fund Holders: 38

Bunge Limited (NYSE:BG) operates as an agribusiness company worldwide. The stock is ranked 10 among the best consumer staples stocks to buy now. Insider Monkey identified 38 hedge funds long Bunge Limited (NYSE:BG) at the close of the fourth quarter of 2021. The total stakes of these funds in the company came to more than $655 million, up from $538 million in the prior quarter with 37 positions.

As of December 31, 2021, Candlestick Capital Management is the most prominent shareholder in Bunge Limited (NYSE:BG), having stakes worth over $95 million in the company, which covers 1.41% of its Candlestick Capital’s 13F portfolio.

On February 9, 2022, Bunge Limited (NYSE:BG) reported earnings for the fiscal fourth quarter of 2021 in which it beat both EPS and revenue estimates. The company reported revenues of $16.68 billion, up 32.30% year over year, and beat estimates by $1.19 billion. The company’s earnings per share came to $3.49, beating estimates by $0.62.

Bunge Limited (NYSE:BG) is on an upwards trajectory as global biofuel demand soars, and as of April 22, the stock has gained 38.49% over the past six months and has a trailing-twelve-month PE ratio of 8.97, making it a high-momentum value stock pick for investors looking to invest in the consumer staples sector.

This April, BofA analyst Steve Byrne raised his price target on Bunge Limited (NYSE:BG) to $134, up from $120, and assigned a Neutral rating on the shares, down from Buy.

Just like Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO), Bunge Limited (NYSE:BG) is a compelling investment option for investors looking to invest in the consumer staples industry.

9. Archer Daniels Midland Company (NYSE:ADM)

Number of Hedge Fund Holders: 41

Archer Daniels Midland Company (NYSE:ADM) procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients all over the world. It is one of the best consumer staple stocks to buy now because of its strong performance and high momentum. As of April 22, the stock’s trailing-twelve-month returns are up to 60.17%.

On January 25, Archer Daniels Midland Company (NYSE:ADM) reported market-beating earnings for the fiscal fourth quarter of 2021. The company generated revenues of more than $23 billion, outperforming the market by $2.86 billion, and the company registered an EPS of $1.50, beating expert estimates by $0.13.

This April, Barclays analyst Benjamin Theurer raised his price target on Archer Daniels Midland Company (NYSE:ADM) to $95 from $88 and maintained an Overweight rating on the shares. The analyst believes that the stock is gaining momentum and cites the current market volatility to be playing in favor of Archer Daniels Midland Company (NYSE:ADM). Theurer further estimates the company’s net revenue for the fiscal first quarter of 2021 to hit $22.5 billion, up 19% year-over-year.

Archer Daniels Midland Company (NYSE:ADM) was spotted on 41 hedge fund portfolios at the close of Q4 2021. The total stakes of these funds amounted to roughly $481 million, up from $351 million in the prior quarter with 27 positions. Ric Dillon’s Diamond Hill Capital was the most prominent shareholder in Archer Daniels Midland Company (NYSE:ADM) owning over 5.7 million shares of the stock, which equate to a stake value of $385.92 million.

8. The Estée Lauder Companies Inc. (NYSE:EL)

Number of Hedge Fund Holders: 44

The Estée Lauder Companies Inc. (NYSE:EL) is a leading manufacturer of skincare, makeup, fragrance, and hair care products worldwide. It is among the top consumer staples stock picks of value investors. Insider Monkey found 44 hedge funds bullish on The Estée Lauder Companies Inc. (NYSE:EL) at the close of the fourth quarter of 2021. The total stakes of these funds were estimated to equal $4.23 billion. This is compared to 49 positions in the preceding quarter with stakes worth $4.13 billion. The hedge fund sentiment for the stock is positive.

As of the end of December 2021, Fundsmith LLP is the top stakeholder in The Estée Lauder Companies Inc. (NYSE:EL) with over 7 million shares of stock in possession. This amounts to a stake of $2.65 billion and covers 6.47% of Fundsmith LLP’s Q4 2021 investment portfolio.

On February 3, 2022, The Estée Lauder Companies Inc. (NYSE:EL) reported earnings for the fiscal second quarter of 2022 in which it registered an EPS of $3.01, beating expert estimates by $0.37. The company reported revenues of $5.54 billion, up 14.14% year over year beating revenue estimates by $48.35 million.

Moreover, this February, Citi analyst Wendy Nicholson upgraded The Estée Lauder Companies Inc. (NYSE:EL) to Buy from Neutral with a price target of $374, up from $355. The analyst noted that the company is one of the fastest-growing and strategically well-positioned names in the consumer staples sector and that investors should remain bullish on the stock given the company’s organic sales growth and rising margin expansion.

7. Colgate-Palmolive Company (NYSE:CL)

Number of Hedge Fund Holders: 48

On March 10, Colgate-Palmolive Company (NYSE:CL) declared a quarterly cash dividend of $0.47 per share of common stock, payable on May 13 to investors of record on April 21. Moreover, the board of directors at the company also authorized a share repurchase program of $5 billion. Colgate-Palmolive Company (NYSE:CL) is a compelling consumer staples stock with a strong dividend history, solid earnings, and high momentum.

This January, Colgate-Palmolive Company (NYSE:CL) reported that its revenues for the fiscal fourth quarter of 2021 came to $4.40 billion, up 1.83% from $4.32 billion. The company’s earnings per share were in line with market consensus and were reported to be $0.79. Moreover, on April 13, Deutsche Bank analyst Steve Powers raised his price target on Colgate-Palmolive Company (NYSE:CL) to $91 from $90 and reiterated a Buy rating on the shares.

As of April 22, the stock has gained 8.17% over the past six months, has a dividend yield of 2.29%, and has a 5-year dividend growth rate of 3%. Colgate-Palmolive Company (NYSE:CL) is ranked seventh among the best consumer staples stocks to buy now.

48 hedge funds were long Colgate-Palmolive Company (NYSE:CL) at the end of Q4 2021, with collective stakes worth $2.06 billion. Of these, First Eagle Investment Management was the most prominent shareholder, owning over 11.5 million shares of stock. The total stake of the fund came to $988.4 million, which represents 2.47% of First Eagle Investment Management’s Q4 2021 investment portfolio.

Colgate-Palmolive Company (NYSE:CL) is a consumer staples stock with an impressive dividend history and robust earnings. Other attractive consumer staples stocks include Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), and The Coca-Cola Company (NYSE:KO).

6. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 49

Target Corporation (NYSE:TGT) operates as a general merchandise retailer in the U.S. and is the eighth largest retailer in the country. Shares of Target Corporation (NYSE:TGT) rallied after the stock was named a “top pick” in the retail sector by Barclays on April 7. Analyst Karen Short assigned the stock a price target of $280 along with an Overweight rating on the shares, noting that she believes Target Corporation (NYSE:TGT) is being traded at a discount and presents a compelling opportunity to investors to own a top-of-the-line stock in the retail sector.

This March, Target Corporation (NYSE:TGT) reported market-outperform earnings for the fiscal fourth quarter of 2022. The company reported earnings per share of $3.19, beating EPS estimates by $0.35. Moreover, the company’s quarterly revenues were valued at $31 billion, up 9.38% year over year from $28.34 billion. As of April 22, the stock’s trailing-twelve-month returns are up by 18.76% and the stock has a TTM PE ratio of 17.32, making it a high-momentum value stock pick for investors looking in the consumer staples sector.

Target Corporation (NYSE:TGT) was a part of 49 investment portfolios at the end of the fourth quarter of 2021. The total stakes of these hedge funds amounted to $3.93 billion. Rajiv Jain’s GQG Partners was the dominating shareholder in Target Corporation (NYSE:TGT) at the end of last December. According to Insider Monkey’s data, GQG Partners held stakes of $1.13 billion in the company which represents 2.81% of its investment portfolio.

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