In this article, we discuss the 5 best consumer staples stocks. To read the market analysis of consumer staple stocks, go directly to the 12 Best Consumer Staple Stocks.
5. Bunge Limited (NYSE:BG)
Number of Hedge Fund Holders: 48
Bunge Limited (NYSE:BG) is an American food processing and agribusiness company that operates in 40 countries. The company also has a Sugar and Bioenergy segment that generates electricity from burning sugarcane bagasse and produces sugar and ethanol.
Bunge Limited (NYSE:BG) is a decent dividend stock and has been increasing its dividends for the last two years. As of September 28, the company has a dividend yield of 3.05% with a quarterly dividend of $0.625 per share after a 10-cent increase was announced in the previous quarter. The latest quarterly dividend was declared on August 11, payable by December 2 to the shareholders of record on November 18.
On August 12, Wolfe Research analyst Sam Margolin initiated coverage of Bunge Limited (NYSE:BG) with an Outperform rating and a price target of $127. The analyst believes the company’s growth guidance has some upside in the current commodity price environment.
Here is what Old West Investment Management had to say about Bunge Limited (NYSE:BG) in its Q1 2022 investor letter:
“Bunge (pronounced BUN-GEE) Ltd (NYSE:BG) is one of the biggest agribusinesses and food companies in the world. There are four worldwide companies that dominate the sector, the others being Archer-Daniels-Midland Cargill, and Dreyfuss. One of our favorite ways to screen for new ideas is following insider buying. When I saw the Form 4 filed by new Bunge CEO Greg Heckman, his purchase of $9 million of BG stock intrigued me. My initial thought was the company gave him the stock as a signing bonus. I contacted BG Investor Relations and asked whether it was a signing bonus or did Heckman actually write a check for $9 million. IR assured me it was his own hard-earned money that he invested in the company he was about to run.
Heckman was a long time executive at Conagra Foods who obviously sensed opportunity at BG. One of his first moves as CEO was to move the company’s HQ from New York to St. Louis, right in the middle of America’s breadbasket. BG had been plagued for years with poor decisions by underperforming management. Heckman’s decision to move to St. Louis was indicative of a no-nonsense style and he would commence cutting expenses and selling non-core assets…” (Click here to see the full text)
4. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 56
Philip Morris International Inc. (NYSE:PM) is one of the largest tobacco companies in the world. Tobacco has been one of the most consistently growing industries in the world after generating 12.6% returns on average for almost a century. Philip Morris International Inc. (NYSE:PM) is headquartered in New York and sells its products in 180 countries worldwide.
Since the spin-off in 2008, Philip Morris International Inc. (NYSE:PM) has increased its dividend every year. With the announcement of a 1.6% increase in its quarterly dividend on September 14, the company’s dividend rate growth stands at 176.1% at a CAGR of 7.5% over 13 years.
As of the second quarter of 2022, 56 hedge funds held a position in Philip Morris International Inc. (NYSE:PM), valued at $6.86 billion. In the previous quarter, 55 hedge funds had a stake in the company worth $6.64 billion. In Q2, GQG Partners had the most significant stake in the company with 30.44 million shares, worth over $3 billion.
Here is what First Eagle Investments had to say about Philip Morris International Inc. (NYSE:PM) in its Q2 2022 investor letter:
“Philip Morris shares benefited from the market rotation into defensive areas of the market. The company continued to make progress in its transition to next-generation, non-combustible products and, during the quarter, entered into an agreement to acquire Swedish Match, which is a Stockholm-based maker of Zyn oral nicotine pouches.”
3. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 60
The Coca-Cola Company (NYSE:KO) is one of the best consumer staple stocks because of its stability and defensive nature. The company has shown some resilience in inflationary environments. The company’s total price return in the last five years stands at 52% and 111.7% in the previous decade. Moreover, the company has passed on its bottling business to third parties in return for royalty payments, giving it higher revenue margins.
The Coca-Cola Company (NYSE:KO) has increased its dividend consistently for the last 60 years. Since FY19, the company has increased its dividend by 10% annually. The latest quarterly dividend of $0.44 was declared in July, payable on October 3 to the shareholders of record on September 16. As of September 28, the company has a dividend yield of 3.04%.
Here is what ClearBridge Investments had to say about The Coca-Cola Company (NYSE:KO) in its Q4 2021 investor letter:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (Coca-Cola). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
2. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 67
Walmart Inc. (NYSE:WMT) is an American retail company that operates chains of hypermarkets, discount department stores, and grocery stores. The company also operates membership-only retail warehouse clubs through Sam’s Club division.
On September 14, KeyBanc analyst Bradley Thomas initiated coverage of Walmart Inc. (NYSE:WMT) with an Overweight rating and a $155 price target. The analyst told investors that the company “over-earned” in the pandemic and is now “under-earning” due to “grossly inaccurate inventory positioning.” However, he added that normalization of margins “bodes positively for patient investors.”
Walmart Inc. (NYSE:WMT) is on its way to becoming a dividend king next quarter as it has increased its dividend for 49 consecutive years. The company has a dividend yield of 1.71% as of September 28. The quarterly dividends for all four quarters of FY2022 were declared in February, and the latest one is due on January 3, 2023, to the shareholders of record on December 9, 2022.
1. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 71
The Procter & Gamble Company (NYSE:PG) is an American multinational consumer goods corporation. The company offers consumer health, personal care, hygiene, and other products. On August 2, Barclays analyst Lauren Lieberman reiterated an Overweight rating on the company shares and lowered his price target to $154 from $157 post Q4 results.
Despite being a defensive stock, The Procter & Gamble Company (NYSE:PG) has shown decent growth over the past few years. In the past four years, the company’s annualized revenue growth has been recorded at 4.7% and EPS at 8.3%. Furthermore, the company could pass on the higher costs triggered by inflation to its customers. In its June quarter, the company increased its commodity prices by approximately 8% and generated a revenue of $19.52 billion, which was $110 million above the market forecasts.
The Procter & Gamble Company (NYSE:PG) is a dividend king that has increased its dividend payout for the past 66 years. In the last three years, the CAGR for its dividends has stood at 7%.
You can also take a look at 15 Best Gambling Stocks To Buy Now and 10 Best Stocks for Dividends.
