5 Best Consumer Staples Dividend Stocks To Buy Now

In this article, we discuss 5 best consumer staple stocks to buy now. If you want to read our detailed analysis of the consumer staples sector and dividend investment, go directly to read 14 Best Consumer Staples Dividend Stocks To Buy Now. 

5. Colgate-Palmolive Company (NYSE:CL)

Number of Hedge Fund Holders: 61
Dividend Yield as of March 6: 2.54%

Colgate-Palmolive Company (NYSE:CL) is a New York-based multinational consumer goods company that manufactures and distributes healthcare, personal care, and other household products. In February, Citigroup initiated its coverage on the stock with a Buy rating and an $84 price target, presenting a positive stance on the household and consumer sector.

Colgate-Palmolive Company (NYSE:CL), one of the best consumer staples dividend stocks, currently pays a quarterly dividend of $0.47 per share for a dividend yield of 2.54%, as of March 6. The company has been raising its dividends consistently for the past 60 years.

In Q4 2022, Colgate-Palmolive Company (NYSE:CL) generated over $4.6 billion in revenues, which showed a 5.2% growth from the same period last year. For FY22, the company’s operating cash flow came in at over $2.5 billion and its free cash flow amounted to $1.8 billion.

At the end of December 2022, Colgate-Palmolive Company (NYSE:CL) was a part of 61 hedge fund portfolios, compared with 57 in the previous quarter, as per Insider Monkey’s data. The stakes owned by these hedge funds have a total value of over $4.46 billion.

Third Point mentioned Colgate-Palmolive Company (NYSE:CL) in its recently-published Q4 2022 investor letter. Here is what the firm has to say:

“Colgate-Palmolive Company (NYSE:CL) remains one of the firm’s largest equity positions. The company offers defensive growth at a reasonable valuation, and we continue to see the potential for shares to deliver attractive risk adjusted returns over the next several years.

Fourth Quarter results were disappointing. The company missed on gross margins, guided 2023 well below the Street, and took another large impairment charge on its portfolio of skin care brands. The price action on the day of the print (down 5%) was extreme and perhaps reflective of growing investor frustration that the company has failed to sustainably grow earnings over the past decade.

We believe some of this “miss” was beyond the company’s control and that Colgate is on the road to delivering more predictable results. Organic growth remains strong and we expect it to start translating into earnings growth as execution improves, margins recover, and external pressures calm down…” (Click here to read the full text)

4. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 66
Dividend Yield as of March 6: 0.76%

Costco Wholesale Corporation (NASDAQ:COST) is an American company that operates big-box retail stores. The company is headquartered in Washington. In March Deutsche Bank raised its price target on the stock to $575 with a Buy rating on the shares after the company posted solid fiscal Q2 earnings.

At the end of February 2023, Costco Wholesale Corporation (NASDAQ:COST) had roughly $13 billion available in cash and cash equivalents, up from $10.2 billion in the prior-year period. The company’s revenue for the quarter came in at $55.2 billion, which showed a 6.5% growth from the same period last year.

Costco Wholesale Corporation (NASDAQ:COST) currently offers a quarterly dividend of $0.90 per share, with a dividend yield of 0.76%, as recorded on March 6. The company is one of the best consumer staples dividend stocks on our list as it has been raising its dividends consistently for the past 18 years.

According to Insider Monkey’s Q4 2022 database, 66 hedge funds owned stakes in Costco Wholesale Corporation (NASDAQ:COST), with a total value of $3.4 billion.

Madison Funds mentioned Costco Wholesale Corporation (NASDAQ:COST) in its Q4 2022 investor letter. Here is what the firm has to say:

“Costco Wholesale Corporation (NASDAQ:COST) stock fell after November sales results showed a slowing consumer. The slower November sales were followed by a slight first quarter miss with lower-than-expected margins. Costco commented that they are not seeing trade-down but private label penetration has increased modestly. Traffic continues to be positive, and Costco remains well-positioned in a more challenging macro environment due to its strong value proposition.”

3. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 66
Dividend Yield as of March 6: 1.62%

An American retailer corporation, Walmart Inc. (NYSE:WMT) is next on our list of the best consumer staples dividend stocks to buy. In February 2023, the company became a Dividend King, raising its dividends consistently for the past 50 years. It currently offers a quarterly dividend of $0.57 per share for a dividend yield of 1.62%, as of March 6.

Walmart Inc. (NYSE:WMT) recently announced that it is planning to open 28 new healthcare centers in the US in 2024, which would double its current footprint. These new centers will offer services ranging from primary and behavioral health to telehealth and X-rays.

Deutsche Bank gave a positive stance on Walmart Inc. (NYSE:WMT)’s outlook for 2023. In view of this, the firm raised its price target on the stock in February to $169 with a Buy rating on the shares.

As of the close of Q4 2022, 66 hedge funds tracked by Insider Monkey reported owning stakes in Walmart Inc. (NYSE:WMT), down from 68 in the previous quarter. These stakes have a total value of over $4.8 billion.

Leaven Partners mentioned Walmart Inc. (NYSE:WMT) in its Q3 2022 investor letter. Here is what the firm has to say:

“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Walmart (NYSE:WMT), has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%^[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”

2. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 70
Dividend Yield as of March 6: 2.66%

PepsiCo, Inc. (NASDAQ:PEP) is an American multinational food, snack, and beverage company that specializes in the manufacturing and marketing of its products. In February, Barclays maintained an Overweight rating on the stock with a $187 price target, appreciating the company’s guidance for 2023.

PepsiCo, Inc. (NASDAQ:PEP) is one of the best consumer staples dividend stocks on our list as the company has been raising its dividends consistently for the past 50 years. It currently pays a quarterly dividend of $1.15 per share for a dividend yield of 2.66%, as of March 6.

As of the close of Q4 2022, 70 hedge funds in Insider Monkey’s database owned stakes in PepsiCo, Inc. (NASDAQ:PEP), worth over $4.4 billion collectively.

Lindsell Train mentioned PepsiCo, Inc. (NASDAQ:PEP) in its Q3 2022 investor letter. Here is what the firm has to say:

“At this point, it may help to give a further example of these self-reinforcing moats to illustrate the idea, drawing from the consumer franchises side of our portfolio. In our view, strong consumer brands can similarly exhibit Lindycompatible anti-ageing properties. Consider, that the longer a company invests in its brands through advertising and R&D, the stronger and more resonant they may get. When successful, a self-sustaining feedback loop is established, whereby it becomes ever harder to recreate a heritage-rich brand from scratch, raising barriers to entry, and proportionately increasing its likely lifespan. There are plenty of long-lived portfolio franchises I could reference here, but I’ve gone with PepsiCo (NYSE:PEP); partly because we have good time-series stats on it (beware data bias!) but also, as I hope will become evident, because Pepsi over its 129 years has succeeded in creating some wonderfully deep moats.

With Pepsi Cola you get the flagship soft drinks brand, which is both global and generational, but you also get the Frito-Lay salty snacks portfolio assembled alongside it, claiming nearly 40% of the global market. That’s ten-times greater than the nearest competitor and likely higher than the next 65 competitors combined. These are exceptionally strong global bands with market shares to match; the long-term empirical result being Pepsi’s dividend record which over the past 66 years (as far back as we’ve been able to go) has compounded at an annualised rate of 10%. Pepsi is no ‘in at the ground floor’ start-up today, but it wasn’t six decades ago either. Early growth investor Philip Fisher put it well when in 1958 (two years into Pepsi’s current winning streak) he wrote of “companies which in spite of outstanding prospects of major further growth are so financially strong, with roots going so deep into the economic soil, that they qualify under the general classification of ‘institutional stocks’”. PepsiCo fits this description well…” (Click here to see the full text)

1. The Procter & Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 74
Dividend Yield as of March 6: 2.60%

The Procter & Gamble Company (NYSE:PG), an Ohio-based multinational consumer goods company, tops our list of the best consumer staples dividend stocks on our list. The company maintains a 66-year streak of consistent dividend growth. It offers a quarterly dividend of $0.9133 per share and has a dividend yield of 2.60%, as of March 6.

At the end of December 2022, 74 elite funds tracked by Insider Monkey reported owning stakes in the company in Q4 2022, up from 69 in the previous quarter. These stakes are collectively valued at over $4.7 billion.

Rowan Street Capital mentioned The Procter & Gamble Company (NYSE:PG) in its Q4 2022 investor letter. Here is what the firm has to say:

“Let’s look at The Procter & Gamble Company (NYSE:PG). Dividend yield is 2.4%. Earnings are forecasted to grow at 5.9%, and its current earnings multiple is at 25x. Now, lets say over the next 3-5 years the market loses interest in the “safe”, mature companies that grow at anemic rates and gets an appetite for growth again. It’s very unlikely that Mr. Market will be paying 25x for 5.9% earnings growth. Lets assume that multiple declines to the market average of 18x — that would be ~6.9% drag per year on the total expected return over next 3-5 years. If we get 2.4% (dividend) + 5.9% (earnings growth) – 6.9% (decrease in earnings multiple) = 1.4% (annual return we can expect on average from this stock).”

You can also take a look at 12 Most Profitable Mid-Cap Stocks Now and 16 High Growth Non-Tech Stocks That Are Profitable

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