In this article, we will look at 5 best consumer staples stocks to buy now. If you want to see our detailed discussion about the consumer staples industry which highlights key trends and major players, you can go to 12 Best Consumer Staples Stocks To Buy Now.
5. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 57
This March, Costco Wholesale Corporation (NASDAQ:COST) put forth its earnings report which detailed the company’s earnings for the fiscal second quarter of 2022. Costco Wholesale Corporation (NASDAQ:COST) generated revenues of $51.90 billion for the quarter, up 15.94% year over year, and beat revenue estimates by $395.81 million. The company reported earnings per share of $2.92, beating EPS estimates by $0.18. The stock is among the top 5 consumer staples stocks to buy now given its solid earnings, increasing momentum, and strong demand for the company’s products.
On April 13, Costco Wholesale Corporation (NASDAQ:COST) announced that its board of directors has increased its quarterly common-stock cash dividend from $0.79 to $0.90, which amounts to $3.60 on an annualized basis. The dividend is payable on May 13 to investors of record on April 29. Then on April 14, Tigress Financial analyst Ivan Feinseth raised his price target on Costco Wholesale Corporation (NASDAQ:COST) to $678 from $520 and maintained a Buy rating on the shares. The analyst said that the company is experiencing strong consumer demand and membership growth, driving its shares to soar. As of April 22, Costco Wholesale Corporation (NASDAQ:COST) has gone up by 57.06% over the past twelve months.
Costco Wholesale Corporation (NASDAQ:COST) was spotted on 57 investment portfolios at the close of the fourth quarter of 2021. The collective stakes of these funds in the company amounted to $5.40 billion, up from $4.39 billion in the preceding quarter with 55 identified positions. Fisher Asset Management is the largest stakeholder in Costco Wholesale Corporation (NASDAQ:COST) as of December 21, 2021. The fund’s stakes in the company were valued at $2.31 billion, which makes up for 1.29% of the fund’s 13F portfolio.
ClearBridge Investments is bullish on Costco Wholesale Corporation (NASDAQ:COST) and mentioned the stock in its fourth-quarter 2021 investor letter. Here is what the firm said:
“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”
4. PepsiCo, Inc. (NYSE:PEP)
Number of Hedge Fund Holders: 60
Moving on, PepsiCo, Inc. (NYSE:PEP) is another compelling consumer staple stock to buy in 2022. Not only does PepsiCo, Inc. (NYSE:PEP) boast profitable quarters, but the company is also a dividend king, having hiked dividends for over 50 consecutive years.
This February, PepsiCo, Inc. (NYSE:PEP) announced that its revenues for the fiscal fourth quarter of 2021 amounted to $25.25 billion, up 12.44% year over year, and outperformed the market by $1 billion. The company reported earnings per share of $1.53 and beat expert estimates by $0.01.
On February 10, PepsiCo, Inc. (NYSE:PEP) increased its annualized dividend of $4.30 per share by 7% to $4.60 per share. The dividend is expected to be paid in June 2022. At the same time, the company announced a new share repurchase program of up to $10 billion of the company’s common stock through February 28, 2026.
This April, Deutsche Bank analyst Steve Powers raised his price target on PepsiCo, Inc. (NYSE:PEP) to $173 from $171 and kept a Hold rating on the shares ahead of the company’s fiscal-first quarter 2022 results which are expected on April 26.
PepsiCo, Inc. (NYSE:PEP) has been an investor’s favorite for quite a long time now. By the end of the fourth quarter of 2021, 60 hedge funds held stakes in the company worth $4.64 billion. This is compared to 61 positions in the third quarter of 2021, with stakes worth $4.43 billion.
As of December 31, 2021, Fundsmith LLP is the largest shareholder in PepsiCo, Inc. (NYSE:PEP) owning over 10.4 million shares of the stock. Fundsmith LLP’s stakes were valued at roughly $1.80 billion, which accounts for 4.41% of Terry Smith’s hedge fund portfolio.
Here is what ClearBridge Investments had to say about PepsiCo, Inc. (NYSE:PEP) in its fourth-quarter 2021 investor letter:
“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year. After a strong year for equities, we sought to bolster more defensive areas of the portfolio and added to PepsiCo, increasing our exposure to a high-quality and stable name.”
3. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 63
Walmart Inc. (NYSE:WMT) exhibits high momentum and strong financials, making it rank among the top 3 consumer staples stocks to buy now. On February 17, the company reported market-beating earnings for the fiscal fourth quarter of 2022. Walmart Inc. (NYSE:WMT) registered an EPS of $1.53 for the quarter, beating estimates by $0.03. The company’s revenues came to $151.53 billion and outperformed the market consensus by $1.49 billion, and as of April 22, the stock has gained 13.20% over the past year.
This April, DA Davidson analyst Michael Baker raised his price target on Walmart Inc. (NYSE:WMT) to $171 from $168 and maintained a Buy rating on the shares. The analyst sees upside to the stock and told investors that he sees the valuation for Flipkart to increase and emphasized Walmart Inc. (NYSE:WMT) being one of the top-performing names in the industry in 2021.
At the close of Q4 2021, 63 hedge funds were long Walmart Inc. (NYSE:WMT) with collective stakes of $7.13 billion in the retail giant. Of these, GQG Partners was the leading hedge fund having stakes of more than $1.50 billion in Walmart Inc. (NYSE:WMT) as of December 31, 2021. The investment covers 3.73% of the fund’s 13F portfolio.
2. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 67
On April 20, The Procter & Gamble Company (NYSE:PG) put forth an earnings report detailing the company’s earnings for the fiscal third quarter of 2022. According to the report, The Procter & Gamble Company (NYSE:PG) registered an EPS of $1.33 and beat market estimates by $0.04. The company’s revenues grew by 7.02% year over year and came to $19.38 billion, beating revenue estimates by over $687 million.
In addition to having reported robust earnings for the quarter, The Procter & Gamble Company (NYSE:PG) declared an increased quarterly cash dividend of $0.9133 per share, payable on or after May 16, 2022, to investors of record on April 22, 2022. This represents a five percent increase compared to the prior quarterly dividend. Moreover, the company plans to return over $18 billion of cash to investors in the fiscal year 2022.
The Procter & Gamble Company (NYSE:PG) is the runner-up best consumer staples stock to buy now given its strong financials, consistent dividend growth, and high momentum. As of April 22, the stock is up 20.66% over the past twelve months.
The Procter & Gamble Company (NYSE:PG) has been a popular stock pick among elite hedge funds, and by the end of Q4 2021, 67 hedge funds held long positions in the company worth approximately $6.61 billion. This is compared to 69 hedge funds in the prior quarter with stakes of $6.41 billion. As of December 31, 2021, GQG Partners is the most prominent investor in The Procter & Gamble Company (NYSE:PG) having stakes of $1.23 billion in the company.
1. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 70
Topping our selection of the best consumer staples stocks to buy now is The Coca-Cola Company (NYSE:KO). The Coca-Cola Company (NYSE:KO) is a global beverage giant, and also a dividend king. The stock’s trailing-twelve-month returns are up an astounding 20.70% as of April 22, and the stock boasts a forward dividend yield of 2.66%, 59 consecutive years of dividend increases, and a 5-year dividend CAGR of 3.66%. High momentum and strong earnings and dividend history are what make The Coca-Cola Company (NYSE:KO) the best consumer staple stock to buy now.
This February, The Coca-Cola Company (NYSE:KO) announced that its quarterly revenues for the fiscal fourth quarter of 2021 were valued at $9.47 billion, up 10.08% year over year, and outperformed the market by more than $570 million. The company reported earnings per share of $0.45, beating expert estimates by $0.04.
On March 30, JPMorgan analyst Andrea Teixeira raised her price target on The Coca-Cola Company (NYSE:KO) to $68 from $65 and maintained an Overweight rating on the shares. The analyst noted that despite the Ukraine conflict’s impact on commodities costs, transportation, and currency, consumer demand for brands such as The Coca-Cola Company (NYSE:KO) is expected to remain strong.
The Coca-Cola Company (NYSE:KO) is a top dividend stock pick among investor circles. According to Insider Monkey’s database, 70 hedge funds were long The Coca-Cola Company (NYSE:KO) at the end of Q4 2021. The total stakes of these funds exceeded $28.61 billion, up from $25.13 billion in the third quarter of 2021 with 61 positions. The hedge fund sentiment for the stock is positive.
As of the end of last December, Warren Buffett’s Berkshire Hathaway is the dominating shareholder in The Coca-Cola Company (NYSE:KO). The fund’s stake in the company was valued at $23.68 billion, which covers 7.15% of Berkshire Hathaway’s Q4 2021 investment portfolio.
ClearBridge Investments mentioned The Coca-Cola Company (NYSE:KO) in its “Dividend Strategy” fourth-quarter 2021 investor letter. Here is what the firm said:
“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.”
You can also take a look at Top 10 Consumer Discretionary Stocks to Buy in 2021 and 10 Dividend Paying Consumer Defensive Stocks.
