In this article, we discuss 5 best consumer stocks to buy. If you want to read about some more consumer stocks as well as the risk/reward and methodology of this list, go directly to 11 Best Consumer Stocks To Buy Now.
5. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 60
% Weight of iShares Global Consumer Staples ETF as of September 22: 5.5
The Coca-Cola Company (NYSE:KO) is a beverage company with over 500 brands in more than 200 countries.
Due to its strong brand and consistent growth, The Coca-Cola Company (NYSE:KO) has raised its dividend every year for the last 60 years. As of September, the company also has a dividend yield of 3.00% and pays a quarterly dividend of $0.44 per share.
In July, Deutsche Bank kept a Hold rating on The Coca-Cola Company (NYSE:KO) stock and increased its price target to $65 from $64. The Coca-Cola Company (NYSE:KO) also had strong Q2 results with normalized EPS of $0.70, beating analyst estimates by $0.03.
According to the second quarter database of Insider Monkey, 60 hedge funds were bullish on The Coca-Cola Company (NYSE:KO), with combined stakes worth about $28 billion. Berkshire Hathaway is the biggest stakeholder of The Coca-Cola Company (NYSE:KO) as of the second quarter of 2022, with 400 million shares worth more than $25 billion.
4. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 64
% Weight of iShares Global Consumer Staples ETF as of September 22: 4.24
Costco Wholesale Corporation (NASDAQ:COST) is a retail company whose stores offers a wide range of products, including food, hardware, toys, sporting goods, jewelry, electronics, clothing, health and beauty aids, and other items.
Given its scale, Costco Wholesale Corporation (NASDAQ:COST) has been consistently profitable despite economic challenges. As a result of its profitability, the company has a strong dividend history and has raised its dividend every year for the last 17 years. As of September 25, the stock’s dividend yield stood at 0.77%.
Costco Wholesale Corporation (NASDAQ:COST) is also popular with hedge funds. According to Insider Monkey’s Q2 data, 64 hedge funds had stakes in Costco Wholesale Corporation (NASDAQ:COST) ). The total value of the holdings is approximately $4.8 billion.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Costco Wholesale Corporation (NASDAQ:COST) was one of them. Here is what the fund said:
Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco Wholesale Corporation (NASDAQ:COST), 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.
3. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 65
% Weight of iShares Global Consumer Staples ETF as of September 22: 4.49
PepsiCo, Inc. (NASDAQ:PEP), headquartered in Harrison, New York, is a food, snack, and beverage company. As of September 22, the company accounts for 4.49% of the iShares Global Consumer Staples ETF.
In August, Dara Mohsenian of Morgan Stanley wrote that he sees topline upside which could lead to EPS upside. Mohsenian has an Overweight rating on the company and $198 price target.
As of September 20, 2022, Fundsmith LLP is the largest shareholder in PepsiCo, Inc. (NASDAQ:PEP) in our database and holds a stake worth more than $1.2 billion. The investment covers 5.24% of Fundsmith LLP’s 13F portfolio.
Here is what ClearBridge Investments had to say about PepsiCo, Inc. (NYSE:PEP) in its second-quarter 2022 investor letter:
Also in the stable and predictable cash flow camp, though with a very different business model, global food and beverage company PepsiCo (NYSE:PEP) reported very strong organic growth in the first quarter, driven by healthy price/mix, and raised revenue guidance, while holding EPS guidance. Notably, its beverage business showed expanding margins.
2. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 67
% Weight of iShares Global Consumer Staples ETF as of September 22: 4.53
Walmart Inc. (NYSE:WMT) is a multinational retail company that operates more than 10,500 stores and clubs in 24 different countries.
With its strong earnings potential and history of growing earnings per share, Walmart Inc. (NYSE:WMT) has raised its dividend for 49 consecutive years. As of September, the company has a dividend yield of 1.72% and pays a quarterly dividend of $0.56 per share.
In September 14, Bradley Thomas of Keybanc also initiated an overweight rating and $155 price target, citing potential market share gains and margin recovery.
As per Insider Monkey’s Q2 2022 database, 67 hedge funds were bullish on Walmart Inc. (NYSE:WMT). The stakes owned by these hedge funds are valued at over $3.8 billion.
1. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 71
% Weight of iShares Global Consumer Staples ETF as of September 22: 8.78
The Procter & Gamble Company (NYSE:PG) is a consumer goods company that specializes in a variety of items for personal care, consumer health, and hygiene. Given its earnings growth, the company has increased its dividend for 66 consecutive years.
In the fourth fiscal quarter, The Procter & Gamble Company (NYSE:PG) reported revenue of $19.5 billion, up 3% from the same period last year.
In July, The Procter & Gamble Company (NYSE:PG) also declared a quarterly dividend of $0.9133 per share. The company’s dividend yield on September 25 stands at 2.69%.
With 71 hedge funds in our database holding positions at the end of Q2, 2022, The Procter & Gamble Company (NYSE:PG) is also one of the most widely held stocks by hedge funds on our list. Among them, Bridgewater Associates is the biggest stakeholder of The Procter & Gamble Company (NYSE:PG) as of the second quarter of 2022, with more than 6 million shares worth more than $970 million.
You can also take a look at 10 Best Healthcare Dividend Stocks to Buy Now and 10 Dividend Stocks with Over 20 Years of Dividend Increases.
