In this article, we discuss the 5 best S&P 500 stocks to buy according to Bridgewater Associates. To read the details about the firm’s performance and Q2 bets, go directly to the 11 Best S&P 500 Stocks To Buy according to Bridgewater Associates.
5. Costco Wholesale Corporation (NASDAQ:COST)
Percentage of Bridgewater Associates’ portfolio as of Q2 2023: 2.68%
Number of Hedge Fund Holders: 67
Costco Wholesale Corporation (NASDAQ:COST), more commonly known as Costco, is one of the biggest operators of membership-only warehouses. The company is also the owner and operator of self-service gas stations, pharmacies, food courts, and more.
On October 5, Telsey Advisory raised the price target on Costco Wholesale Corporation (NASDAQ:COST) stock to $600 from $575 and kept an Outperform rating. The analyst made a note of the company’s comp sales growth in September and the 4.9% total traffic increase in the research note.
On November 1, Costco Wholesale Corporation (NASDAQ:COST) reported that October net sales grew 4.5% YoY to $18.53 billion, up from $17.73 billion. The company’s total comparable sales also increased by 3%.
In the last three months, 24 Wall Street analysts covered Costco Wholesale Corporation (NASDAQ:COST) with an average price target of $600.22. Out of the 24 analysts, 18 keep a Buy rating on the stock.
Cooper Investors mentioned Costco Wholesale Corporation (NASDAQ:COST) in its third quarter 2023 investor letter. Here is what it said:
“With the market rally in the first half of 2023 driving double digit returns we took the opportunity early in the quarter to reassess Value Latency embedded in the portfolio. The spotlight was on more highly valued stocks that represent some of our longest held positions and among the better performers over the years. The outcome is that we have exited several long-term positions at what we consider attractive prices, where the balance of Risk Adjusted Value Latency was no longer in our favour.
We remain admirers of these businesses and they remain on our watchlist, but the reality is their appeal is widely recognised today. Management have executed well on earnings growth, but returns have also come from substantial multiple re-ratings that we see as unlikely to reoccur from today’s higher base.
Costco Wholesale Corporation (NASDAQ:COST) was acquired in March 2015 at ~$150 and has more than tripled over its holding period to ~$550 today, delivering a total return with dividends reinvested of ~330% in USD or IRR of 20%. Over the journey the multiple re-rated from 25 times to ~35 times.”
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4. PepsiCo, Inc. (NASDAQ:PEP)
Percentage of Bridgewater Associates’ portfolio as of Q2 2023: 2.93%
Number of Hedge Fund Holders: 68
PepsiCo, Inc. (NASDAQ:PEP) is one of the biggest fast-moving consumer goods companies in the world known for its signature soft drink, Pepsi. According to Piper Sandler’s Fall 2023 Taking Stock With Teens survey, PepsiCo, Inc. (NASDAQ:PEP) owns three of the top 5 snacks preferred by teenagers.
In its third quarter, PepsiCo, Inc. (NASDAQ:PEP) posted an EPS of $2.25, outperforming the analyst estimates by $0.10. The company generated a revenue of $23.45 billion which was in line with the market expectations. Its organic sales grew by 8.8%, compared to the forecasted 8.3%. PepsiCo, Inc. (NASDAQ:PEP) updated its EPS outlook for FY 2023 and now expects a 13 percent core constant currency EPS growth, up from the previous guidance of 12%.
In the second quarter, Bridgewater Associates owned over 2.56 million shares of PepsiCo, Inc. (NASDAQ:PEP) worth $475.379 million, representing 2.93% of the firm’s 13F portfolio.
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3. The Coca-Cola Company (NYSE:KO)
Percentage of Bridgewater Associates’ portfolio as of Q2 2023: 3.05%
Number of Hedge Fund Holders: 61
The Coca-Cola Company (NYSE:KO) is a famous multinational beverage company that produces and sells alcoholic drinks and several non-alcoholic beverages like water, carbonated drinks, sports drinks, plant-based drinks, and more. It is one of the best S&P 500 stocks to buy.
On October 19, The Coca-Cola Company (NYSE:KO) announced a quarterly dividend of $0.46 which is payable by December 15 to shareholders of record on December 1. As of November 4, the company’s dividend yield is 3.24% and the corporation has been increasing its dividend for more than six decades.
On October 24, The Coca-Cola Company (NYSE:KO) released its Q3 earnings result which showed that it beat analysts’ estimates by $0.05 with a non-GAAP EPS of $0.74. The company’s revenue of $12 billion grew 8.1% YoY, topping the estimates by $580 million.
On October 16, The Coca-Cola Company (NYSE:KO) announced that it will be expanding its small portfolio of alcoholic beverages by entering into a partnership with Pernod Ricard SA (OTC:PDRDF) to introduce a ready-to-drink pre-mixed cocktail of Absolut Vodka & Sprite in 2024.
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2. Johnson & Johnson (NYSE:JNJ)
Percentage of Bridgewater Associates’ portfolio as of Q2 2023: 3.25%
Number of Hedge Fund Holders: 88
Johnson & Johnson (NYSE:JNJ) is a New Jersey-based manufacturer and seller of pharmaceuticals, medical devices, and consumer products.
In Q2, hedge fund sentiment was positive toward Johnson & Johnson (NYSE:JNJ)’s stock as the number of hedge fund investors in the company increased to 88 from 86 in Q1. Dalio’s Bridgewater Associates was the largest stakeholder in the company with 3.18 million shares worth $526.59 million.
On October 31, it was announced that Johnson & Johnson (NYSE:JNJ) will receive a payment of nearly $1 billion from GSK plc (NYSE:GSK) for exclusive rights for the development and commercialization of the hepatitis B therapy by Johnson & Johnson (NYSE:JNJ).
Johnson & Johnson (NYSE:JNJ) was mentioned in ClearBridge Investments’ third quarter 2023 investor letter. Here is what it said:
“The health care space provided some opportunities in the quarter, as we increased our exposure to medical device company Becton, Dickinson as well as large cap pharmaceutical company Johnson & Johnson (NYSE:JNJ). Johnson & Johnson recently spun out its consumer health care business, becoming a more focused yet broadly diversified pharmaceutical and medtech company.”
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1. The Procter & Gamble Company (NYSE:PG)
Percentage of Bridgewater Associates’ portfolio as of Q2 2023: 4.32%
Number of Hedge Fund Holders: 74
The Procter & Gamble Company (NYSE:PG) is one of the biggest manufacturers and sellers of consumer packaged goods in the U.S. The company sells its products under many famous brands, including but not limited to, Pampers, Puffs, Pantene, and Febreze. The Procter & Gamble Company (NYSE:PG) is the best S&P 500 stock to buy according to Bridgewater Associates.
On October 22, Bernstein raised the price target on The Procter & Gamble Company (NYSE:PG) stock to $155 from $153 and maintained a Market Perform rating. The firm credited the company’s Q1 2024 results beating the estimates for the raise in price target.
On October 18, The Procter & Gamble Company (NYSE:PG) posted Q1 2024 non-GAAP EPS of $1.83, surpassing the analysts’ estimates by $0.11. The revenue posted by the company beat the estimates by $290 million and grew 6.1% YoY to $21.87 billion. When presenting its FY2024 outlook, the company outlined that its expectation for dividend payout is $9 billion and it also expects to repurchase $5 billion to $6 billion of common shares in fiscal 2024.
According to Insider Monkey’s database, the number of hedge funds with a stake in The Procter & Gamble Company (NYSE:PG) went down to 74 in Q2 from 75 in the previous quarter. However, the total hedge fund investments increased to $5.346 billion in Q2 from $4.66 billion in the previous quarter. Terry Smith’s Fundsmith LLP increased its stake in the company by a whopping 183% to nearly 4.85 million shares worth $735.814 million and was the company’s most prominent shareholder.
The Procter & Gamble Company (NYSE:PG) was mentioned by ClearBridge Investments in its second quarter 2023 investor letter. Here is what it said:
“Reinforcing defensive exposure and pushing our consumer staples positioning from underweight to overweight the benchmark, we added The Procter & Gamble Company (NYSE:PG), a leading consumer products company with leading franchises in a variety of stable categories, including fabric care, baby, beauty and health. It is a high-quality company with a track record of superior growth, market share gains and attractive returns on capital. It also has defensive attributes when economic conditions deteriorate. Procter & Gamble is a sustainability leader with a demonstrated commitment to addressing environmental and social objectives in how it manages the business, and it has above-average corporate governance practices. Many Procter & Gamble products have a positive impact by promoting hygiene, self-care or health.”
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You can also look at the 14 Best Cyclical Stocks To Invest In and the 20 Most Popular Rum Brands in the U.S.
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