In this article, we discuss the 10 best stocks to invest in for a conservative stock portfolio.
Latest reports indicate that hedge funds have been dumping the shares of technology and media companies at the fastest rate in the past six months. For those who mimic the investing strategy of hedge funds for maximum financial gains, this is cause for alarm. The dumping of tech and media firms by billionaires suggests that it is time for investors to consider pouring their money into more conservative stocks to balance portfolios against riskier growth options. These conservative stocks, also sometimes called blue-chip stocks, are well-established companies with a history of stable earnings, reliable dividends, and strong market positions. These stocks are typically less volatile, making them appealing to risk-averse investors seeking steady growth and income. However, recent developments in the global economy and political landscape may influence the performance and attractiveness of conservative stocks.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
Prominent analysts are also optimistic about the success of conservative stocks this year. For example, per a report published by finance news platform Barron’s, investment bank Stifel predicts that the S&P 500, which gained 28% in 2024 to reach 6,084 points, may face a correction to the mid-5,000s. Barry Bannister, the Chief Equity Strategist at the bank, attributed the anticipated downturn to slowing GDP growth, persistent inflation, and potential disruptions from the Trump administration. To navigate this expected turbulence, Stifel recommended investing in conservative stocks less vulnerable to economic swings. Similar observations were made recently by Bill Stone from Glenview Trust, who recommended investing in conservative stocks from the healthcare and consumer-staples sectors for 2025.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
For this article we scanned Insider Monkey’s database and picked 10 conservative (safe, reliable and defensive) stocks with the highest number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A financial planner analysis their portfolio and making decisions on stocks and assets.
Conservative Stock Portfolio: Best Stocks To Invest In
10. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 79
The Procter & Gamble Company (NYSE:PG) provides branded consumer packaged goods. There are several reasons that make the company one of the best conservative stocks to invest in. For example, the firm has an impressive dividend history, with close to seven decades of consistent growth in dividend payouts. The dividend yield is also attractive, hovering at around 2.4%. Since the company operates in the consumer staples sector, where demand remains stable regardless of economic conditions, it has a track record of steady revenue and earnings growth. In addition, the company has a strong balance sheet with global market presence. All of these factors make the firm a top choice for conservative investors.
9. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 81
The Coca-Cola Company (NYSE:KO) is a beverage company. It owns the Coca-Cola brand that makes the top-selling drink in almost all countries around the globe, barring a few exceptions. The impressive financial profile of the firm is evident by the recent quarterly earnings report. In guidance numbers for 2025, Coca-Cola forecasts organic revenue growth of 5%-6% and comparable currency-neutral EPS growth of 8%-10% for 2025. John Murphy, the CFO of the firm, noted during the earnings call that pricing would moderate as inflationary pressures ease, with intense inflation pricing in certain markets expected to play a smaller role. The company projects approximately $9.5 billion in free cash flow for 2025.
8. Costco Wholesale Corporation (NASDAQ:COST)
Number of Hedge Fund Holders: 95
Costco Wholesale Corporation (NASDAQ:COST) engages in the operation of membership warehouses. The firm exhibits characteristics typical of conservative stocks. For example, the membership model of the company has high renewal rates, allowing for a stable revenue stream. The revenue and earnings growth rival that of growth stocks, even though the firm operates in the non-cyclical consumer staples sector. The low beta value indicates that the firm can weather economic downturns better than other businesses, making it a top pick for a conservative stock portfolio. The firm recently announced January sales numbers, with total comparable sales of 7.5%, much ahead of the consensus estimate of 4.9%.
7. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 98
Johnson & Johnson (NYSE:JNJ) researches and develops, manufactures, and sells various products in the healthcare field. The firm is one of the best conservative stocks to invest in because of its defensive nature, consistent dividends, strong financials, and low volatility. However, investors should keep in mind that the shares could be impacted by recent reports that US President Donald Trump has warned a group of major US drugmakers that his administration is set to impose tariffs on pharmaceutical goods, and they should start moving their manufacturing businesses to the US. The warning was issued during a meeting of Trump with CEOs of major US-based drug companies.
6. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 102
Philip Morris International Inc. (NYSE:PM) is a tobacco company. Even though the company has built one of the most solid businesses in the world on the back of tobacco products like cigarettes, it has lately started to diversify into smoke-free products. The stability provided by the core business has allowed the firm to grow at a faster than usual pace in the conservative stock domain. For example, the firm projects HTU adjusted IMS volume growth of 10-12% for 2025, in line with 2024 levels. It also forecasts US ZYN shipment volumes of 780-820 million cans for 2025, reflecting an increase of 200-240 million cans over 2024 levels. Organic net revenue growth for 2025 is targeted at 6-8%, supported by strong growth in smoke-free categories and resilient combustibles.
5. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 115
Walmart Inc. (NYSE:WMT) engages in the operation of retail, wholesale, and other units worldwide. It is among the largest retailers in the world with strong revenue and earnings growth over the past few years. The company has expanded into the ecommerce market while maintaining a steady flow of earnings from the core operations in physical stores. This has allowed for a healthy growth trajectory. The dividend profile of the firm is also best in class with a history of consistent and growing payouts stretching back more than fifty years. The firm projects fiscal 2026 consolidated net sales growth of 3%-4%, with operating income growing faster at 3.5%-5.5%. Adjusted EPS is expected to range between $2.50 and $2.60.
4. UnitedHealth Group Incorporated (NYSE:UNH)
Number of Hedge Fund Holders: 150
United Group Incorporated (NYSE:UNH) operates as a diversified health care company in the United States. Since the firm operates in the healthcare and insurance sector, it is able to stay relevant regardless of economic conditions. Historically, the demand for health insurance, medical services, and healthcare technology remains steady even during recessions. The firm has demonstrated consistent revenue and earnings growth, while maintaining steadily growing dividend payouts. On February 24, the company declared a quarterly dividend of $2.10 per share, in line with previous. The forward yield was 1.8%. The company is targeting mid-teens EPS growth for the upcoming fiscal year.
3. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. Even though the company operates in the volatile tech sector, it has remarkably earned the status of a conservative stock by demonstrating stability and reliability even as other companies around it falter, either due to macroeconomic conditions or tech-specific crashes. For eleven years, Apple has paid a growing dividend to shareholders. It has a beta of 1.16, one of the lowest in the tech world, indicating that the stock is not prone to volatility. The firm recently announced that it would be investing $500 billion into the US economy as the Trump administration urges companies to bring manufacturing jobs back to the US.
2. Visa Inc. (NYSE:V)
Number of Hedge Fund Holders: 181
Visa Inc. (NYSE:V) is a payments technology firm. One of the main reasons why the stock is a top choice for risk-averse investors is that it operates in the global payments industry. This industry handles trillions of dollars in transactions every year, and Visa is one of the biggest and most reliable players in this field. Since the firm does not issue any credit, but rather only charges transaction fees, it is somewhat shielded from the credit risks linked to other financial stocks. The firm also has one of the highest profit margins in the industry and has delivered double digits revenue and EPS growth consistently. It has paid a growing dividend to shareholders for the last sixteen years as well.
1. Microsoft Corporation (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corporation (NASDAQ:MSFT) is a technology company. The company is perhaps one of the fastest growing conservative stocks in the world. The company has solid financials, a reliable dividend record, and has demonstrated resilience against numerous economic downturns. It is poised to improve on this profile further as it invests heavily into artificial intelligence. The company recently affirmed that it is on track to spend $80 billion on AI infrastructure this year. The stock was also recently named among a group of equities heavily favored by hedge fund billionaires in a report by investment bank Goldman Sachs. It also recently unveiled a new quantum computing chip.
While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a stock that is more promising than Microsoft Corporation (NASDAQ:MSFT) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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