In this article, we will take a look at the 10 consumer stocks to buy for a retirement stock portfolio.
Today’s retirees face growing uncertainty about the future of Social Security. While many financial advisors and economists specializing in Social Security recommend delaying retirement benefits until age 70 to maximize monthly payouts, only 10% of pre-retirees intend to wait until that age, according to the Schroders 2024 U.S. Retirement Survey. A large majority plan to claim benefits earlier, often before reaching their full retirement age of 67 (for those born in 1960 or later). Specifically, 43% of non-retirees plan to file before 67, with 23% intending to claim at 65 and 12% planning to claim as early as 62. This trend is further influenced by financial insecurity. According to the Transamerica Institute, only 1 in 5 middle-class individuals feel confident in their ability to retire comfortably or maintain their lifestyle during retirement.
According to the Bureau of Labor Statistics, the consumer price index (CPI), which tracks the average change in prices for consumer goods and services, rose 2.6% year-over-year in October. This marks an increase from the 2.4% annual growth rate recorded in September. Month-over-month, prices grew by 0.2%, matching consensus expectations and maintaining the same pace observed over the past three months. However, President-elect Donald Trump’s proposed policies, including increased tariffs and expanded government spending, could stimulate economic growth while also exacerbating inflationary pressures. Despite inflation easing from its peak in mid-2022, it continues to weigh heavily on U.S. households.
Job creation in October slowed to its weakest pace since late 2020, reflecting the impact of storms in the Southeast and a major labor strike. Nonfarm payrolls rose by just 12,000, a sharp decline from September and far below the Dow Jones estimate of 100,000. October’s report marked the smallest monthly gain since December 2020. Despite the weak job growth, the unemployment rate held steady at 4.1%, meeting expectations. A broader measure of unemployment, which accounts for discouraged workers and those in part-time roles for economic reasons, also remained unchanged at 7.7%. The Bureau of Labor Statistics noted that the Boeing strike likely accounted for a loss of 44,000 jobs in the manufacturing sector, which saw an overall reduction of 46,000 positions. Federal Reserve Chair Jerome Powell, speaking on the labor market early in November, expressed concerns regarding the labor market:
“The labor market has cooled a great deal from its overheated state of two years ago and is now essentially in balance. It is continuing to cool, albeit at a modest rate, and we don’t need further cooling.”
These developments have raised concerns at the Federal Reserve, as cracks in the labor market emerge even as year-over-year inflation moderates. Elevated interest rates, implemented to combat inflation, could pose risks to the labor market and broader economic growth. In response to these challenges, the Fed took the unusual step in September of lowering its benchmark short-term interest rate by half a percentage point—twice the typical quarter-point adjustments policymakers prefer—despite the economy still expanding.
See also: Retirement Stock Portfolio: 12 Safe Tech Stocks To Consider.
Although workers’ and retirees’ confidence in achieving a financially secure retirement hasn’t fully recovered from the sharp decline in 2023, there are encouraging signs of recovery, according to the Employee Benefits Research Institute (EBRI). The EBRI’s 2024 Retirement Confidence Survey revealed that 68% of workers and 74% of retirees feel confident about having sufficient funds to live comfortably throughout retirement. These figures show modest improvement from 2023, when 64% of workers and 73% of retirees expressed similar confidence. However, inflation remains a significant concern, with 31% of workers and 40% of retirees citing it as a key reason for their lack of confidence. On a positive note, about 80% of workers see the SECURE 2.0 Act of 2022’s provision for employer-sponsored emergency savings accounts as a valuable benefit. Recent guidance from the Department of Labor and IRS has also provided clarity on how plan sponsors can integrate these emergency savings accounts into their offerings.
During economic turbulence, investors often turn to low-risk stocks that offer stable returns in the face of heightened uncertainty. In that regard, consumer staples stocks typically emerge as a favored option during such periods, given their ability to weather macroeconomic challenges. The demand for essential goods remains steady regardless of economic conditions, as consumers maintain consistent purchasing habits in both good times and bad.
Our Methodology
To compile our list of the 10 best consumer stocks for a retirement portfolio, we focused on companies within the Consumer Staples Select Sector SPDR Fund. These companies were chosen for their historical resilience during economic downturns and well-established operations. Additionally, we prioritized consumer stocks that offer stable dividend yields, supported by sustainable payout ratios (less than 70%) and a proven history of dividend payments. The selected stocks were ranked based on their hedge fund sentiment, as of Q3 2024.
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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. General Mills, Inc. (NYSE:GIS)
Dividend Yield: 3.76%
Number of Hedge Fund Holders: 30
General Mills, Inc. (NYSE:GIS) is a prominent American multinational corporation specializing in the production and distribution of branded processed consumer foods through retail channels. Established near Saint Anthony Falls in Minneapolis along the Mississippi River, the company initially gained fame as a major flour milling operation.
The consumer goods company is set to strengthen its position in the lucrative pet food market with the acquisition of Whitebridge Pet Brands’ North American operations. The $1.45 billion deal includes premium pet food and treat brands such as Tiki Pets and Cloud Star. This acquisition marks the latest in a series of strategic moves by General Mills, Inc. (NYSE:GIS) to expand its footprint in the pet food sector, a market valued at $52 billion in U.S. retail sales.
On September 19, Stifel analysts raised their price target for General Mills, Inc. (NYSE:GIS) shares from $70 to $82 while maintaining a Buy rating. The revision followed the company’s fiscal Q1 2025 earnings report, where earnings per share met market expectations. That said, the company’s organic sales dipped by 1%, impacted by stable volumes and a 1% decline from pricing and product mix due to a negative mix effect. Despite the flat performance, General Mills, Inc. (NYSE:GIS) reaffirmed its fiscal year 2025 financial outlook, expecting organic sales to remain steady or increase by up to 1%, with EPS projected to range between a 1% decline and a 1% rise on a constant currency basis.
9. Bunge Global SA (NYSE:BG)
Dividend Yield: 3.09%
Number of Hedge Fund Holders: 33
Bunge Limited SA (NYSE:BG) is a prominent American food company, recognized as the world’s largest oilseed processor. The company boasts a diversified business model that spans across the commodity, food oil, bakery, and other industries.
At the end of October, BMO Capital Markets adjusted its outlook on BG, lowering its price target to $110 from $120 while maintaining an Outperform rating. This revision followed the company’s third-quarter earnings report, where Bunge posted earnings per share of $2.29, exceeding both BMO’s estimate of $2.16 and the consensus estimate of $2.14. The stronger-than-expected results were driven by increased profits in the Merchandising and Refined sectors, along with reduced corporate expenses.
Although there was some underperformance in the Milling and Sugar segments, Bunge Limited SA (NYSE:BG) raised its 2024 EPS guidance to $9.25 and above, despite the anticipated $0.35 impact from the sale of its sugar business. BMO also adjusted its 2024 EPS estimates to reflect this sale, while leaving its 2025 projections unchanged.
Looking ahead, if commodity prices remain low, this could stimulate demand in emerging economies, where much of the global population resides. Bunge’s extensive global network positions it well to optimize operations and maintain healthy margins. Additionally, the company has announced the acquisition of Viterra, a global player in connecting agricultural producers and consumers. With EU approval already secured, the merger is poised to further strengthen Bunge’s role in the global food supply chain.
8. Constellation Brands, Inc. (NYSE:STZ)
Dividend Yield: 1.69%
Number of Hedge Fund Holders: 36
Constellation Brands, Inc. (NYSE:STZ) is a prominent producer and marketer of beer, wine, and spirits, renowned for its portfolio of premium imported beer brands such as Corona Extra, Modelo Especial, and the Modelo Cheladas series.
In its second-quarter fiscal 2025 results, the company reported adjusted earnings of $4.32 per share, marking a 14% year-over-year increase and surpassing analysts’ expectations of $4.08. Net sales reached $2.9 billion, a 2.9% increase from the prior year, though slightly below the consensus estimate of $2.95 billion. While management acknowledged ongoing macroeconomic pressures affecting the beverage and alcohol market, it also highlighted the strength of the Beer Business segment, which accounts for over 80% of revenues. This segment experienced a 6% increase in net sales, driven by a 4.6% growth in shipment volumes.
On October 15, BMO Capital adjusted its price target for Constellation Brands, Inc. (NYSE:STZ) to $305 from $315 while maintaining an Outperform rating. The revision followed the company’s Q2 earnings report and discussions with Investor Relations. Despite the reduced target, BMO remains confident in Constellation’s strong beer business fundamentals, expecting further improvements in beer margins to bolster the company’s financial performance.
Coho Relative Value Equity Strategy stated the following regarding Constellation Brands, Inc. (NYSE:STZ) in its Q2 2024 investor letter:
“We also eliminated Conagra (CAG) in favor of a better risk/return for Constellation Brands, Inc. (NYSE:STZ). We are encouraged by the Constellation Board’s decision to eliminate the dual voting share class and reprioritize capital allocation away from acquisitions and towards returns to shareholders. With capital spending expected to decline and leverage near the company’s target, more cash flow should be available for shareholders. STZ is now focused on the higher growth and the higher margin premium beer category, which they dominate with Corona Extra, Modelo Especial and Pacifico. Additionally, the Wine and Spirits business, which has been disappointing is no longer a meaningful part of STZ’s business as it now accounts for less than 10% of overall earnings. We expect STZ to deliver low double-digit growth in both earnings and dividends for many years to come, which is consistent with the Board’s recent approval of a 13.5% dividend hike.”
7. Lamb Weston Holdings Inc. (NYSE:LW)
Dividend Yield: 1.89%
Number of Hedge Fund Holders: 37
Lamb Weston Holdings Inc. (NYSE:LW) is a leading food processing company and one of the world’s largest producers of frozen potato products, including French fries, waffle fries, and other frozen offerings. The company primarily serves restaurant chains and food service distributors, with retail sales contributing less than 20% of its revenue.
On October 18, Citi raised its price target for Lamb Weston Holdings Inc. (NYSE:LW) from $76 to $90 while maintaining a Buy rating. This update followed activist filings by JANA Partners, which disclosed a 5.0% stake in the company, and Continental Grain, holding a 0.4% interest. Citi expressed optimism about Lamb Weston’s growth prospects, citing fundamental improvements such as volume recovery, enhanced operating leverage, and a more favorable pricing environment as key drivers for potential share price appreciation in the coming year.
For Q1 fiscal year 2025, Lamb Weston Holdings Inc. (NYSE:LW) reported mixed results. While total sales experienced a slight 1% year-over-year decline, the company exceeded expectations on sales performance due to a better volume and price mix. Adjusted EBITDA for the quarter came in at $290 million, reflecting solid operational execution despite broader challenges.
Diamond Hill Long-Short Fund stated the following regarding Lamb Weston Holdings, Inc. (NYSE:LW) in its Q2 2024 investor letter:
“Still-rising valuations have made identifying attractively valued, long ideas increasingly challenging — though we still found a few in Q2 that we believe the market is overlooking amid its increasingly narrow focus on the mega-cap technology stocks dominating the major indices. We established new long positions in VeriSign, Ulta Beauty, Sysco Corporation and Lamb Weston Holdings, Inc. (NYSE:LW) during the quarter.
Lamb Weston is the US’s leading supplier of frozen French fries. Shares have been pressured amid a slowdown in quick-service restaurant traffic — which gave us a compelling opportunity to capitalize on what we consider a large dislocation in price and intrinsic value.”
6. Kimberly-Clark Corporation (NYSE:KMB)
Dividend Yield: 3.58%
Number of Hedge Fund Holders: 45
Kimberly-Clark Corporation (NYSE:KMB) is a leading American manufacturer specializing in personal care and hygiene products. The company operates through three main segments: Personal Care, Consumer Tissue, and K-C Professional. It markets its products under well-known brands such as Kleenex, Scott, Cottonelle, DryNites, and Huggies.
On October 22, CFRA updated its financial outlook for Kimberly-Clark Corporation (NYSE:KMB), raising the price target from $138 to $151 while maintaining a Hold rating. The revised target reflects a valuation of 19.75 times CFRA’s updated 2025 earnings per share projection of $7.66, up by $0.32 from earlier estimates. The 2024 EPS forecast was also adjusted upward by $0.13 to $7.41, aligning with the company’s five-year forward price-to-earnings (P/E) mean. This comes after the company reported third-quarter adjusted EPS of $1.83, a 4.9% year-over-year increase that exceeded estimates by $0.12. However, quarterly revenue declined 3.5% year-over-year to $4.9 billion, about 2% below expectations, with organic growth slowing to 1%, mainly due to pricing and product mix changes.
The company revised its full-year organic sales growth outlook to 3-4%, down from the prior mid-single-digit forecast, citing challenges from shifts in retail inventory levels. Despite this, Kimberly-Clark Corporation (NYSE:KMB) reaffirmed its guidance for adjusted operating profit and adjusted EPS to grow in the mid-to-high teens percentage range on a constant-currency basis.
Looking ahead, Kimberly-Clark Corporation (NYSE:KMB) remains focused on delivering consumer solutions across diverse price points and accelerating operational investments to strengthen its long-term growth potential.
5. Mondelez International, Inc. (NASDAQ:MDLZ)
Dividend Yield: 2.92%
Number of Hedge Fund Holders: 51
Mondelez International, Inc. (NASDAQ:MDLZ), a Chicago-based multinational company, is a leader in the confectionery, food, beverages, and snack food industries. The company currently offers a quarterly dividend of $0.47 per share and has consistently increased its dividend payouts for the past nine years.
In its third-quarter results, Mondelez International, Inc. (NASDAQ:MDLZ) exceeded expectations, driving a 1.5% increase in shares during after-hours trading. The company reported adjusted earnings per share of $0.99, surpassing analyst estimates of $0.85, while its quarterly revenue reached $9.2 billion, above the consensus estimate of $9.11 billion, reflecting a 1.9% year-over-year increase. Organic net revenue, which excludes acquisitions and currency impacts, also rose 5.4%.
The company also reaffirmed its 2024 guidance, expecting organic net revenue growth at the high end of the 3% to 5% range, with high-single-digit adjusted EPS growth on a constant currency basis. Mondelez International, Inc. (NASDAQ:MDLZ) anticipates over $3.5 billion in free cash flow for the year.
Additionally, Mondelez International, Inc. (NASDAQ:MDLZ) announced it has signed an agreement to acquire a majority stake in Evirth, advancing its strategy to drive growth in the cakes and pastries category, alongside its core focus areas of chocolate and biscuits.
4. Colgate-Palmolive Company (NYSE:CL)
Dividend Yield: 2.12%
Number of Hedge Fund Holders: 54
Colgate-Palmolive Company (NYSE:CL), a multinational corporation headquartered on Park Avenue in Midtown Manhattan, New York City, specializes in producing and distributing a wide array of household, healthcare, personal care, and veterinary products. The company has overhauled its innovation model, increased marketing investments, utilized its global reach across various price tiers, and expanded new capabilities across the organization to enhance brand strength and increase household penetration.
On October 25, the company reported its third-quarter 2024 earnings. The company’s net sales rose 2.4% year-over-year to $5 billion, while organic sales grew by an impressive 6.8%. In addition, net income increased to $737 million, or $0.90 per share, compared to $708 million, or $0.86 per share, in the prior year. Looking ahead, Colgate-Palmolive Company (NYSE:CL) anticipates full-year 2024 net sales growth between 3% and 5%, with organic sales expected to grow by 7% to 8%. The company also projects adjusted EPS growth of 10% to 11%, reflecting strong confidence in its ongoing performance.
Following these results, TD Cowen revised its outlook on Colgate-Palmolive Company (NYSE:CL), lowering the price target from $115 to $110 while maintaining a Buy rating. The firm noted that the reduced price target presents an appealing entry point for long-term investors, especially with an eye toward 2025. Despite the adjustment, the analysis underscores Colgate-Palmolive’s strong position in the consumer packaged goods (CPG) sector.
ClearBridge Investments mentioned Colgate-Palmolive Company (NYSE:CL) in its Q2 2024 investor letter. Here is what the firm said:
“Colgate-Palmolive, added to the portfolio in 2023, started outperforming materially toward the tail end of last year as growth, margin and market share momentum began to turn favorably, and that momentum has continued year to date as the stock has nicely outperformed the large cap staples group. The fundamental upside has been driven by a combination of healthy organic growth (with positive volumes), good gross margin progression, and strong re-investment spending supporting market share gains and future growth.”
3. The Procter & Gamble Company (NYSE:PG)
Dividend Yield: 2.36%
Number of Hedge Fund Holders: 68
The Procter & Gamble Company (NYSE:PG), based in Cincinnati, Ohio, is a global leader in consumer goods. Founded in 1837 by William Procter and James Gamble, the company operates an extensive portfolio of branded products across diverse segments, including Beauty, Grooming, Health Care, Fabric & Home Care, and Baby, Feminine & Family Care.
In its fiscal 2025 first-quarter earnings report, The Procter & Gamble Company (NYSE:PG) missed sales and net income estimates but exceeded expectations for adjusted profit. Sales declined 1% year-over-year to $21.74 billion, falling short of the $21.99 billion consensus estimate, while net income totaled $3.99 billion, down from $4.56 billion the previous year and below the $4.60 billion forecast. However, the company’s adjusted profit, accounting for $800 million in restructuring costs tied to its Argentina and Nigeria operations, reached $4.76 billion, slightly surpassing analysts’ expectations.
On October 23, Truist Securities raised its price target for The Procter & Gamble Company (NYSE:PG) shares to $180 from $175, maintaining a Buy rating. Following the Q1 earnings report, Truist revised its fiscal 2025 sales forecast to $85.785 billion, down from $85.932 billion, while adopting a more positive outlook for fiscal 2026, increasing the projection to $88.967 billion from $88.578 billion. Additionally, the firm raised its Core Earnings Per Share estimates, projecting $6.95 for fiscal 2025, up from $6.87, signaling confidence in Procter & Gamble’s future profitability.
2. Costco Wholesale Corporation (NASDAQ:COST)
Dividend Yield: 0.50%
Number of Hedge Fund Holders: 75
Costco Wholesale Corporation (NASDAQ:COST) operates a membership-based warehouse club chain, offering bulk pricing on products ranging from groceries and electronics to household goods.
The company demonstrated strong financial performance in Q4 2024, with revenue rising 1% year-over-year to $79.7 billion and net income growing 9% to $2.354 billion. E-commerce comparable sales surged by 18.9%, and after adjustments, growth was even more robust at 19.5%. Costco Wholesale Corporation (NASDAQ:COST) continues to expand its digital footprint through initiatives like its partnership with Uber, now available in 17 U.S. states and Canada, enhancing customer convenience and reach.
Tigress Financial Partners reiterated a Buy rating on Costco Wholesale Corporation (NASDAQ:COST) shares and raised the price target to $1,065. The firm emphasized Costco’s ability to deliver above-average Return on Capital and increasing Economic Profit as drivers of long-term shareholder value. With a 12-month price target of $1,065, Tigress projects a total return potential, including dividends, exceeding 20% from current levels.
Parnassus Core Equity Fund stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q2 2024 investor letter:
“Costco Wholesale Corporation (NASDAQ:COST) posted strong results for the third quarter of fiscal 2024, with a robust increase in net sales and strength in both U.S. and international markets. Bucking the trend of weakening demand for discretionary items that has pressured many other retailers, Costco reported growth in nonfood sales.”
1. Walmart Inc. (NYSE:WMT)
Dividend Yield: 0.95%
Number of Hedge Fund Holders: 88
Walmart Inc. (NYSE:WMT), based in Bentonville, Arkansas, is a leading retailer operating an expansive network of hypermarkets, discount stores, and grocery outlets across the United States.
Piper Sandler reaffirmed its confidence in Walmart Inc. (NYSE:WMT) with an Overweight rating and a $93 price target, citing the retailer’s strong Q3 performance. The retail giant demonstrated growth across all business segments, product categories, and omni-channel metrics, solidifying its position as a top choice for higher-income households. Notably, 75% of its market share gains came from families earning over $100,000 annually.
Walmart’s high-margin revenue streams, including Marketplace and Supplier Advertising, are steadily growing, contributing to a favorable financial outlook. General Merchandise achieved year-over-year growth for the first time in seven quarters. Meanwhile, E-commerce remains a key driver, with U.S. sales increasing 22% and global sales up 27%, while segment losses narrowed further during the quarter.
The company’s focus on cost optimization and operational efficiency has supported profit margins amid supply chain challenges. Additionally, international expansion, particularly in markets like Mexico and India, offers significant growth potential. Walmart’s reliable dividend payouts also enhance its appeal to retirement-focused investors.
While we acknowledge the potential of WMT, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than WMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
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