Consumer Staples Standouts: 3 Defensive Gems to Safeguard Your Portfolio


  • The consumer staples trio may be worth adding on any significant weakness moving forward.
  • Johnson & Johnson (JNJ): The pharmaceutical giant is also a leading consumer staples name.
  • Costco (COST): This grocer reported another quarter of strong sales as it continues to be a long-term hold.
  • Proctor & Gamble (PG): It provides a solid mix of both capital appreciation and dividend growth for long-term investors. 
consumer staples stocks to buy - Consumer Staples Standouts: 3 Defensive Gems to Safeguard Your Portfolio

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After covering essentials, consumers spend on discretionary items. But it’s the consumer staples items that make up the essential part of any budget. These items are by definition essentials, making the consumer staples giants who sell them automatically more defensive in nature.

In this market, that’s a great thing. Leading consumer staples stocks tend to generate long-term wealth. But, these companies also have proven their ability to provide stability in times of turmoil. In other words, when the economy is doing great, these companies can generate outsized revenue and profits. But if things take a turn for the worse, revenue and profit levels should remain relatively stable.

That’s the kind of setup many investors are looking for right now. But finding the right consumer staples giants to buy is easier said than done. Let’s look at three top names investors should be monitoring right now.

Johnson & Johnson (JNJ)

jnj healthcare stocks
Source: Raihana Asral /

Recently added to America’s Top 20 Innovative companies, pharmaceutical company Johnson & Johnson (NYSE:JNJ) comes first off on my list of top consumer staples stocks to buy. Founded over 140 years ago, JNJ’s main mission was to create an innovated global healthcare sector. So far, the company has done a great job.

Additionally, the company increased its dividend to $1.24 on June 4th, offering a 3.3% yield. With earnings easily covering the last dividend, reinvestment in the business is significant. The company’s forward projected earnings per share growth of 47.2% suggests a sustainable payout ratio around 49% going forward.

Trading at $152.67, the stock is undervalued, nearing its 52-week low of $143, making it a long-term buy. Compared to the industry, it’s discounted. With a diverse portfolio, JNJ stock is poised for long-term success.

Costco (COST)

Costco logo on a sign on a Costco store.

Costco (NASDAQ:COST) is a strong dividend growth stock, offering remarkable returns over the past decade and outperforming the benchmark index threefold. Its bulk buying model appeals well, especially during economic downturns. Its upscale customer base shops longer. Regular membership fee increases boost bottom-line figures without significant customer loss. 

Costco’s April sales surged over 7%, reaching $19.8 billion, a 7.1% increase from the previous year. Despite Easter timing affecting sales by 0.5%, the first 35 weeks saw $166.44 billion in net sales, up 7%. Comparable store sales, excluding gas and foreign exchange, rose 5.5%. The U.S., Canada and Other International divisions increased 5.2%, 5.9% and 7%, respectively. Additionally, e-commerce sales spiked by 14.8%.

Investors should expect further increases to enhance its already strong earnings. This is a long-term mega-cap stock that’s worth holding due to its offerings and relatively wide moat.

Procter & Gamble (PG)

A photo of a number of Procter & Gamble (PG) products.
Source: monticello /

Another consumer stock to own is Procter & Gamble (NYSE:PG). It remains a great company in which to invest because of its wide range of profitable product categories. Its portfolio of trusted brands ensures steady performance, especially in essential consumer product needs. As households demand cleaning and maintenance products, P&G benefits, similar to Home Depot’s trend. 

Despite a comparable price-earnings ratio to the S&P 500, P&G offers a solid 2.5% dividend yield for reliable income. In Q3 of 2024, the grooming business saw double-digit organic sales growth, while hair and home care categories showed solid single-digit growth.

However, skin, personal and baby care categories faced declines. P&G increased its market share, with the U.S. all-outlet value share up by 0.1% and the European market up by 100 basis points in the last three months. Therefore, these gains highlight P&G’s competitive edge and brand initiatives.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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