Companies cycle through varying earnings, economic conditions, and regulatory issues - all of which affect their share prices. However, not all companies have these cycles to worry about - and are considered non-cyclical. Consumer staple stocks are one such example.
Consumer staples are essential goods or products that are always in high demand, regardless of the economy's current state or the buyer’s personal financial situation. That means certain companies can expect the cash to keep rolling throughout the year. Of course, a bit more nuance is required here, like how well the company has positioned itself in its niche, its pricing strategy, and how strong the brand loyalty is. Even within the consumer staples sector, competition can be fierce.
So, how do you pick the best of the hundreds of consumer staple stocks? Well, you can choose ones that pay dividends and are highly rated by Wall Street. So, today, let’s look at the top consumer staple stocks that offer yields.
How I Came Up With This List
Using Barchart’s Stock Screener, I used the following filters for screening:
- Annual Dividend Yield: 0.01% and above. This ensures that I get only dividend-paying stocks on the list.
- Number of Analysts: 12 and above.
- Current Analyst Rating: 4.5 to 5 (Strong Buy).
- Watchlists: Consumer Staple Stocks. More than 200 consumer staple stocks are in the market, and I have them all right here. These watchlists make it easy for me to analyze different types of stocks.
After running the scan, I got three results:
Now, let’s talk about them, starting with the one with the highest dividend yield:
Coca-Cola Company (KO)
No top-rated, dividend-paying consumer staple stock list is complete with one of the best out there, the Coca-Cola Company. This beverage behemoth has operations worldwide, and its over 200 brands include some of the top-selling drinks globally, including their namesake Coke, Sprite, Minute Maid, Dasani, and Fanta.
Coca-Cola is also a beloved dividend stock, earning the titles of Aristocrat (25+ years of increased dividends), King (50+ years), and Zombie (100+ years). Warren Buffet famously invested in KO stock in the ‘80s and ‘90s, reportedly earning $776,000,000 in dividends in 2024.
The company recently increased its dividends to 51 cents quarterly, which translates to a $2.04 annual rate and a 2.97% yield at the current stock prices. It also has an average analyst score of 4.86 and a 24% upside potential based on a high target price of $85.
Anheuser-Busch Inbev S.A. ADR (BUD)
Anheuser-Busch InBev, or AB InBev, is the world’s largest brewing company. It produces and distributes a vast portfolio of beer brands, including Budweiser, Corona, Stella Artois, and over 500 others across 150 countries. The company banks on strategic acquisitions, extensive distribution networks, and strong brand recognition to maintain its dominance over the alcoholic beverage industry.
While I think it’s a bit cynical for alcohol-producing companies to be considered part of consumer staples, it is what it is. Besides, there is ample evidence that BUD stock is doing well, one of which up 25.38% YTD.
So, if BUD stock fits your investment preferences, you can expect a €1 annual dividend, which is roughly US$1.08 or a 1.59% yield. Just know that AB InBev pays dividends only once a year. Finally, based on a $79 high target price, BUD has a 26% upside potential.
Walmart Inc (WMT)
Walmart is the world’s largest retailer, operating a vast network of hypermarkets, discount stores, and e-commerce platforms in multiple countries. The company serves millions of customers daily through more than 10,000 brick-and-mortar locations and a growing digital presence. Walmart leverages its massive supply chain and purchasing power to provide affordable goods, making it the destination for price-conscious consumers.
While WMT stock is down 4.84% YTD, analysts still hope it will make a comeback. The stock has a 4.73 average score and a $120 high target price, which is a nearly 40% upside potential.
Walmart is a Dividend King with 52 years of increased payouts. Its latest increase bumped up the annual rate from 83 cents to 94 cents per share, reflecting a 13% increase and a 1.09% yield based on current prices.
Final Thoughts
Consumer staples will be around as long as humans exist on this planet, so why not take advantage of the built-in demand and buy the best ones that pay dividends?
Of course, being the “best” here doesn’t necessarily mean they’ll remain the best. Things change in the consumer market. Demands wane, brands get left behind, and consumers constantly acquire new tastes. So, always research and ensure you’ve done your homework before jumping into any investment opportunities.
