In this article, we will take a look at the most profitable consumer defensive stocks to buy now.
No matter what the economy looks like, some things never go out of demand. It gets interesting when these everyday household names are among the most profitable opportunities in the market.
Consumer defensive stocks are famous for being sustainable, reliable, and less vulnerable to economic shocks. Such stocks typically belong to companies that provide everyday essentials, from eggs and drinks to personal care products, you name it.
As stated by Nic Sochovsky in a publication titled “The Case for Consumer Staples,”
“Despite an exceptionally turbulent four years, the consumer staples sector has demonstrated resilience, justifying a place in our portfolios.”
Research has long advocated for investing in consumer defensive stocks due to the nature of their businesses and predictable cash flows. As highlighted in a report by Guinness Global Investors, these stocks outperformed the MSCI World Index in all but one instance, surpassing the market average by a meaningful 5.9%. Given this, we will take a look at some of the best consumer defensive stocks to invest in.
Our methodology:
We have compiled a list of the most profitable consumer defensive stocks to buy now. In doing so, we used Finviz stock screener to filter for consumer defensive stocks with an EPS growth of over 15% in the last 3 years and an ROE of at least 5%. The stocks are ranked in ascending order according to the number of hedge fund holdings in them, as data extracted from Insider Monkey’s Q2 2025 database.
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).
10. LifeVantage Corporation (NASDAQ:LFVN)
Number of Hedge Fund holdings: 10
On Thursday, LifeVantage Corporation (NASDAQ:LFVN) announced the completion of its acquisition of LoveBiome, a direct sales company specializing in microbiome care and wellness solutions. The transaction encompasses LoveBiome’s core operating assets related to its microbiome health segment, as well as the retention of key personnel.
By integrating LoveBiome’s P84 product with the company’s top-tier technologies and compensation structure, this takeover enables LifeVantage Corporation (NASDAQ:LFVN) to expand its offerings into the gut health market while solidifying its presence in the United States, Taiwan, and Europe markets.
While LifeVantage Corporation (NASDAQ:LFVN) disappointed with the recent quarter’s results, the company has now positioned itself as a leader in the emerging microbiome health sector through the acquisition. As expressed by Steve Fife, President and CEO of LifeVantage Corporation (NASDAQ:LFVN),
“We are pleased to have closed the LoveBiome acquisition and look forward to working with Kelly Olsen and the LoveBiome team.”
LifeVantage Corporation (NASDAQ:LFVN), headquartered in Lehi, Utah, is a company that provides advanced nutrigenomic activators, dietary supplements, and skin and hair care products, among other products. With a commitment to transforming people’s lives, the company’s core offerings include Protandim, LifeVantage Omega+, and LifeVantage Daily Wellness.
9. Lifeway Foods, Inc. (NASDAQ:LWAY)
Number of Hedge Fund holdings: 12
On Wednesday, Lifeway Foods, Inc. (NASDAQ:LWAY) announced the resignation of Jody Levy from its board of directors, effective immediately. According to a statement in the SEC filing, Levy didn’t resign because of any disagreement with the company’s operations, rules, or policies.
A few days ago, Lifeway Foods, Inc. (NASDAQ:LWAY) signed a multi-faceted agreement with Danone, a French food company. Under the terms, Lifeway will appoint four new directors and split the roles of chair and CEO, currently held by Ms. Smolyansky. Not only that, but both companies have also mutually agreed to pause the litigation between them.
It goes without saying that this collaboration will ease the tensions between the two, as Lifeway Foods, Inc. (NASDAQ:LWAY) will now comply with the shareholder agreement. As stated by Ms. Smolyansky,
This agreement allows us to move forward with clarity and stability, while continuing to focus on what matters most: bringing probiotic-rich foods to more families and creating value for our shareholders.
Lifeway Foods, Inc. (NASDAQ:LWAY) is an Illinois-based producer and marketer of probiotic-based products. Incorporated in 1986, the company offers drinkable kefir, European-style soft cheeses, cream, and other products, and drinkable yogurt, among others.
8. Vital Farms, Inc. (NASDAQ:VITL)
Number of Hedge Fund holdings: 23
According to a recent disclosure with the SEC, Park Avenue Securities LLC acquired a new stake in Vital Farms, Inc. (NASDAQ:VITL). During the second quarter, the investment advisor bought 8,006 shares of the company’s stock worth approximately $308,000.
With customers leaning towards healthier food choices, Vital Farms, Inc. (NASDAQ:VITL) benefits from the rising demand for organic, ethical, and sustainable food. What makes this story even powerful is that customers are willing to pay premium prices for knowing what they are eating and how it’s processed. This not only drives revenue for the company but also strengthens its brand loyalty.
The business model of Vital Farms, Inc. (NASDAQ:VITL) definitely makes it more appealing than its competitors. Rather than owning and operating facilities, the company collaborates with over 500 small family farms to supply its eggs and other products.
Vital Farms, Inc. (NASDAQ:VITL) is a Texas-based food company engaging in the packaging, marketing, and distribution of shell eggs, butter, and other items. Founded in 2007, the company is committed to delivering ethically produced food.
7. The Vita Coco Company, Inc. (NASDAQ:COCO)
Number of Hedge Fund holdings: 29
Chris Carey, an analyst at Wells Fargo, reiterated his ‘Overweight’ rating on The Vita Coco Company, Inc. (NASDAQ:COCO) while raising the price target to $47 from $45, which reflects a potential upside of nearly 10% from the current price level. This 4.44% revision follows a series of positive evaluations for the company, with financials hinting at a positive outlook.
Among the many markets rising, the demand for coconut water remains high. The Vita Coco Company, Inc. (NASDAQ:COCO) delivered strong sales growth, particularly in its core coconut water business. What’s truly impressive is that the company maintains its leadership across the main markets while it successfully expands in Europe.
Given this robust performance, management raised its FY25 net sales guidance to lie between $565–$580 million, indicating low-teens full-year growth. As stated by Corey Baker, the CFO of The Vita Coco Company, Inc. (NASDAQ:COCO),
We expect strong Q3 net sales performance as we lap the inventory shortages of last year with a tougher Q4 net sales comparable due to the benefit of distributor and retail inventory replenishment.
The Vita Coco Company, Inc. (NASDAQ:COCO) is a New York-based provider of coconut water products under the Vita Coco brand name. Founded in 2004, the company offers packaged water, PWR LIFT, coconut oil, coconut juice, and coconut milk.
6. Universal Technical Institute, Inc. (NYSE:UTI)
Number of Hedge Fund holdings: 30
Alexander Paris, an analyst at Barrington Research, reiterated his ‘Outperform’ rating on Universal Technical Institute, Inc. (NYSE:UTI) with a price target of $36, implying a potential surge of nearly 15%. Impressed by the company’s ongoing market strategies and operations, the analyst is confident about its positive outlook.
Amid the favorable regulatory environment, Universal Technical Institute, Inc. (NYSE:UTI) performed quite well in the latest quarter. As stated by the CEO, Jerome Grant,
We are successfully engaging with the Department of Education and other Trump administration offices to explore new avenues for advancing skilled trade growth.
One of the key reasons to believe in Universal Technical Institute, Inc. (NYSE:UTI) is its collaboration with the Department of Education. Management believes the agreement will play a pivotal role in accelerating plans by a year, resulting in an increase in the number of programs offered to the market during 2026.
Universal Technical Institute, Inc. (NYSE:UTI) is an Arizona-based provider of transportation, skilled trades, and healthcare education programs. With two main segments: UTI and Concorde, the company is dedicated to changing the world one life at a time.
5. Stride, Inc. (NYSE:LRN)
Number of Hedge Fund holdings: 41
During the second quarter, Mountain Pacific Investment Advisers LLC purchased a new stake in Stride, Inc. (NYSE:LRN) following the acquisition of 37,256 shares of the company’s stock. According to a recent disclosure with the SEC, the adviser firm now owns 0.09% of the company, reflecting an investment of approximately $5,409,000.
We all know COVID changed a lot, but what no one expected was how it would structurally transform the education system. With that being said, educational institutions are utilizing the cutting-edge technology offered by Stride, Inc. (NYSE:LRN). For the company, this translates to recurring revenue, strong pricing power, and sustainable market expansion in the years ahead, supported by gross margins of over 80%.
From the company’s K-12 virtual schools to its Career Learning division, Stride, Inc. (NYSE:LRN) is ensuring that it remains relevant in the market post-COVID normalization. To say the least, the company is becoming the infrastructure foundation for educational institutions pursuing modernized delivery capabilities.
Stride, Inc. (NYSE:LRN), incorporated in 1999, is a Virginia-based provider of online curriculum, software systems, and educational services. The core offerings of the company include integrated packages of systems, learning software, and support services, and individual online courses and supplemental educational products.
4. Performance Food Group Company (NYSE:PFGC)
Number of Hedge Fund holdings: 47
Moody Lynn & Lieberson LLC acquired a new stake in Performance Food Group Company (NYSE:PFGC) during the second quarter. Following the purchase of 15,892 shares of the company’s stock, the firm’s investment now amounts to approximately $1,390,000.
Just recently, Performance Food Group Company (NYSE:PFGC) announced that it has signed a cooperation agreement with Sachem Head Capital Management LP, an activist investor. Under the terms, Sachem Head Scott Ferguson has been appointed as a director, bringing the board to thirteen directors, who will serve on the company’s Audit and Finance Committee. All key M&A transactions and other strategic alternatives are assessed in this division, rendering this appointment highly important.
As cited by the CEO of Performance Food Group Company (NYSE:PFGC), George Holm,
This outcome is the result of constructive engagement with Scott and his team and demonstrates our board’s openness to fresh perspectives.
Performance Food Group Company (NYSE:PFGC) is a Virginia-based company that markets and distributes food and food-related products in North America. With three main segments: Foodservice, Convenience, and Specialty, the company is committed to being the innovative leader in providing customer satisfaction.
3. Celsius Holdings, Inc. (NASDAQ:CELH)
Number of Hedge Fund holdings: 52
According to a recent report by Marketbeat, Celsius Holdings, Inc. (NASDAQ:CELH) has earned a consensus recommendation of “Moderate Buy” from the twenty-two ratings firms, with one firm issuing a sell rating, three maintaining a hold stance, and eighteen advising to buy the stock.
As it prepares to win the race, Celsius Holdings, Inc. (NASDAQ:CELH) leverages its Alani Nu acquisition and deepened ties with Pepsi in a $585 million deal for heightened growth. Some of the factors that enable the company to achieve its goals include health-conscious consumer trends, surging demand for energy drinks, and advanced distribution networks.
Celsius Holdings, Inc. (NASDAQ:CELH), one of the leading energy drink manufacturers, is well-positioned among individuals who tend to prefer more plant-based ingredients and avoid sugary drinks. We can only expect this market to expand given the shift towards healthier choices. According to forecasts by a market research firm, the global energy drink market is expected to deliver a compound annual growth rate of 7.7%, increasing from $88.9 billion in 2023 to $186.7 billion by 2033.
Celsius Holdings, Inc. (NASDAQ:CELH) is a Florida-based provider of functional energy drinks. Founded in 2004, the company offers CELSIUS, CELSIUS Originals and Vibe, CELSIUS ESSENTIALS, CELSIUS On-the-Go Powder, and CELSIUS Hydration, along with other CELSIUS ready-to-drink products.
2. Sprouts Farmers Market, Inc. (NASDAQ:SFM)
Number of Hedge Fund holdings: 54
During the second quarter, Public Employees Retirement System of Ohio lifted its holdings in Sprouts Farmers Market, Inc. (NASDAQ:SFM) by 2,469.1%. Following the purchase of 57,160 shares, the pension fund now owns 59,475 shares of the company’s stock, reflecting an investment of $9,792,000 and ownership of about 0.06%.
With the overall market environment out of sync, everyone’s looking for companies that have delivered strong results. One such company is Sprouts Farmers Market, Inc. (NASDAQ:SFM). In just five years, the large-cap company returned an impressive 401.50%, surpassing the market average by a factor of four.
From the expansion of store brands to comps growth showing a macro-resilient clientele, Sprouts Farmers Market, Inc. (NASDAQ:SFM) has positioned itself differently from its peers. As the company plans to release more than 350 items in 2025 alone, it aims to reduce average store sizes for its new builds to slash operating expenses.
Sprouts Farmers Market, Inc. (NASDAQ:SFM) is an Arizona-based company that retails natural and organic food products in the United States. Founded in 1943, the company offers both perishable and non-perishable product categories.
1. US Foods Holding Corp. (NYSE:USFD)
Number of Hedge Fund holdings: 58
In the second quarter, Lecap Asset Management Ltd. bought a new position in US Foods Holding Corp. (NYSE:USFD) through the acquisition of 15,512 shares of the company’s stock. According to a recent disclosure with the SEC, the firm’s investment in the company now amounts to approximately $1,195,000.
Investors are hooked as US Foods Holding Corp. (NYSE:USFD) shows signs of reaching an inflection point. From the considerable acceleration in independent case volume to the prospects of a potential collaboration with Performance Food Group, everything points to the company’s bright future.
What’s even more interesting is that the company’s margin story is looking even stronger, with strategic levers translating into margin growth. While vendor management has been advancing quite well, the Pronto small-truck delivery will ensure margins keep climbing higher. The competition, too, looks modest in the long haul, positioning US Foods Holding Corp. (NYSE:USFD) as best-in-class.
US Foods Holding Corp. (NYSE:USFD) is an Illinois-based company that deals in fresh, frozen, and dry food and non-food products for foodservice customers. Incorporated in 2007, the company has a mission to help customers make it.
While we acknowledge the potential of USFD to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than USFD and that has 100x upside potential, check out our report about this cheapest AI stock.
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