Consumer stocks are once again commanding attention on Wall Street, fueled by resilient household spending and a wave of analyst optimism. Despite ongoing inflation and global trade uncertainties, U.S. retail sales jumped 0.6% in June, well above expectations, signaling that consumer demand remains robust. “Consumers are flexing their spending muscle,” noted Gina Bolvin of Bolvin Wealth Management in a recent commentary, underscoring the strength of the American shopper even in a higher-rate environment. This trend has prompted hedge funds to rotate aggressively into consumer staples, with Goldman Sachs reporting the fastest shift into the sector in nearly two years as investors seek out stability and pricing power.
Meanwhile, analysts are highlighting opportunities even in traditionally industrial names with strong consumer exposure. Wolfe Research’s Nigel Coe, for instance, maintained a Buy rating on 3M despite acknowledging that “consumer leverage could clip down core sales guidance.” He pointed to favorable currency effects and improved cost controls as key offsets, setting a $186 price target on the stock.
Against this backdrop, we’ve identified 10 consumer-sector stocks that combine profitability, resilience, and strategic positioning. From well-established staples to innovative discretionary brands, these companies are primed to deliver steady returns, no matter how the broader economic narrative evolves.
A customer in a store, perusing the selection of consumer electronics.
Our Methodology
To identify the most profitable consumer stocks, we focused on companies operating across consumer staples, discretionary, and electronics sectors that demonstrate strong brand equity, pricing power, and consistent demand resilience. These firms span categories such as packaged foods, personal care, retail, and household goods, industries that benefit from steady consumer spending and hold the ability to navigate inflationary pressures.
From this broader universe, we applied a financial performance screen to isolate only those stocks with a trailing twelve-month (TTM) operating margin above 20%, a key indicator of profitability and operational efficiency. High margins in the consumer space often signal strong cost control, product differentiation, and customer loyalty, qualities essential for long-term value creation.
We then narrowed the list further by factoring in hedge fund sentiments as of Q1 2025. The final list represents 10 high-quality consumer stocks that combine sector leadership, financial strength, and the potential to outperform through various economic cycles.
Note: All data was recorded on July 18, 2025.
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 Most Profitable Consumer Stocks to Buy Now
10. Yum! Brands, Inc. (NYSE:YUM)
TTM Operating Profit Margin: 33.11%
Number of Hedge Fund Holders: 49
Yum! Brands, Inc. (NASDAQ:YUM) is one of the most profitable consumer stocks to buy now. Yum! Brands (NYSE: YUM) got a lift this week after Morgan Stanley raised its price target on the stock to $153 from $151, reflecting cautious optimism around the company’s near-term outlook. The firm maintained its Equal Weight rating but pointed to improving industry conditions that could lead to a stronger Q2 for restaurant operators and food distributors.
With Yum! Brands currently trading at around $149, the new price target suggests a modest upside of approximately 2.7%. While not a dramatic revision, the move signals confidence in the company’s ability to navigate a mixed macro environment. In a note to investors, the firm highlighted stabilizing input costs and healthy spending patterns among middle- and upper-income consumers, which continue to support dining out behavior despite persistent policy uncertainty.
Morgan Stanley also noted that the broader restaurant space appears better positioned this quarter, as inflation pressures ease and discretionary spending remains intact in key consumer groups. For Yum!, that could translate into more consistent traffic and potentially stronger margins, particularly as it continues to focus on digital engagement, value menus, and international expansion.
Investors are now eyeing Yum!’s upcoming earnings report for confirmation that these trends are translating into tangible performance improvements, especially in high-margin segments like Taco Bell.
9. Ferrari N.V. (NYSE:RACE)
TTM Operating Profit Margin: 28.81%
Number of Hedge Fund Holders: 51
Ferrari N.V. (NYSE:RACE) is one of the most profitable consumer stocks to buy now. RBC Capital Markets analyst Tom Narayan raised his price target on Ferrari N.V. (NYSE:RACE) to $581.42 from $569.79 while reiterating a Buy rating on the stock, citing strong brand strength and continued demand resilience in the luxury auto segment. The revision, though modest, reflects confidence in Ferrari’s positioning as a premium automaker with pricing power and a loyal global customer base.
At the current market price of $507.70, the new target implies an upside potential of nearly 14.5%. RBC’s update comes amid growing investor interest in high-end consumer goods, particularly brands that have shown the ability to grow margins despite a complex macro backdrop. Narayan noted that Ferrari N.V. (NYSE:RACE) continues to benefit from limited supply, robust order books, and a steady shift toward hybrid and future EV models, all without sacrificing its exclusivity.
Ferrari’s recent financial performance has backed up the bullish outlook. The company has consistently delivered solid earnings, supported by strong ASPs (average selling prices) and disciplined cost management. Expansion plans, including a new plant in Maranello focused on electric vehicles, are seen as long-term growth drivers.
With shares already up sharply over the past year, investors are now looking to upcoming quarterly results for evidence that Ferrari can maintain its momentum and justify its premium valuation as it races toward an increasingly electrified future.
8. Monster Beverage Corporation (NASDAQ:MNST)
TTM Operating Profit Margin: 28.03%
Number of Hedge Fund Holders: 54
Monster Beverage Corporation (NASDAQ:MNST) is one of the most profitable consumer stocks to buy now. UBS raised its price target on Monster Beverage Corporation. (NASDAQ:MNST) to $64 from $63 on July 17, maintaining a Neutral rating as the firm continues to take a measured view of the energy drink giant’s near-term prospects. The modest adjustment reflects incremental optimism around the company’s distribution gains and innovation pipeline, but also suggests limited room for outperformance at current levels.
Monster, which has faced intensified competition from new entrants and legacy beverage rivals alike, has been leaning on international expansion and product extensions to maintain momentum. UBS analysts noted that while those initiatives are showing progress, the overall U.S. market has grown more crowded, putting pressure on shelf space and pricing.
The company’s recent launch of alcoholic offerings under The Beast Unleashed brand has drawn interest, but UBS appears to be waiting for more evidence of meaningful revenue contribution before revising its broader outlook. Monster shares have traded in a relatively tight range over the past quarter, as investors weigh category growth against margin pressures from higher input costs.
With the stock hovering below 8.5% of the new target, the neutral call underscores a wait-and-see approach from UBS as the company navigates a shifting competitive landscape.
7. Royal Caribbean Cruises Ltd. (NYSE:RCL)
TTM Operating Profit Margin: 25.76%
Number of Hedge Fund Holders: 57
Royal Caribbean Cruises Ltd. (NYSE:RCL) is one of the most profitable consumer stocks to buy now. Royal Caribbean (NYSE:RCL) received a significant vote of confidence from Wolfe Research, which raised its price target on the stock to $394 from $272 while reiterating its Outperform rating. The revised target represents a potential upside of nearly 13% from the current trading level of around $350.
The move follows strong industry data pointing to robust cruise demand and pricing trends holding firm through the second half of the year. Wolfe analysts cited improved onboard spending, healthy booking curves, and continued strength in premium cabin sales as key reasons for their bullish stance.
Royal Caribbean has been among the top performers in the travel sector this year, fueled by a surge in international travel and a shift in consumer discretionary spending toward experiences over goods. Wolfe’s update suggests that the stock still has room to run, especially as capacity returns to pre-pandemic levels and new ship deliveries drive earnings growth.
With forward guidance already raised in previous quarters, the focus now shifts to whether Royal Caribbean can sustain momentum through 2025 amid macro uncertainty and rising costs. For now, analysts appear confident the cruise line remains on a favorable course.
6. Colgate-Palmolive Company (NYSE:CL)
TTM Operating Profit Margin: 21.35%
Number of Hedge Fund Holders: 65
Colgate-Palmolive Company (NYSE:CL) is one of the most profitable consumer stocks to buy now. UBS lowered its price target on Colgate-Palmolive (NYSE: CL) to $106 from $109 while maintaining a Buy rating, citing valuation discipline following the stock’s steady run in recent months. At the current price of $86.80, the revised target still implies an upside potential of roughly 22%.
The firm continues to see strength in Colgate’s underlying fundamentals, particularly its strong pricing execution across global markets and steady demand for essential personal care and household products. UBS analysts noted that while foreign exchange and cost headwinds remain part of the equation, margin recovery efforts and disciplined brand investments are likely to support earnings growth through the back half of the year.
Colgate has seen consistent performance across its oral care and pet nutrition segments, with emerging markets showing signs of improving volumes. The updated target reflects a more balanced outlook as shares approach levels UBS considers closer to fair value, rather than a change in conviction about the company’s prospects.
Investors will be watching Colgate’s next earnings update for clarity on input cost trends and competitive dynamics, particularly as pricing begins to normalize and volume growth comes back into focus.
5. McDonald’s Corporation (NYSE:MCD)
TTM Operating Profit Margin: 45.86%
Number of Hedge Fund Holders: 75
McDonald’s Corporation (NYSE:MCD) is one of the most profitable consumer stocks to buy now. Bank of America slightly lowered its price target on McDonald’s Corporation (NYSE:MCD) to $322 from $327 while keeping a Neutral rating, as it fine-tunes estimates across its restaurant coverage ahead of the sector’s upcoming earnings season. The revised target implies an upside of roughly 8.4% from the current market price of $297.
The move reflects a broader recalibration by BofA analysts, who are adjusting their models to account for changes in market multiples and company-specific revisions. While McDonald’s remains a stable performer, the firm signaled that valuation has grown less compelling in the short term, especially amid a backdrop of slowing same-store sales growth and cautious consumer trends in key international markets.
BofA highlighted that while McDonald’s continues to benefit from scale, operational efficiency, and strong brand equity, macro pressures, including FX headwinds and uneven traffic in Europe, could limit near-term upside. Still, the modest price cut is not a sign of deteriorating fundamentals but rather part of a broader sector-level housekeeping.
Investors will be closely monitoring McDonald’s quarterly update for guidance on pricing strategies, traffic trends, and progress in digital engagement, all of which will shape sentiment heading into the second half of the year.
4. The Procter & Gamble Company (NYSE:PG)
TTM Operating Profit Margin: 25.38%
Number of Hedge Fund Holders: 88
The Procter & Gamble Company (NYSE:PG) is one of the most profitable consumer stocks to buy now. UBS analyst Peter Grom lowered his price target on The Procter & Gamble Company (NYSE:PG) to $180 from $186 while maintaining a Buy rating, citing refined estimates ahead of the company’s fiscal fourth-quarter results. Despite the downward adjustment, the revised target still implies an upside of about 16% from the current price of $155.
The move reflects a more tempered near-term view rather than a shift in long-term confidence. UBS continues to see strength in P&G’s brand portfolio, which spans core categories like fabric care, grooming, and personal health. Grom noted that while foreign exchange pressures and consumer trade-down behavior are worth watching, the company’s pricing power and cost discipline remain key pillars of its strategy.
P&G has held up well in a mixed consumer environment, benefiting from its exposure to everyday essentials and global scale. The company’s ability to maintain share across several categories, even amid softer volumes, has kept investor sentiment generally positive.
As earnings season approaches, analysts will be looking for commentary on volume recovery and input costs, particularly as inflation eases in certain regions. The new target reflects modest caution without undermining the firm’s broader bullish stance on P&G’s market positioning.
3. Booking Holdings Inc. (NASDAQ:BKNG)
TTM Operating Profit Margin: 32.77%
Number of Hedge Fund Holders: 102
Booking Holding Inc. (NASDAQ:BKNG) is one of the most profitable consumer stocks to buy now. HSBC boosted its price target on Booking Holdings Inc. (NASDAQ:BKNG) to $7,069 from $6,120, reaffirming a Buy rating as the firm grows more confident in the travel giant’s ability to capitalize on sustained global demand. The new target implies an upside of about 24% from the current share price of $5,703.90.
The revision comes as Booking continues to benefit from strong international travel trends, particularly in Europe and Asia, where booking volumes and average daily rates have held firm. HSBC noted that the company’s mix of direct traffic, mobile penetration, and loyalty adoption positions it well to protect margins and drive repeat business.
Analysts also pointed to improving air travel trends and solid summer booking curves as supporting factors heading into the back half of the year. While currency fluctuations and geopolitical uncertainties remain background risks, Booking’s scale and diversified platform have helped it weather volatility better than many peers.
Investors will be looking closely at Booking’s upcoming results for updates on traveler behavior, cancellation trends, and regional performance. HSBC’s revised target suggests continued faith in the company’s execution as it navigates a complex but growing global travel landscape.
2. Philip Morris International (NYSE:PM)
TTM Operating Profit Margin: 37.36%
Number of Hedge Fund Holders: 104
Philip Morris International (NYSE:PM) is one of the most profitable consumer stocks to buy now. Goldman Sachs raised its price target on Philip Morris International (NYSE:PM) to $200 from $190 on July 17, maintaining a Buy rating and signaling confidence in the tobacco giant’s earnings trajectory. The new target implies an upside of nearly 12% from the current share price of $178.70.
The upward revision comes ahead of the company’s next earnings release, with Goldman pointing to improved operational visibility and strong execution in key international markets. Analysts highlighted the company’s ability to navigate shifting regulatory environments while preserving margins through disciplined cost controls and a balanced pricing strategy.
Philip Morris has also continued to expand its presence in non-combustible products, though Goldman’s update did not place sole emphasis on this segment. Instead, the note referenced broad-based strength in the company’s global footprint, where consistent performance in both developed and emerging markets has helped support top-line growth.
Investors will be watching closely for commentary on shipment volumes, inventory trends, and guidance updates. With shares hovering near their recent highs, Goldman’s call suggests confidence that Philip Morris still has room to move higher as it balances legacy operations with ongoing product innovation.
1. Apple Inc. (NASDAQ:AAPL)
TTM Operating Profit Margin: 31.81%
Number of Hedge Fund Holders: 159
Apple Inc. (NASDAQ:AAPL) is one of the most profitable consumer stocks to buy now. Apple significantly ramped up iPhone production in the first half of 2025, with output rising 53% year-over-year to 23.9 million units in India, according to new data from Canalys. The surge marks a strategic push ahead of the iPhone 17 launch and reflects growing reliance on India both as a manufacturing hub and an increasingly important end market.
India now contributes approximately 16% to 17% of Apple’s global iPhone production, up from minimal levels just a few years ago, with projections suggesting it could hit 25% by 2027. The company has also been assembling high-end models like the iPhone 16 Pro in the country, underscoring a shift in its global production strategy. On the demand side, Apple has broken into the top five smartphone brands in India, with iPhone revenues up 28% year-over-year in Q1 2025, driven by rising premium adoption and financing offers.
However, the production boom comes at a time when growth in Apple’s core markets is softening. U.S. sales have been weighed down by lengthening replacement cycles and cautious consumer spending, while iPhone volumes in China have shown signs of decline. Despite these headwinds, Apple’s overall unit shipments rose 13% in Q1, outpacing the broader smartphone market.
As the company heads into earnings season, investors will be watching closely to see if this production momentum translates into real demand, especially in regions where Apple has recently lost ground.
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