12 Best Grocery Stocks to Buy

Published December 5, 2022 at 9:54 am EST Updated September 7, 2026 at 11:49 am EDT

In this article, we discuss the 12 best grocery stocks to buy.

Grocery stocks have highly defensive characteristics and remain relatively stable even during tough economic conditions.

According to a research report, the global food & grocery retail market size was valued at $11,324.4 billion in 2021 and is expected to grow at a CAGR of 3% between 2022 and 2030. According to a survey conducted in April, 95% of US customers said that they might make changes in their spending due to rising inflation. 50% of them admitted that they stocked up on essential items when they were on sale.

Despite inflation and tough market conditions, people must eat and buy essentials. This makes grocery stocks better compared to the other sectors in the stock market. Moreover, a lot of the grocery stocks pay dividends which allows investors to gain a steady stream of passive income.

Photo by Franki Chamaki on Unsplash

Our Methodology

After carefully analyzing grocery stocks listed on NYSE and NASDAQ, we compiled a list of 12 grocery stocks that would make a valuable addition to an investor portfolio. These stocks have solid financials and they are popular among the 920 elite hedge funds tracked by Insider Monkey as of the end of the third quarter.

Best Grocery Stocks to Buy

12. Weis Markets, Inc. (NYSE:WMK)

Number of Hedge Fund Holders: 14

Weis Markets, Inc. (NYSE:WMK) is an American retail grocery store with approximately 200 stores across Maryland, New York, Delaware, New Jersey, Pennsylvania, and Virginia and has over 23,000 employees. Weis Markets, Inc. stock is up 30.66% YTD as of December 2.

In October, Weis Markets, Inc. declared a 6% increase in its quarterly dividend to $0.34 per share, paid out on November 21 to the shareholders of record on November 7. The company has been increasing its dividend for the past couple of years and has a dividend yield of 1.55% as of December 2.

14 hedge funds held bullish positions in Weis Markets, Inc. in the third quarter of 2022. Renaissance Technologies remained the most significant shareholder in the company for the 11th consecutive quarter with 375,936 shares worth $26.782 million in Q3 2022.

Amazon.com, Inc. (NASDAQ:AMZN), Costco Wholesale Corporation (NASDAQ:COST), and Dollar General Corporation (NYSE:DG) are some of the best grocery stocks just like Weis Markets, Inc..

11. Ingles Markets, Incorporated (NASDAQ:IMKTA)

Number of Hedge Fund Holders: 15

Ingles Markets, Incorporated (NASDAQ:IMKTA) is a North Carolina-based supermarket chain. It is one of the best grocery stocks that operates around 200 supermarkets in the Southeastern United States. Apart from supermarkets, the company also operates shopping centers, gas stations, and a milk processing plant.

On November 24, Ingles Markets, Incorporated posted its FY2022 results. The company’s net sales were $5.68 billion compared to $4.99 billion in FY2021. Net income totaled $272.8 million, compared with $249.7 million in the previous year. Moreover, gross profit for the year was 24.9% at $1.42 billion and CAPEX was brought down to $119.6 million compared to $140.6 million in the previous year.

Ingles Markets, Incorporated is a dividend stock with a yield of 0.65% as of December 2.

As of the third quarter, 15 hedge funds had a stake in Ingles Markets, Incorporated. Royce & Associates retained the spot as the largest shareholder in the company with 726,786 shares worth $57.569 million.

10. Unilever PLC (NYSE:UL)

Number of Hedge Fund Holders: 21

Unilever PLC (NYSE:UL) is a British consumer goods company that operates globally. It is the largest soap producer in the world. The company also has R&D facilities in the US, UK, China, India, and the Netherlands.

Unilever PLC is one of the best grocery stocks because of its impressive dividend yield of 3.27%. To maximize its shareholder returns, Unilever PLC also authorized a share repurchase program of up to €3 billion to be completed in 2023.

In the third quarter of 2022, 21 hedge funds had a stake in Unilever PLC, valued at $708.08 million. Fisher Asset Management increased its holdings in the company by 21% and was the most notable shareholder in the company with close to 7 million shares worth $305.5 million.

Here is what Mayar Capital specifically said about Unilever PLC in its Q2 2022 investor letter:

“In 1895 the Lever brothers created a new brand of hand soap. Inspired by the growing demand for hygiene products, the Lifebuoy brand of soaps was launched to ‘make health infectious’. 128 years later the Lifebuoy brand continues as a leading soap brand – albeit without the coal tar-derived ingredients list. In fact, the market research firm Kantar ranked Lifebuoy as the global #3 most chosen FMCG brand in 2020, just below Coca-Cola (KO) and Colgate (CL) – an astonishing fact given the age of the brand. While the brand is largely absent from shelves here in the UK, it is a juggernaut in Asian markets, and is the #1 brand in India.

There are two observations about the Lifebuoy story which tell us a lot about Unilever PLC, which is currently our largest holding in the Fund.

The first is the enduring power of brands in the consumer goods market. According to Kantar’s list of most chosen brands, the top 20 global marques have an average age of 116 years, with over half being founded in the 19th century. Fashions come and go, but there is something special about low-cost consumable goods that advantages strong, time-worn brand names…” (Click here to view full text)

9. Grocery Outlet Holding Corp. (NASDAQ:GO)

Number of Hedge Fund Holders: 22

Grocery Outlet Holding Corp. (NASDAQ:GO) is an American discount grocery retailer with 430 stores spanning California, Oregon, Washington, Idaho, Nevada, Pennsylvania, and New Jersey. Most of the stores owned by the company are run by local married couples. The company is listed on NASDAQ since 2019. It is one of the best grocery stocks as it sells highly discounted products making it easy for consumers to rush to even during high inflation.

On November 9, Deutsche Bank analyst Krisztina Katai reaffirmed a Buy rating on Grocery Outlet Holding Corp. and lowered the price target to $41 from $43. In the last three months, 6 analysts have covered Grocery Outlet Holding Corp. with an average price target of $37.33 and a Moderate Buy rating. The average price target represents an upside of 21.79% from the current stock price of $30.65 at the time of writing.

In the third quarter, hedge funds rallied towards Grocery Outlet Holding Corp. with 22 hedge funds holding positions in the company, compared to 14 in the previous quarter. Marshall Wace LLP retained the spot as the largest stakeholder in the company for the second consecutive quarter after increasing its holdings by 52%.

Here is what Alger Capital specifically said about Grocery Outlet Holding Corp.:

“Grocery Outlet Holding Corp. is a food retailer that sells deeply discounted brand-name consumables, generally providing a 10-50% discount on a total basket of branded goods relative to traditional grocers with 40-70% savings on its “opportunistically sourced” merchandise. The company buys opportunistic consumables in the same way that off-price retailers may buy discounted apparel, which involves capitalizing on cancelled orders, changes to packaging and other strategies. Shares of Grocery Outlet outperformed in the second quarter because the company is viewed by many investors as defensive and a beneficiary of inflation and consumers “trading down.” Additionally, rampant inflation could increase the company’s value proposition and the company has the benefit of passing on higher prices to consumers, given they sell primarily non-discretionary products. Finally, the company has strong unit volume growth, which may be attractive to investors during an economic slowdown.”

8. Casey’s General Stores, Inc. (NASDAQ:CASY)

Number of Hedge Fund Holders: 24

Casey’s General Stores, Inc. owns and operates a chain of convenience stores in the United States. It operates close to 2500 stores across the US, employs over 20,000 people, and is the third largest convenience store in the United States. More than 50% of Casey’s General Stores, Inc. locations are based in rural towns with 5,000 people or less.

On December 1, Wells Fargo analyst Anthony Bonadio reaffirmed an Outperform rating on Casey’s General Stores, Inc. with a price target of $260, up from $245. Bonadio thinks that fuel profits should remain strong, although the upside to the consensus looks minimal.

In the third quarter of 2022, 24 hedge funds held Casey’s General Stores, Inc.’s stock. GLG Partners added the stock to its portfolio in the same quarter and immediately became the largest stakeholder in the company with 144,873 shares worth $29.339 million. Additionally, Renaissance Technologies increased the number of company shares by 2026% in its portfolio. The firm owned 118,872 Casey’s General Stores, Inc.’s shares, worth $24.074 million.

Here is what Upslope Capital had to say about Casey’s General Stores, Inc. in its Q1 2022 investor letter:

“Casey’s General Stores: 3rd largest independent convenience store operator in the U.S. and 5th largest pizza chain; unique footprint exclusively focused on the Midwest/South. Growing business with highly defensible model offers good value and significant optionality from organic initiatives and M&A.”

7. Dollar Tree, Inc. (NASDAQ:DLTR)

Number of Hedge Fund Holders: 37

Dollar Tree, Inc. (NASDAQ:DLTR) is an American retail store company that operates a multi-price-point chain of discount variety stores. The company has over 15,000 stores across the United States and Canada. The company’s business strategy is to attract “financially disadvantaged” customers making it one of the best grocery stocks.

On November 11, Deutsche Bank analyst Krisztina Katai reiterated a Buy rating on Dollar Tree, Inc. and raised its price target to $194 from $163. Katai said that she is “encouraged” by the company’s sales progress in the third quarter.

For Q3 2022, the company posted a GAAP EPS of $1.20 compared to the $1.17 estimates and reported an enterprise same-store sales increase of 6.5% YoY.

Here is what Madison Funds had to say about Dollar Tree, Inc. in its Q2 2022 investor letter:

“Dollar Tree, Inc. reported strong results on the heels of rolling out the $1.25 price point initiative at all Dollar Tree stores nationwide. Furthermore, they announced several executive leadership changes, undoubtedly catalyzed by new Executive Chairman Richard Dreiling. We remain encouraged by the progress to date and are excited to see what the new team can do at Dollar Tree over the coming years.”

6. The Kroger Co. (NYSE:KR)

Number of Hedge Fund Holders: 49

The Kroger Co. (NYSE:KR) is an American retail company that operates over 2700 stores across 35 states in the United States. The company also owns jewelry stores, pharmacies, and medical clinics. In October, The Kroger Co. announced the merger with Albertsons Companies, Inc. (NYSE:ACI) which is expected to close out in 2024.

On December 1, The Kroger Co. reported the best quarterly results since 2020 with a Non-GAAP EPS of $0.88, beating estimates by $0.06. The revenues were up 7.2% YoY to $34.2 billion, beating the estimates by $280 million. Due to solid Q3 results, The Kroger Co. updated its outlook with identical sales without fuel to be in the range of 5.1% to 5.3% and diluted EPS to be in the range of $4.05 to $4.15. The Kroger Co. is a dividend stock that has increased its dividend for the past 15 years. As of December 2, it has a dividend yield of 2.19% compared to the sector average of 1.89%.

5. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 52

Target Corporation (NYSE:TGT) is a Minnesota-based big box department store chain. The company has around 2000 operating locations. In the third quarter of 2022, 52 hedge funds had a stake in the company with a combined value of $2.03 billion. In the previous quarter, Target Corporation was a part of 46 investment portfolios, valued at approximately $1.3 billion.

On November 17, Telsey Advisory analyst Joseph Feldman maintained an Outperform rating on Target Corporation’s stock and lowered the price target to $175 from $185. The analyst believes that the company should bottom in the next couple of quarters. However, from Q2 2023 onwards, Target Corporation should increase its profits and sales sequentially.

Target Corporation is one of the best grocery stocks as it has increased its dividends for 50 years. Its next quarterly dividend will be paid on December 12 to the shareholders of record on November 16. As of December 2, the company has a dividend yield of 2.63%.

Here is what Carillon Tower Advisers specifically said about Target Corporation in its Q2 2022 investor letter:

“Target Corporation faced its worst day in decades after trimming its profit forecast for the year due to higher costs. While many of the cost pressures are likely to persist in the near term, the company also struggled with a shift in consumer spending, which resulted in inventory write-downs.”

4. Dollar General Corporation (NYSE:DG)

Number of Hedge Fund Holders: 59

Dollar General Corporation is a discount retailer headquartered in Goodlettsville, Tennessee. The company has over 18,000 stores across the US. It was founded in 1939 and in 2003 entered the grocery store business. Dollar General Corporation has over 160,000 employees.

Dollar General Corporation reported its Q3 2022 earnings on December 2. The company’s revenue was up 11.1% YoY to $9.46 billion, outperforming the market estimates by $70 million. However, the EPS of $2.33 lagged behind the analyst estimates of $2.55. Despite the miss, Dollar General Corporation’s EPS was up by 12% from Q3 2021.

On December 1, Dollar General Corporation declared a $0.55 quarterly dividend, payable by January 17, to the shareholders of record on January 3. Dollar General Corporation has been raising its dividend for the past six years and as of December 2, the company has a dividend yield of 0.90%. Furthermore, in the third quarter, the company repurchased shares worth $546 million with $2.5 billion worth of shares still remaining under the current repurchase program.

Here is what Aristotle Capital specifically said about Dollar General Corporation in its Q2 2022 investor letter:

“Dollar General Corporation contributed to performance in the second quarter following the report of first quarter earnings that were above expectations. Strength in the second quarter was driven by better-than-expected sales of consumable items. Guidance for the remainder of the year was increased. In addition to solid earnings, forecasts for the increasing expectations of a recession drove positive sentiment towards consumer discretionary companies with more predictable revenue like dollar stores.”

3. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 68

Walmart Inc. (NYSE:WMT) is an American chain of retail stores headquartered in Bentonville, Arkansas. The company operates hypermarkets, department stores, and grocery stores, along with Sam’s Club, a chain of membership-only retail warehouse clubs. After generating $570 billion in FY2021, Walmart Inc. was the largest company by revenue according to Fortune Global 500.

On December 1, Atlantic Equities analyst Daniela Nedialkova maintained an Outperform rating on Walmart Inc. and raised the price target to $165 from $150.

Walmart Inc. makes it to our list of best grocery stocks and is on its way to becoming a dividend king as it has been increasing its dividends for the past 49 years. As of December 2, the company has a dividend yield of 1.46% with an annualized dividend payout of $2.24.

Here is what Leaven Partners has to say about Walmart Inc. in its Q3 2022 investor letter:

“In our last quarterly letter, I briefly mentioned that the consensus estimates for corporate profits appeared to be a bit too sanguine. I referenced a Reuters article that reported, as of June 17, Wall Street expected S&P 500 earnings to grow by 9.6% in 2022, which was up from 8.8% in April and from 8.4% in January. That tune began to change at the end of July and accelerated in August and September, as major players, such as Walmart, has recently issued profit warnings and/or have withdrawn guidance. In response, Wall Street has altered its outlook: lowering third-quarter profit growth to 4.6%[2] from 7.2% in early August and slashing full-year profit growth to 4.5%.”

2. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 69

Costco Wholesale Corporation is an American chain of membership-only big-box retail stores selling groceries, electronics, computers, furniture, outdoor living, appliances, jewelry, and household essentials along with other things. The company has nearly 840 locations across 15 countries.

In 2022, Costco Wholesale Corporation reported revenue growth of 15.8% and EPS growth of 16.6%.

According to our database, Costco Wholesale Corporation was a part of 69 investment portfolios in Q3 2022, up from 64 in the previous quarter. Fisher Asset Management was the most significant shareholder in the quarter with over 2.5 million company shares worth over $1.2 billion.

On December 1, Truist analyst Scot Ciccarelli maintained a Buy rating on Costco Wholesale Corporation’s shares and trimmed the price target to $557 from $559.

Here is what ClearBridge Investments had to say about Walmart Inc. in its Q2 2021 investor letter:

“The pandemic has created challenges for businesses large and small; one major challenge for large essential retailers such as ClearBridge holdings Home Depot, Walmart, and Costco has been ensuring adequate staffing to meet demand under trying conditions. All three instituted enhanced pay practices during the pandemic, with raises, unplanned bonuses and other benefits helping compensate employees for their efforts in a difficult environment. In September 2020 Walmart raised wages for 165,000 employees, including a number of entry positions to $15 an hour. It followed this in February with a raise for 425,000 workers that moved its average pay above $15 an hour.”

1. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 269

Amazon.com, Inc.’s e-commerce platform is well-diversified and sells gourmet food, groceries, apparel, baby products, consumer electronics, and beauty products along with several other products. The company was launched 27 years ago and operates globally.

Amazon.com, Inc. experienced a lag in growth at the start of the year. Inflationary effects weren’t favorable for the e-commerce giant. However, in Q3 2022, the company’s North American segment sales were up by 20% YoY to $78.8 billion. The total revenue was $127.10 billion, representing a 14.7% YoY surge. The EPS was $0.28, compared to $0.31 in Q3 2021 but it outperformed the market estimates by $0.07.

On December 1, Cowen analyst John Blackledge maintained a Buy rating on Amazon.com, Inc.’s shares and raised the price target to $160 from $150.

Here’s what Baron Funds said about Amazon.com, Inc. in its Q3 2022 investor letter:

“Amazon.com, Inc. is the world’s largest e-commerce retailer and cloud services provider. Shares of Amazon increased 6% in the quarter after the company reported strong results with 7% year-over-year revenue growth driven by 33% growth in Amazon Web Services (AWS), Amazon’s leading cloud computing service, while guiding for an acceleration in third quarter revenue growth, which is expected to be between 13% and 17% year-overyear. Amazon’s share of e-commerce is roughly 40%, far ahead of competition, yet domestic e-commerce accounted for only 14.5% of total retail sales (according to U.S. Census Bureau data for the second quarter of 2022), implying durable growth opportunities ahead. Internationally, the opportunity remains large as Amazon still has less than a 2% market share of international retail spending. Its advertising share is also only 3% and growing, underpinned by the structural closed-loop systems it enables (merchants know exactly whether their ad dollars resulted in a purchase since they are all done on the Amazon platform), which enables accurate targeting and measurement. Lastly, AWS has a good runway for growth as the industry still represents only 9.5% out of the $4.3 trillion of global IT spending according to Gartner. Areas such as logistics and health care present additional optionality.”

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