Retirement Stock Portfolio: 11 Safe Consumer Stocks to Consider

In this article, we discuss the 11 safe consumer stocks for a retirement stock portfolio.

Consumer stocks are generally considered one of the safest investments at the stock market because of their predictable business models and relatively lower price volatility as compared to other sectors of the economy. Some examples of consumer industries include food and beverage producers, household item manufacturers, personal care product manufacturers, and tobacco companies. The consumer industry is also highly consolidated in nature, a key driver of demand for the sector in a volatile macro environment. 

Some of the top firms in this space are The Procter & Gamble Company (NYSE: PG), PepsiCo, Inc. (NASDAQ:PEP), and Costco Wholesale Corporation (NASDAQ:COST). In the past few months, even as inflation impacts the short-term spending trends, there is a belief among experts that this sentiment might weigh on manufacturing stocks longer than expected. However, the long-term growth indicators for the industry remain overwhelmingly positive, making the sector a top retirement stock portfolio pick.

Our Methodology

The companies that operate in the consumer sector and have established business models that have demonstrated historical resilience against inflationary headwinds were selected for the list. In order to provide readers with some context for their investment choices, the business fundamentals and analyst ratings for the stocks are also discussed. Data from around 900 elite hedge funds tracked by Insider Monkey in the third quarter of 2022 was used to identify the number of hedge funds that hold stakes in each firm.

Retirement Stock Portfolio: Safe Consumer Stocks to Consider

11. Tyson Foods, Inc. (NYSE:TSN)

Number of Hedge Fund Holders: 35  

Tyson Foods, Inc. (NYSE:TSN) operates as a food company worldwide. It is one of the best safe consumer stocks for a retirement stock portfolio. It operates through four segments: Beef, Pork, Chicken, and Prepared Foods. On October 5, Tyson Foods noted that it is bringing all corporate teams to its headquarters in Springdale, Arkansas. On November 3, Tyson Foods announced a partnership agreement with Tanmiah Food Co., producer and supplier of poultry and other meat products, to invest in the poultry capacity of Supreme Foods Processing Co.

The firm has paid a dividend to shareholders for more than three decades. In the past ten years, this payout has registered consistent growth. 

On October 27, Piper Sandler analyst Michael Lavery maintained a Neutral rating on Tyson Foods, Inc. stock and lowered the price target to $68 from $79, noting that the consumer demand in an inflationary environment remains at risk and falling prices will affect the firm’s chicken and beef segments.

At the end of the third quarter of 2022, 35 hedge funds in the database of Insider Monkey held stakes worth $1.1 billion in Tyson Foods, Inc., compared to 37 in the preceding quarter worth $1.2 billion. 

Just like The Procter & Gamble Company, PepsiCo, Inc., and Costco Wholesale Corporation, Tyson Foods, Inc. is one of the safe consumer stocks for a retirement stock portfolio. 

10. Target Corporation (NYSE:TGT)

Number of Hedge Fund Holders: 52  

Target Corporation (NYSE:TGT) operates as a general merchandise retailer in the United States. It is one of the top safe consumer stocks for a retirement stock portfolio. On October 26, Target Corporation revealed an expanded collaboration with Apple which includes a threefold increase in Apple at Target locations. The company said that it is offering the members of its loyalty program access to a four-month free trial of Apple Fitness+ with no purchase required. Target Corp has a dividend history stretching back more than fifty years. 

On August 18, Truist analyst Scot Ciccarelli maintained a Hold rating on Target Corporation stock and raised the price target to $165 from $150, noting that the company’s second quarter sales were in-line, but its earnings were still below the twice-revised forecast amid heavily marked down inventory clearing activity.  

At the end of the third quarter of 2022, 52 hedge funds in the database of Insider Monkey held stakes worth $2 billion in Target Corporation, compared to 46 in the preceding quarter worth $1.3 billion. 

In its Q2 2022 investor letter, Management, an asset management firm, highlighted a few stocks and Target Corporation was one of them. Here is what the fund said:

“The Target Corporation operates retail stores that sell a variety of merchandise ranging from necessities such as food and hygiene products to discretionary products like children’s toys and electronics. The sale of this merchandise is done primarily through physical retail locations in all 50 US states. However, Target also sells its merchandise digitally through its online website which delivers merchandise to its customers in three ways: order pickup, drive up, and “Shipt”. The Target Corporation operates a single segment through 1,926 physical stores.

Target is one of the largest US brick-and-mortar retailers and has successfully adapted to the competitive environment in the age of Amazon. As of 7/15/2022, TGT shares are down 36% for the year and down 44% since their all-time high last year. The business is experiencing issues that are temporary in nature and we believe that the shares present an attractive opportunity at current prices. Target performed exceptionally well during the Covid-19 pandemic and its aftermath. Unfortunately, the company was recently caught flat-footed, as consumer preferences shifted towards more spending on services (such as travel), at the expense of physical goods. As a result, the company found itself with an excess of inventory which will likely pressure margins in the next few quarters (…read more)

9. The TJX Companies, Inc. (NYSE:TJX)

Number of Hedge Fund Holders: 55      

The TJX Companies, Inc. (NYSE:TJX) operates as an off-price apparel and home fashion retailer. It is one of the elite safe consumer stocks for a retirement stock portfolio. On October 26, TJX Companies confirmed to News Center 5 that it is no longer selling the merchandise of rapper and fashion designer, formerly known as Kanye West, because of antisemitic comments. The firm is slowly trying to build a dividend profile.

On October 25, Morgan Stanley analyst Kimberly Greenberger maintained an Overweight rating on The TJX Companies, Inc. stock and raised the price target to $80 from $77, noting that the off-price retailers’ operating margins are below pre-Covid levels because of the volatile retail operating environment. 

Among the hedge funds being tracked by Insider Monkey, Chicago-based investment firm BlueSpruce Investments is a leading shareholder in The TJX Companies, Inc. with 5.4 million shares worth more than $332.3 million.  

In its Q4 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The TJX Companies, Inc. was one of them. Here is what the fund said:

“The pandemic created opportunities for us to be more aggressive in a variety of areas of the market. We were opportunistic throughout the year, for example, in positioning the portfolio to benefit from a flush consumer eager to return to spending and traveling. New positions included The TJX Companies, Inc., an off-brand retailer with a large presence in the U.S. and Europe that should continue to benefit from the contraction of many traditional retailers, particularly as consumer spending resumes.”

8. The Coca-Cola Company (NYSE:KO)

Number of Hedge Fund Holders: 59  

The Coca-Cola Company (NYSE:KO) is a beverage company that manufactures, markets, and sells various non-alcoholic beverages worldwide. It is one of the premier safe consumer stocks for a retirement stock portfolio. On November 7, Coca-Cola India declared a partnership with Xepto, a grocery delivery service, for a return and recycle initiative for PET bottles. The companies seek to establish an organized process of collection for PET bottles with 100 per cent traceability.  Coca-Cola is one of the most famous dividend stocks on the US market with a nearly six-decade old payout history. 

On October 26, UBS analyst Peter Grom maintained a Buy rating on The Coca-Cola Company stock and raised the price target to $68 from $63, noting that the company’s third quarter beat expectations.   

At the end of the third quarter of 2022, 59 hedge funds in the database of Insider Monkey held stakes worth $25 billion in The Coca-Cola Company, compared to 60 in the preceding quarter worth $28.4 billion. 

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The Coca-Cola Company was one of them. Here is what the fund said:

“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (The Coca-Cola Company). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”

7. Lowe’s Companies, Inc. (NYSE:LOW)

Number of Hedge Fund Holders: 61  

Lowe’s Companies, Inc. (NYSE:LOW) operates as a home improvement retailer in the United States and internationally. It is one of the prominent safe consumer stocks for a retirement stock portfolio. On September 8, Lowe’s revealed that it has partnered up with Instacart, a grocery delivery and pick-up service provider, for same-day delivery from more than 1,700 Lowe’s stores nationwide. Lowe’s is one of the most reliable stocks on the market in terms of dividend payouts. It has consistently paid a dividend to shareholders for the past fifty-nine years. 

On October 31, investment advisory Citi maintained a Neutral rating on Lowe’s Companies, Inc. stock and lowered the price target to $215 from $217. Analyst Steven Zaccone issued the ratings update. 

Among the hedge funds being tracked by Insider Monkey, New York-based investment firm Pershing Square is a leading shareholder in Lowe’s Companies, Inc. with 10.4 million shares worth more than $1.95 billion. 

In its Q4 2021 investor letter, Pershing Square Capital Management, an asset management firm, highlighted a few stocks and Lowe’s Companies, Inc. was one of them. Here is what the fund said:

“Lowe’s Companies, Inc. is a high-quality business with significant long-term earnings growth potential

Supportive macroeconomic backdrop

• Aging housing stock, lack of new inventory, robust home equity values, and unprecedented pro-project backlog
• COVID-19 causing millennials to enter the housing market

Positioned to grow EPS largely independent of market conditions

• Idiosyncratic revenue opportunities driving share gains 

• Self-help initiatives catalyzing operating margin expansion

• Buybacks representing ~8% of current market capitalization planned for 2022 (…read more)

6. Walmart Inc. (NYSE:WMT)

Number of Hedge Fund Holders: 68   

Walmart Inc. (NYSE:WMT) engages in the operation of retail, wholesale, and other units worldwide. It is one of the major safe consumer stocks for a retirement stock portfolio. On November 3, Walmart said it is helping customers to set the table for this holiday season with this year’s Thanksgiving meal at last year’s price in a time of inflation. On November 7, Walmart said that it is selling replicas of LeMarchand’s Lament configuration, the hellraiser puzzle cube, as a STEM toy. Walmart has an impressive revenue and dividend profile. 

On October 18, Jefferies analyst Corey Tarlowe kept a Buy rating on Walmart Inc. stock and raised the price target to $165 from $161, noting that the company is the value leader in retail and well positioned in the present environment. 

Among the hedge funds being tracked by Insider Monkey, Camas, Washington-based investment firm Fisher Asset Management is a leading shareholder in Walmart Inc. with 8.1 million shares worth more than $1 billion. 

In addition to The Procter & Gamble Company, PepsiCo, Inc., and Costco Wholesale Corporation, Walmart Inc. is one of the safe consumer stocks for a retirement stock portfolio. 

In its Q2 2021 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Walmart Inc. was one of them. Here is what the fund said:

“The pandemic has created challenges for businesses large and small; one major challenge for large essential retailers such as ClearBridge holdings Home Depot, Walmart Inc. 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 several 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.”

5. Costco Wholesale Corporation (NASDAQ:COST)

Number of Hedge Fund Holders: 69

Costco Wholesale Corporation engages in the operation of membership warehouses. It is one of the best safe consumer stocks for a retirement stock portfolio. On November 2, Costco Wholesale announced the sales for the month of October 2022. The company said that its comparable sales in October grew 6 per cent, while e-commerce comparable sales were down 0.7 per cent, with net sales of $17.73 billion for the fiscal year 2022 ending in October with an increase of 7.7 per cent. Costco has consistently paid a dividend to shareholders for the past two decades. 

On September 23, Truist analyst Scot Ciccarelli maintained a Buy rating on Costco Wholesale Corporation stock and lowered the price target to $559 from $571, noting that the company’s core retail operations are becoming more profitable.

Among the hedge funds being tracked by Insider Monkey, Washington-based Fisher Asset Management is a leading shareholder in Costco Wholesale Corporation with 2.6 million shares worth more than $1.2 billion. 

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Costco Wholesale Corporation was one of them. Here is what the fund said:

“Portfolio gains were led by a diverse group of contributors. Also in consumer discretionary, Costco Wholesale Corporation, which operates a chain of membership-only big-box retail stores, continues to impress as it takes to share and becomes more relevant for the consumer even as the world opens up.”

4. The Procter and Gamble Company (NYSE:PG)

Number of Hedge Fund Holders: 69  

The Procter and Gamble Company provides branded consumer packaged goods worldwide. It is one of the top safe consumer stocks for a retirement stock portfolio. On October 19, Procter & Gamble posted earnings for the first quarter of 2022, reporting earnings per share of $1.57, beating market estimates by $0.02. The revenue over the period was $20.61 billion, up 1.3% compared to the revenue over the same period last year and missing market estimates by $240 million. The firm is one of the most reliable dividend players on the market with a history stretching back over six decades. 

On October 20, Barclays analyst Lauren Lieberman maintained an Overweight rating on The Procter & Gamble Company stock and raised the price target to $145 from $139, noting that the company’s fiscal first quarter results came in much better than feared.

At the end of the third quarter of 2022, 69 hedge funds in the database of Insider Monkey held stakes worth $4 billion in The Procter and Gamble Company, compared to 71 in the preceding quarter worth $5.5 billion. 

3. PepsiCo, Inc. (NASDAQ:PEP)

Number of Hedge Fund Holders: 72     

PepsiCo, Inc. manufactures, markets, distributes, and sells various beverages and convenient foods worldwide. It is one of the premier safe consumer stocks for a retirement stock portfolio. On November 7, Pepsi said it was in collaboration with Hard Rock Cafe, a British-based multinational chain of theme restaurants, in which they hosted one of the topmost events with Afro and High Life musical performances with singers Stones and Bones. PepsiCo has an impressive dividend profile that goes back close to five decades. 

On October 14, Barclays analyst Lauren Lieberman maintained an Overweight rating on PepsiCo, Inc. stock and raised the price target to $185 from $183, noting that the company’s beat and raise in the third quarter is firmly characteristic of its flexibility that screens all the more attractive in the current operating environment.

At the end of the third quarter of 2022, 72 hedge funds in the database of Insider Monkey held stakes worth $4.8 billion in PepsiCo, Inc., compared to 65 in the previous quarter worth $5.3 billion.

In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and PepsiCo, Inc. was one of them. Here is what the fund said:

“Also in the stable and predictable cash flow camp, though with a very different business model, global food and beverage company PepsiCo reported very strong organic growth in the first quarter, driven by healthy price/mix, and raised revenue guidance, while holding EPS guidance. Notably, its beverage business showed expanding margins.”

2. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 85

Johnson & Johnson researches and develops, manufactures, and sells various products in the healthcare field. It is one of the elite safe consumer stocks for a retirement stock portfolio. On October 19, Bernstein analyst Lee Hambright maintained a Market Perform rating on Johnson & Johnson stock and lowered the price target to $190 from $194, noting that the company reported strong third quarter results as sales grew 8.2% organic to $23.8 billion. The firm has paid a growing dividend to shareholders for the past sixty years. 

Among the hedge funds being tracked by Insider Monkey, Camas, Washington-based firm Fisher Asset Management is a leading shareholder in Johnson & Johnson with 5.9 million shares worth more than $967.3 million. 

In its Q2 2022 investor letter, Mayar Capital, an asset management firm, highlighted a few stocks and Johnson & Johnson was one of them. Here is what the fund said:

“Johnson & Johnson is currently our largest position and a long-standing holding. The majority of the group’s sales come from its collection of pharmaceutical franchises, but a large majority (~45%) comes from its collection of medical device businesses and its consumer brands.

Here’s how JNJ make and spends a dollar of revenues: As of 2021, about 55 cents of that dollar comes from its pharmaceutical sales – sales of drugs to pharmacies and distributors – while 30 cents come from the sale of medical devices, such as surgery equipment and orthopaedics. The rest of that dollar in sales comes from sales of JNJ’s consumer brands such as Listerine mouthwash, Nicorette nicotine tablets and Neutrogena cosmetics (…read more)

1. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 89

Home Depot, Inc. (NYSE:HD) operates as a home improvement retailer. It is one of the major safe consumer stocks for a retirement stock portfolio. On October 31, Citi analyst Steven Zaccone maintained a Buy rating on The Home Depot, Inc. stock and lowered the price target to $340 from $348, noting that macro fears are high for hardline retail coverage heading into the third quarter earnings season. The company has an impressive dividend profile stretching back close to two decades. 

Among the hedge funds being tracked by Insider Monkey, Camas, Washington-based firm Fisher Asset Management is a leading shareholder in The Home Depot, Inc. with 8.2 million shares worth more than $2.25 billion.

In its Q1 2022 investor letter, Diamond Hill Capital, an asset management firm, highlighted a few stocks and The Home Depot, Inc. was one of them. Here is what the fund said:

“The Home Depot, Inc. shares underperformed as continued solid fundamental results were outweighed by concerns about the impact rising mortgage rates may have on the housing market and general inflationary pressures potentially leading to a consumer spending slowdown. We view the long-term prospects and multi-year fundamental outlook as unchanged.”

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This article is originally published at Insider Monkey.