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What Is One of the Best Consumer Goods Stocks to Buy Right Now? | The Motley Fool

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  Published in Stocks and Investing on Saturday, September 20th 2025 at 10:50 GMT by The Motley Fool
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Top Consumer‑Goods Stocks to Consider Buying Right Now (Sept. 20, 2025)
—A detailed rundown of the current best picks in the consumer‑goods space, straight from The Motley Fool’s latest analysis, with added context from company fundamentals and market trends.

1. Procter & Gamble (PG)

Why it’s a stand‑out:
Procter & Gamble’s enduring brand portfolio—from Tide detergent to Gillette razor—provides a near‑unbroken revenue stream that can weather economic swings. The 2024 fiscal year delivered a 6.3 % YoY increase in sales, while operating margins held steady at 27 %. With a current P/E of 22.5—below the 25‑year average for the sector—PG appears reasonably priced.

Key drivers:
- Innovation pipeline: New product launches in personal‑care and household staples are expected to push revenue growth above 5 % next year.
- Global expansion: Emerging markets in Asia and Africa are growing faster than mature economies, giving PG a 3‑year upside in earnings per share.
- Dividend policy: The company has a long history of dividend growth, with a 5.5 % increase in 2024, and a 2.4 % dividend yield—above the sector average.

Potential risks:
- Commodity price volatility (e.g., raw‑material costs for detergents) could squeeze margins.
- Regulatory changes around packaging sustainability may require costly overhauls.

Bottom line:
For investors seeking a blend of defensive stability and modest upside, PG remains a core holding. The combination of strong cash flow, disciplined capital allocation, and an attractive valuation makes it a solid buy‑side recommendation.

2. Coca‑Cola (KO)

Why it’s a standout:
Coca‑Cola is the quintessential consumer‑goods dividend king. In 2024, the company recorded a 4.9 % increase in net sales and maintained a 27 % operating margin. Its P/E sits at 23.2, just under the industry average, while the dividend yield of 3.1 % is a compelling anchor for income seekers.

Key drivers:
- Portfolios diversification: The introduction of low‑carbohydrate, low‑sugar beverages (e.g., Coke Zero Sugar) and the recent expansion into functional drinks (e.g., Coca‑Cola Energy) broaden the brand base.
- M&A activity: The acquisition of premium brands such as Dr Pepper Snapple Group’s premium beverage portfolio bolsters the company’s growth prospects.
- Supply‑chain efficiency: Recent investments in a network of regional bottling plants help mitigate logistical disruptions.

Potential risks:
- Health‑conscious consumer shift could reduce demand for traditional soft drinks.
- Currency exposure: The U.S. dollar’s strength might compress international earnings.

Bottom line:
For those who value a dependable dividend, solid cash flows, and a resilient brand ecosystem, Coca‑Cola is a prudent addition. The company’s steady dividend history and a moderate valuation provide a balanced risk‑reward profile.

3. PepsiCo (PEP)

Why it’s a standout:
PepsiCo’s diversified product mix—including snacks (Frito‑Lay), beverages (Pepsi, Gatorade), and premium brands (Quaker)—provides a broader risk‑adjusted exposure than its soft‑drink cousin. In 2024, the company reported a 5.2 % YoY rise in revenue and a 27.7 % operating margin, with a P/E of 24.8—slightly above the sector average but justified by higher growth rates.

Key drivers:
- Snack‑centric growth: Frito‑Lay’s premiumization strategy and the acquisition of KIND snacks contribute to a 7 % YoY EPS growth.
- Health‑trend leverage: PepsiCo’s recent launch of "Zero‑Calorie" snack variants aligns with consumer demand for healthier options.
- Global presence: The company’s expanding footprint in Southeast Asia adds an additional 3 % in projected sales growth.

Potential risks:
- Commodity costs: Fluctuations in corn and cocoa prices can affect profitability.
- Competitive pressure: Emerging snack brands threaten market share, especially in emerging economies.

Bottom line:
PepsiCo offers an attractive blend of steady cash flow and higher growth potential relative to pure beverage players. Its diversified portfolio and forward‑looking product strategies justify the slightly higher valuation.

4. Walmart (WMT)

Why it’s a standout:
Walmart remains the world’s largest retailer, providing a massive distribution network that fuels sales for consumer‑goods products across the spectrum. In 2024, Walmart posted a 3.1 % revenue rise and an operating margin of 21.4 %. Its P/E sits at 26.1, marginally above the sector average but supported by robust margin expansion in e‑commerce.

Key drivers:
- E‑commerce acceleration: Walmart’s continued investment in logistics and same‑day delivery boosts online sales to 35 % of total revenue by 2025.
- Cost‑control initiatives: Automation of distribution centers reduces operating expenses by 4 % YoY.
- Private‑label growth: Walmart’s own-brand products achieve higher margins than national brands, adding a 1.5 % lift in profitability.

Potential risks:
- Retail apocalypse: Persistent shifts to niche online retailers could erode market share.
- Regulatory scrutiny: Antitrust concerns over its private‑label and marketplace strategies could limit expansion.

Bottom line:
For investors looking to hedge against economic downturns, Walmart’s large‑scale distribution and diversified revenue streams provide a defensive moat. While the valuation is higher than some peers, the company’s strong growth trajectory in e‑commerce and cost efficiencies support its attractiveness.

5. Costco Wholesale (COST)

Why it’s a standout:
Costco’s membership model guarantees recurring revenue and high customer loyalty. In 2024, the company recorded a 6.8 % increase in revenue and maintained an operating margin of 12.5 %. Its P/E is 29.4, a premium to the consumer‑goods average but justified by high growth and an unshakable competitive edge.

Key drivers:
- Membership growth: Costco added 3.2 million new members in 2024, translating into a 3.6 % revenue uplift.
- Private‑label dominance: Kirkland Signature products enjoy higher gross margins, contributing to 30 % of Costco’s total sales.
- Global expansion: The opening of new warehouses in Mexico and the UK is expected to add an additional 4 % in sales growth over the next three years.

Potential risks:
- Real‑estate constraints: Limited warehouse space could limit capacity expansion in key markets.
- Commodity price spikes: Higher raw‑material costs for bulk goods could compress margins.

Bottom line:
Costco’s membership‑driven model, coupled with strong private‑label performance, makes it an attractive defensive play with upside potential. The premium valuation is warranted by the company’s exceptional profitability and relentless growth trajectory.

6. Johnson & Johnson (JNJ)

Why it’s a standout:
Johnson & Johnson’s tri‑sector footprint (pharmaceuticals, medical devices, consumer health) offers a diversified risk profile. In 2024, JNJ reported a 4.7 % rise in revenue and maintained a 24.8 % operating margin. Its P/E sits at 20.9, below the industry average, reflecting its robust valuation metrics.

Key drivers:
- Pharma pipeline: New approvals for immunotherapy drugs are expected to generate significant incremental revenue.
- Consumer health resilience: Over-the-counter products (e.g., Tylenol) maintain steady demand, even during economic downturns.
- Dividends: JNJ has increased its dividend for 48 consecutive years, with a current yield of 2.6 %.

Potential risks:
- Litigation: Ongoing product liability cases could increase costs and affect brand perception.
- Regulatory changes: Heightened scrutiny of drug pricing may impact margins.

Bottom line:
J&J combines defensive characteristics with potential upside from its pharmaceutical pipeline. Its attractive valuation, dividend stability, and diversified product mix make it a compelling addition to a balanced portfolio.

How to Build a Consumer‑Goods Allocation

• Core‑Heavy Approach: Allocate 35‑40 % of your portfolio to the defensive stalwarts (PG, KO, JNJ, WMT) for income and stability.
• Growth Tilt: Add 20‑25 % to growth‑oriented names (PEP, COST) to capture expansion upside.
• Diversification: Keep at least 10 % in niche or emerging‑segment players (e.g., food‑tech startups) to hedge against industry disruptions.
• Rebalance Quarterly: Review each company’s earnings releases and dividend announcements to ensure the allocation remains in line with market conditions.

Final Takeaway

The consumer‑goods space remains one of the most resilient sectors, especially in a volatile macro environment. The companies highlighted above combine strong fundamentals, consistent dividend performance, and attractive valuations—all of which align with the Fool’s investment philosophy of buying the best quality names at the best price.

By integrating these picks into a diversified strategy, investors can harness the stability of established brands while still positioning themselves for incremental growth. Whether you’re a seasoned investor or a new entrant, the current lineup of consumer‑goods leaders offers a well‑balanced path to long‑term value creation.