Is it a good time to invest in consumer staples stocks?

It's impossible to predict the short-term movements of the market, but investors tend to favor consumer staples stocks during times of uncertainty since they generally outperform in weak economies due to their defensive positioning.

What is the average annual return of consumer staples?

Determining the average annual return of consumer staples depends on how you define the sector and which stocks you choose. Based on the history of the Consumer Staples Select Sector SPDR Fund (NYSEMKT: XLP), consumer staples stocks have compounded at a 7% rate with dividends reinvested since 1998.

Should I have consumer staples in my portfolio?

Whether you should have consumer staples in your portfolio will depend on your investing style. If you are a risk-averse investor or a retiree looking for reliable dividend income, then investing in consumer staples makes sense. If you're a growth-oriented, risk-seeking investor, you'll probably favor other sectors over consumer staples.

What consumer staple stocks pay the most dividends?

Some of the best-paying consumer staples stocks are tobacco stocks. As of January 2026, Altria paid a dividend yield of 6.9%, and British American Tobacco offered a 5.5% dividend yield.

Should I invest in individual consumer staples stocks or ETFs?

If you want to invest in consumer staples stocks, but aren't sure which ones to choose, an ETF as a good option. The biggest ones carry the largest, best-known consumer staples stocks.

How should I track the performance of consumer staples stocks?

In addition to the performance of the stock itself, it's a good idea to track dividend growth, organic revenue growth, operating margin, and adjusted earnings per share growth.

Best Consumer Staples Stocks to Buy in 2026

Q: Are consumer staples stocks recession-proof?

Consumer staples stocks tend to be recession-proof. They sell products that consumers buy regardless of the economic environment, like food, paper products, or cleaning supplies.

Best Consumer Staples Stocks to Buy in 2026 and How to Invest in Them

By Jeremy Bowman – Updated Feb 3, 2026 at 4:51 PM EST | Fact-checked by Frank Bass

Key Points

Consumer staples stocks offer stable dividends and resilience during economic downturns.
These stocks are considered safe investments due to their non-cyclical nature.
Investing in consumer staples ETFs can provide broad sector exposure.

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Ticker Information Table
Name and ticker	Market cap	Dividend yield	Industry
Procter & Gamble (NYSE:PG)	$357.9 billion	2.75%	Household Products
PepsiCo (NASDAQ:PEP)	$219.6 billion	3.50%	Beverages
Philip Morris International (NYSE:PM)	$264.2 billion	3.32%	Tobacco
Costco Wholesale (NASDAQ:COST)	$436.1 billion	0.53%	Food and Staples Retailing

Data as of Mar 6, 2026. Showing 4 of 4 tickers.

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NYSE: PG

Procter & Gamble

Today's Change

(-2.72%) $-4.31

Current Price

$153.99

Key Data Points

Market Cap

$358B

Day's Range

$153.77 - $157.10

52wk Range

$137.62 - $179.99

Volume

3.1K

Avg Vol

11M

Gross Margin

51.11%

Dividend Yield

2.75%

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Procter & Gamble (PG -2.72%) is best known for its marquee brands such as Tide, Gillette, and Crest. The household and personal care company is almost 200 years old. A large number of its brands hold the No. 1 or No. 2 market share position in their categories, including paper products, laundry detergent, diapers, and beauty products. P&G is also a Dividend King.

P&G has recently developed a number of innovative products, including the nontoxic insect repellent Zevo; a dye-free, silicone-free, and sulfate-free version of Head & Shoulders called Head & Shoulders BARE; and Spruce, a weed killer that cuts off the weed's water supply on contact. Spruce is P&G's first entry into the large lawn care category.

P&G has performed well during the recent inflationary era since it can pass along price increases to its customers, although its growth has slowed down recently. P&G finished its fiscal 2025 ending on June 30 with flat net sales and 2% organic sales growth. Core, or organic, earnings per share grew 4% to $6.83. Given the uncertainty around tariffs and weakening consumer sentiment, this shows the company's ability to deliver at least modest growth in challenging environments.

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2. PepsiCo

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NASDAQ: PEP

PepsiCo

Today's Change

(-2.01%) $-3.27

Current Price

$159.20

Key Data Points

Market Cap

$220B

Day's Range

$158.73 - $161.95

52wk Range

$127.60 - $171.48

Volume

235

Avg Vol

8.6M

Gross Margin

54.36%

Dividend Yield

3.50%

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NYSE: PM

Philip Morris International

Today's Change

(-5.16%) $-9.24

Current Price

$169.80

Key Data Points

Market Cap

$264B

Day's Range

$167.94 - $176.98

52wk Range

$142.11 - $191.30

Volume

344K

Avg Vol

5.7M

Gross Margin

65.23%

Dividend Yield

3.32%

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Philip Morris (PM -5.16%) is one of the three global tobacco giants, but the company has the strongest position of the three. Philip Morris was formed when Altria (MO -1.50%) and Philip Morris split in 2008, with Altria retaining the domestic business, while Philip Morris took the international markets.

That's proven to favor Philip Morris since international tobacco markets have been much more resilient than the U.S., where smoking has been steadily declining for decades.

In addition to its exposure to more smoking-friendly markets, Philip Morris has also outperformed peers like Altria and British American Tobacco (BTI -4.02%) in next-gen, smoke-free products, which now make up more than 40% of Philip Morris' revenue and a higher percentage of its gross profit.

The company has found success in IQOS, its heat-not-burn tobacco sticks, which use tobacco rather than the e-liquid vapes use, and heat to a temperature where it turns into vapor rather than smoke. As of the end of 2024, there were more than 32 million IQOS users worldwide, and the number was growing. The company launched IQOS in the U.S. in March 2025.

Additionally, the company's acquisition of Swedish Match in 2023 has paid off, giving it ownership of the popular Zyn oral nicotine pouches, whose shipments jumped 36% to 224.6 million cans in the third quarter of 2025. Philip Morris is also expanding production at its Kentucky Zyn facility and adding a new one in Colorado.

Finally, Philip Morris offers a reliable dividend yield of 3.7%.

4. Costco Wholesale

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NASDAQ: COST

Costco Wholesale

Today's Change

(-2.43%) $-24.48

Current Price

$982.26

Key Data Points

Market Cap

$436B

Day's Range

$978.89 - $999.00

52wk Range

$844.06 - $1067.08

Volume

102

Avg Vol

2.6M

Gross Margin

12.88%

Dividend Yield

0.53%

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Costco Wholesale (COST -2.43%) has been one of the best-performing consumer staples stocks on the market in recent history.

Unlike the other stocks on the list, Costco doesn't make products for other retailers to sell. Instead, as a retailer of primarily consumer staples, more than half of its sales come from groceries.

Costco also has many of the components of a consumer staples stock that its customers look for, including a stable business model built around its reputation for bargain prices on bulk goods. Its membership model adds another layer of resilience since most of its profits come from membership fees. Customers typically renew memberships at a rate of around 90%.

The retailer continues to open new stores and has been delivering solid comparable sales growth and e-commerce growth. Comparable sales jumped 7.6% in fiscal 2025, an impressive number for a retailer of its size.

Costco also has a track record of rewarding investors with special dividends every three to five years, which makes up for its paltry dividend yield of 0.5%.

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Investing in consumer staples stocks FAQ

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About the Author

Jeremy Bowman has been a contributing Motley Fool stock market analyst, covering technology, consumer goods, and macroeconomic trends since 2011. Before The Motley Fool, Jeremy was a newspaper reporter, restaurant manager, and English teacher abroad. He holds a bachelor’s degree in English from Colorado College and a master’s degree in business administration from American University. One of his Motley Fool headlines was briefly featured on Late Night with Stephen Colbert.

TMFHobo

@TMFBowman

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Colgate-Palmolive and Costco Wholesale. The Motley Fool recommends British American Tobacco P.l.c. and Philip Morris International. The Motley Fool has a disclosure policy.

Advantages of consumer staples stocks

Consumer staple stocks have a number of advantages and benefits for investors. Those include:

Consumer staples stocks are among the safest and most recession-proof stocks on the market. These companies sell products that consumers buy regardless of the economic environment, which makes them attractive, especially for risk-averse investors.

These tend to be timeless companies. Businesses like Coca-Cola (KO -1.37%), PepsiCo (PEP -2.01%), and Procter & Gamble (PG -2.72%) have been around for more than 100 years, showing their ability to withstand a variety of challenges and remain at the top of their industries.

Consumer staples stocks tend to be strong and reliable dividend payers. Many of them are Dividend Kings, or stocks that have raised their dividends every year for 50 years or more.

Consumer staples companies can be resilient in inflationary environments because they often have pricing power and have the ability to pass along price increases and negotiate with suppliers.

These companies have a long history of growing both organically and through acquisitions, helping them maintain dominance over their industries.

Risks of consumer staples stocks

Just as there are advantages to owning consumer staples stocks, there are also risks. Let's take a look at a few:

Consumer staples stocks tend to be expensive relative to their growth rate. Because they are considered safe, they tend to trade at higher price-to-earnings (P/E) ratios than cyclical stocks, though this makes them more vulnerable to multiple compression, or a stock price falling because its valuation goes down.

Consumer staples companies tend to be slow-growth businesses. Typically, these companies won't deliver the kind of eye-popping returns you might find from a tech stock. If they outperform, it's generally through a combination of dividends and a stronger performance during bear markets.

Growth opportunities also tend to be limited because they generally compete in mature industries. The products that Procter & Gamble sells, like shampoo and razors, are well-established, and there is not much room for innovation.

Consumer trends can affect performance. For example, pressure on soda and tobacco has led to some of those sector stocks underperforming in recent years.

Returns can be lower, especially during bull markets. Investors tend to rotate into high-growth stocks during bull markets, meaning consumer staples stocks may underperform.

Best Consumer Staples Stocks to Buy in 2026 and How to Invest in Them

Key Points

Key Data Points

2. PepsiCo

Key Data Points

Key Data Points

4. Costco Wholesale

Key Data Points

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Investing in consumer staples stocks FAQ

Is it a good time to invest in consumer staples stocks?

Is it a good time to invest in consumer staples stocks?

What is the average annual return of consumer staples?

What is the average annual return of consumer staples?

Should I have consumer staples in my portfolio?

Should I have consumer staples in my portfolio?

What consumer staple stocks pay the most dividends?

What consumer staple stocks pay the most dividends?

Are consumer staples stocks recession-proof?

Are consumer staples stocks recession-proof?

Should I invest in individual consumer staples stocks or ETFs?

Should I invest in individual consumer staples stocks or ETFs?

How should I track the performance of consumer staples stocks?

How should I track the performance of consumer staples stocks?

About the Author

Stocks Mentioned

Our Guides

Premium Investing Services

Investing in consumer staples stocks FAQ

Is it a good time to invest in consumer staples stocks?

Is it a good time to invest in consumer staples stocks?

What is the average annual return of consumer staples?

What is the average annual return of consumer staples?

Should I have consumer staples in my portfolio?

Should I have consumer staples in my portfolio?

What consumer staple stocks pay the most dividends?

What consumer staple stocks pay the most dividends?

Are consumer staples stocks recession-proof?

Are consumer staples stocks recession-proof?

Should I invest in individual consumer staples stocks or ETFs?

Should I invest in individual consumer staples stocks or ETFs?

How should I track the performance of consumer staples stocks?

How should I track the performance of consumer staples stocks?

What are consumer staples stocks?

Top Agriculture Stocks for 2026 and How to Invest

Best Food Stocks to Buy in 2026: Are They Right For Your Portfolio?

Best Utility Stocks to Buy in 2026 and How to Invest in Them

Best Apparel Stocks to Buy in 2026 and How to Invest in Them

Key Data Points

Top consumer staples stocks to consider

1. Procter & Gamble

2. PepsiCo

How to decide if consumer staples stocks belong in your portfolio

The bottom line

Related investing topics

FAQ

Key Data Points

Key Data Points

Key Data Points

3. Philip Morris

4. Costco Wholesale

Advantages of consumer staples stocks

Risks of consumer staples stocks