13 Best FMCG Stocks To Buy Now
In this article, we discuss the 13 best FMCG stocks to buy now. If you want to skip our industry analysis you can see the 5 Best FMCG Stocks To Buy Now.
Consumer confidence has remained relatively stable throughout the summer. According to a survey by McKinsey, a third of US consumers, up from 26% in June 2022, express optimism about their financial well-being and anticipate improvements in the US economy in the near future. This slight increase in optimism is partly attributed to their perception of prices. Consumers are no longer witnessing the significant price spikes that had concerned them in 2022 and early 2023. 80% of US consumers, as opposed to just 10% in 2022, now report price stability in household supplies over the past three months. When individuals aim to reduce their expenses, the initial step often involves cutting down on food expenditures. Within that same survey, about 28% of US consumers have indicated that they've curtailed their food spending as part of their cost-saving measures. In the face of such market environments, the Fast-moving consumer goods (FMCG)
Fast-moving consumer goods, also called consumer packaged goods (CPG), are products in high demand, known for their affordability, and consequently, they have a rapid turnover. These items are considered "fast-moving" because they quickly sell off the shelves of stores and supermarkets, given their regular use by consumers. As one of the world's largest industries, the global FMCG sector has maintained robust and steady growth over the past decade, thanks to the growing trend of experiential retailing, where shopping is viewed as a social activity by consumers. The worldwide FMCG market is projected to attain a size of $18,939.4 billion by 2031, with a compound annual growth rate (CAGR) of 5.1% from 2022 to 2031.
In the face of inflation and challenging market conditions, people still need to purchase essentials like food. This resilience makes FMCG stocks a more favorable option compared to other sectors in the stock market. Additionally, many grocery stocks offer dividends, providing investors with a consistent source of passive income. Some of the best FMCG stocks encompass Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), PepsiCo, Inc. (NASDAQ:PEP), and Colgate-Palmolive Company (NYSE:CL), among others, with more in-depth discussions provided below. These stocks are also in high demand among hedge funds.
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Our Methodology
Following a comprehensive analysis of FMCG stocks listed on NYSE and NASDAQ, we have curated a selection of 13 of the best FMCG stocks that represent a valuable asset for investors looking to diversify their portfolio. These stocks exhibit strong financial fundamentals and have gained popularity among the 910 elite hedge funds monitored by Insider Monkey as of the conclusion of the second quarter of 2023.
13. Dollar Tree, Inc. (NASDAQ:DLTR)
Number of Hedge Fund Holders: 37
Dollar Tree, Inc. (NASDAQ:DLTR) is a retail chain in the United States offering a variety of products at multiple price points. The company is based in Chesapeake, Virginia, and boasts a network of 15,115 stores spread across the 48 contiguous U.S. states and Canada. Leveraging a widespread logistics network comprising 24 distribution centers, Dollar Tree primarily caters to price-conscious customers. In Q2 2023, the company's consolidated net sales, encompassing the revenue from its three primary stores - Dollar Tree, Family Dollar, and Enterprise, witnessed a robust increase of 8.2%, reaching $7.32 billion.
According to Insider Monkey’s third quarter database, 37 hedge funds were bullish on Dollar Tree, Inc. (NASDAQ:DLTR), compared to 38 funds in the earlier quarter. Paul Hilal’s Mantle Ridge LP is the biggest position holder in the company, with 11.36 million shares worth $1.63 billion.
Madison Mid Cap Fund made the following comment about Dollar Tree, Inc. (NASDAQ:DLTR) in its Q3 2023 investor letter:
“The bottom five detractors for the quarter were Dollar Tree, Inc. (NASDAQ:DLTR), MKS Instruments, CarMax, Floor & Décor, and Liberty Media- Formula One. The new management team at Dollar Tree is investing heavily to drive growth. While we are beginning to see some early signs of progress, including strong positive consumer traffic to their stores in the third quarter, these investments, combined with a challenging retail environment, are negatively impacting margins in the short run.
We added to Dollar Tree following the stock’s weakness in the quarter. Investors are concerned over weaker than expected margins, primarily caused by a mix shift to consumable products (versus higher margin discretionary products) and high theft (or inventory ‘shrink’). These dynamics have also been experienced by Dollar Tree’s closest peer, Dollar General, and broadly across the retail landscape. While certainly not favorable in the short term, we view these as natural cyclical aspects of the retail industry that won’t be sustained forever. However, more important to the long-term earnings power of the business, we are encouraged by some of the early results from the various initiatives management has in place. Namely, customer traffic has meaningfully increased at both the Dollar Tree and Family Dollar banners, driving solid market share gains and increased sales per square foot, which we believe to be one of the most important metrics to track the company’s progress. With these promising early results, we used the cloud of cyclical headwinds to opportunistically add to our position.”
Much like Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), PepsiCo, Inc. (NASDAQ:PEP), and Colgate-Palmolive Company (NYSE:CL), Dollar Tree, Inc. (NASDAQ:DLTR) is one of the best FMCG stocks to buy now according to elite investors.
12. Sysco Corporation (NYSE:SYY)
Number of Hedge Fund Holders: 39
Sysco Corporation (NYSE:SYY), the largest wholesale food distributor in the United States, is a multinational corporation specializing in the marketing and distribution of food products, smallwares, kitchen equipment, and tabletop items to restaurants, healthcare facilities, and educational institutions.
On August 24, Sysco Corporation (NYSE:SYY) announced its quarterly dividend of $0.50 per share, maintaining its dividend at the same level as the previous one. With an impressive track record of consistently increasing dividends for 54 years, the company is regarded as one of the top FMCG stocks. As of October 28, the stock boasted a dividend yield of 3.10%.
In Q2 2023, the number of hedge funds monitored by Insider Monkey holding stakes in Sysco Corporation (NYSE:SYY) increased to 39, up from 34 in the previous quarter. The cumulative value of these holdings exceeded $703 million. Yacktman Asset Management, with over 1.5 million shares, was the company's largest stakeholder in Q2.
11. The Kroger Co. (NYSE:KR)
Number of Hedge Fund Holders: 43
The Kroger Co. (NYSE:KR), commonly known as Kroger, is an American retail corporation that operates a chain of supermarkets and multi-department stores throughout the United States, spanning 35 states and totaling more than 2,700 locations. This extensive presence solidifies its position as one of the world's major food retailers.
On September 14, The Kroger Co. (NYSE:KR) made an announcement regarding its regular quarterly dividend, which stood at $0.29 per share, consistent with its history of maintaining dividends. This marks the company's 17th consecutive year of increasing dividends, reinforcing its reputation as a top choice for long-term investors. As of October 28, the stock offered an appealing dividend yield of 2.61%, making it an attractive option for income-oriented investors.
In the second quarter of 2023, Warren Buffett's Berkshire Hathaway held 50 million shares of The Kroger Co. (NYSE:KR), with a total value exceeding $2.3 billion, representing 0.67% of the firm's portfolio.
10. Monster Beverage Corporation (NASDAQ:MNST)
Number of Hedge Fund Holders: 44
Monster Beverage Corporation (NASDAQ:MNST) is an American company specializing in the development, marketing, sale, and distribution of energy drink beverages and concentrates, including popular brands such as Monster Energy, Relentless, and Burn.
In late July, Monster Beverage Corporation (NASDAQ:MNST) announced the successful completion of an acquisition through its subsidiary, Blast Asset Acquisition LLC. The company acquired a significant portion of assets from Vital Pharmaceuticals, Inc., and affiliated entities collectively known as "Bang Energy." This acquisition was executed at an approximate purchase price of $362 million, with potential adjustments. The acquired assets include Bang Energy beverages and a beverage production facility situated in Phoenix, Arizona.
According to data from Insider Monkey, a total of 44 hedge funds held stakes in Monster Beverage Corporation. The most substantial ownership was attributed to Neal C. Bradsher's Broadwood Capital, which held a significant stake in the company valued at $535 million.
9. General Mills, Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 48
General Mills, Inc. (NYSE:GIS) is a prominent American multinational company recognized for its production and marketing of branded processed consumer foods, widely available through retail channels. The company's origins trace back to its establishment near Saint Anthony Falls in Minneapolis, along the Mississippi River, where it initially gained prominence as a significant flour milling operation.
On September 21, RBC Capital revised its price target for General Mills, Inc. (NYSE:GIS), lowering it from $78 to $76 while maintaining a Sector Perform rating on the stock. In their research note, the firm characterized the company's Q1 results as relatively straightforward, with challenges in the Pet segment offset by strong performance in the Foodservice and International sectors. Additionally, the firm upholds its expectations for General Mills, Inc. (NYSE:GIS), anticipating organic net sales growth of 3% and EPS growth of 4% for FY24.
As of the end of Q2 2023, 48 hedge fund investors had allocated their investments to General Mills, Inc. (NYSE:GIS), as indicated by the Insider Monkey database. The largest shareholder of General Mills, Inc. (NYSE:GIS) was Bridgewater Associates, with a holding of approximately 1.1 million shares valued at about $81.6 million.
8. Philip Morris International Inc. (NYSE:PM)
Number of Hedge Fund Holders: 54
Philip Morris International Inc. (NYSE:PM) is a multinational tobacco corporation with its origins in the United States, serving consumers in over 180 countries globally. The company's flagship and best-selling product is Marlboro, and it is frequently grouped with other tobacco industry giants under the umbrella term "Big Tobacco."
On September 13, Philip Morris International Inc. (NYSE:PM) declared a quarterly dividend of $1.30 per share, representing a 2.4% increase compared to the previous dividend of $1.27. Shareholders received this dividend on October 12, and the record date for eligible shareholders was set at September 27.
Insider Monkey's second-quarter data indicated that 54 hedge funds expressed a bullish stance on Philip Morris International Inc. (NYSE:PM), slightly down from the 55 funds in the previous quarter. Terry Smith's Fundsmith LLP emerged as one of the company's major stakeholders, with a holding of 15.8 million shares valued at $1.54 billion.
7. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 57
Mondelez International, Inc. (NASDAQ:MDLZ), branded as Mondelēz International, is a Chicago-based multinational company specializing in confectionery, food, beverage, and snack food. With an annual revenue of approximately $26 billion, Mondelez conducts its business in roughly 160 countries. At present, Mondelez International, Inc. (NASDAQ:MDLZ) offers a quarterly dividend of $0.425 per share. Notably, the company has consistently increased its dividends for the past nine years. As of October 28, the stock boasts a dividend yield of 2.61%.
In Q2 2023, the count of hedge funds in Insider Monkey’s database holding positions in Mondelez International, Inc. (NASDAQ:MDLZ) increased to 55, up from 51 in the preceding quarter. The total value of these holdings now exceeds $1.74 billion. Among these hedge funds, Holocene Advisors was the company’s leading stakeholder in Q2.
6. Colgate-Palmolive Company (NYSE:CL)
Number of Hedge Fund Holders: 58
Colgate-Palmolive Company (NYSE:CL) is a multinational corporation headquartered in the heart of Midtown Manhattan, New York City, conveniently located along Park Avenue. The company's primary focus revolves around the manufacturing, distribution, and offering of a diverse range of household, healthcare, personal care, and veterinary products.
On September 14, the company declared a quarterly dividend of $0.48 per share, maintaining a consistent dividend policy. Remarkably, Colgate-Palmolive Company (NYSE:CL) has consistently increased its dividends for an impressive streak spanning 61 consecutive years. As of October 28, the stock boasted a dividend yield of 2.67%.
According to Insider Monkey's second-quarter 2023 database, which profiles 910 hedge funds, 58 of these funds held positions in Colgate-Palmolive Company (NYSE:CL). The largest stockholder among them was First Eagle Investment Management, with a portfolio comprising 11.1 million shares of Colgate-Palmolive Company (NYSE:CL), collectively valued at $854.6 million.
Colgate-Palmolive Company (NYSE:CL), like Walmart Inc. (NYSE:WMT), The Procter & Gamble Company (NYSE:PG), and PepsiCo, Inc. (NASDAQ:PEP), ranks as one of the best FMCG stocks to invest in.
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Disclosure: None. 13 Best FMCG Stocks To Buy Now is originally published on Insider Monkey.
