7 consumer stocks to buy and hold for years

Although concerns such as inflation, interest rates and a possible recession continue to challenge equities, that doesn’t mean you should sit on the sidelines. Rather, you should always be active in the markets, focusing on high-quality, resilient names that can ride out any additional uncertainty that may arise. For example, with these buy-and-hold consumer stocks.

What do I mean when I say “buy and hold?” These are not stocks to be traded. Nor are they stocks to buy before a single catalyst, only to sell once said catalyst occurs. No, these are the stocks to buy, with the intention of holding them for many years. Through bull and bear markets.

It can pay off in two ways. First, by paying regular dividends. Second, by gradual appreciation. Together, this can lead to strong returns. What are some of the best consumer stocks to buy and hold? Consider these seven, all but one of which get an “A” grade in my portfolio binder.

CALM Cal Maine Foods $51.98
GIS General Mills $75.64
HSY Hershey Company $226.42
KO Coca Cola $64.05
PUBLISH Publish holdings $88.49
CPC Pilgrim’s Pride $31.05
TWNK Hostess Marks $22.95

Consumer stocks to buy and keep: Cal-Maine Foods (CALM)

Source: Casimiro PT / Shutterstock.com

Based in Ridgeland, Mississippi, Cal-Maine Foods (NASDAQ:CALM) is a major egg producer. It markets eggs under brands such as Egg-Land’s Best and Land O’ Lakes. Shares of this consumer staples stock have held up very well since the start of the year.

Rising prices have countered rising costs, such as soaring corn and soybean prices, to feed the chickens that lay the eggs. Revenues have soared over the past year and profits have returned to levels not seen in several years. But with CALM stock up 44% year-to-date, it’s not too late to enter a long-term position.

Given its pricing power, food inflation should continue to work in Cal-Maine’s favor. While arguably a value stock, with its low price-earnings ratio of 10.3x, it’s certainly not a high-yield stock. Its forward dividend yield is just 0.93%. However, if high earnings continue, there is plenty of room to increase this payout.

This title gets an “A” rating in my portfolio binder.

General Mills (GIS)

General Mills Cereal, stock GIS

Source: Jack’s creations / Shutterstock.com

One of the best-known food companies, General Mills (NYSE:GIS) needs a little introduction. Owning dozens of popular food brands, from Cheerios to Yoplait, it’s easy to see why its stock is one of the best consumer stocks to buy and hold.

Producing everyday food products, it is a recession-proof company. Although it faced inflationary pressures, it managed to increase its gross margins last quarter, despite the continued rise in ingredient, labor and shipping costs. This bodes well for the future. Even if inflation persists, the company may still be able to generate earnings growth, although that growth will likely be in the single-digit range.

This will allow the company to continue to increase its dividend (current forward yield of 2.93%). Additionally, SIG’s stock will likely continue to rise, alongside an increase in earnings. Trading at a favorable valuation (18.5x earnings), consider making this a long-term position.

This title gets an “A” rating in my portfolio binder.

Hershey Company (HSY)

The entrance to the Hershey factory in downtown Hershey, Pennsylvania.  HSY stock.

Source: George Sheldon / Shutterstock.com

Hershey Company (NYSE:HSY) is another famous food company that has managed to stay ahead of inflation. As I mentioned last month, the confectionery and snacks company released strong numbers in its latest quarterly earnings report. He also noted his orientations.

With that, it’s no surprise that HSY stock is up in a down year for stocks. While major indexes remain under double digits, this stock is up double digits (12.95%) year-to-date (or year-to-date). However, this does not mean that it is too late to make this security a long-term security in your portfolio.

Over the long term, Hershey’s will likely continue to rise as profits increase. Its 1.65% dividend yield will boost its total returns. Especially since this payment increases over time. The company has thirteen years of dividend growth experience. It has increased its dividend by an average of 7.83% per year over the past five years.

This title gets an “A” rating in my portfolio binder.

Consumer stocks to buy and hold: Coca-Cola (KO)

Close up of Coca Cola drink cans lying on paper background.  Knockout action

Source: Tetiana Shumbasova / Shutterstock.com

No list of the best long term consumer stocks would be complete without mentioning Coca Cola (NYSE:KO). A prime example of a blue chip stock, Coca-Cola has a strong balance sheet, high margins and a deep economic moat.

It also has a history of rewarding knockout stock investors with a steadily growing dividend. Increasing his earnings 59 years in a row, he is not only a dividend aristocrat, but also a dividend king. Out of thousands of listed companies, only a few dozen belong to this category.

Although up for the year (6.26%), it did not perform as well as some of the other consumer stocks mentioned above and below. Even so, I wouldn’t say it’s likely to provide below-average returns in the future. Besides its dividend (2.79% forecast yield) generating a steady stream of income, modest levels of earnings growth will allow it to achieve higher prices over a long period.

This title gets a “B” rating in my portfolio binder.

Post funds (POST)

Sign of Post Foods Canada Inc. on its factory in Niagara Falls, Ontario, Canada.  Owned by Post Holdings, an American consumer packaged goods company

Source: JHVEPhoto / Shutterstock.com

Best known for its cereal brands, Publish holdings (NYSE:PUBLISH) is also present in other sectors of the packaged food industry. It was also involved in the protein powder and ready-to-drink business, but recently divested that segment, now known as BellRing Brands (NYSE:BRBR).

Although its gross margins were hit by inflationary pressures, rising prices helped the company increase its adjusted EBITDA by 3.7% in the last quarter compared to the year-ago quarter.

With a stable and recession-proof business, the company is able to continue to generate consistent cash flow. It can use this cash flow from operations ($567.9 million over the last twelve months) to make additional new acquisitions that complement its existing business. Or, he could use the money to pay down his $6.3 billion long-term debt. Either option could help create long-term value for investors in POST shares.

This title gets an “A” rating in my portfolio binder.

Pilgrim’s Pride (PPC)

Person holding smartphone with American food company Pilgrim's Pride Corporation logo on screen in front of website.  Focus on phone screen.  Unmodified photo.  PPC action

Source: T.Schneider / Shutterstock.com

A producer of poultry and pork products, high food prices have been a tailwind for Pilgrim’s Pride (NASDAQ:CPC). Inflation and supply shocks resulting from the Russian-Ukrainian war caused ingredient costs to rise, but this company was able to pass those increases on to the consumer.

The result? A big leap in profitability. Earnings last quarter were $1.50 per share, a massive increase from the $68 per share loss in the year-ago quarter. The positive impact of higher prices has been factored into the valuation of PPC shares. It has increased by around 48% over the last twelve months.

Even so, Pilgrim’s Pride is still attractive, both short and long term. Current trends point to continued strong fiscal performance. With its increased cash flow, it can maximize shareholder value. Whether through share buybacks or through the repayment of its long-term debt.

This title gets an “A” rating in my portfolio binder.

Consumer Stocks to Buy and Hold: Hostess Brands (TWNK)

A bundle of two HA bundles of two Hostess Twinkies

Source: LunaseeStudios / Shutterstock.com

Six years ago, after a successful turnaround, Hostess Marks (NASDAQ:TWNK) went public again, via a special purpose acquisition company (SPAC) merger. Shares of the snack food company, famous for its Twinkies brand, have performed well since then, with their price more than doubling.

It’s a company that does well in good times and bad. Perhaps even more so in tough times like these, when his inexpensive comfort foods can be very appealing. This speaks to continued strong operational performance. TWNK shares currently pay no dividends, but that might not be the case forever.

A lack of a dividend is also unlikely to limit its ability to appreciate over time. It could achieve this through steady earnings growth, which will justify a rise in the share price. Attractively priced at 22.8x estimated earnings for 2022, this is another of the long-term plays to consider among consumer stocks.

This title gets an “A” rating in my portfolio binder.

At the date of publication, Louis Navellier had a long position in CALM and PPC. Louis Navellier has held (neither directly nor indirectly) any other position in the securities mentioned in this article. The InvestorPlace research staff member primarily responsible for this article has not held (directly or indirectly) any position in the securities mentioned in this article.

About Scott Bridges

Check Also

PPC Renewables invites tenders for the construction of the largest solar power plant in Greece

PPC Renewables has launched a call for tenders from contractors to build a solar power …