3 of the Best Consumer Staples Stocks in 2026
Key Points
Philip Morris is a solid grower in a defensive industry.
Coca-Cola has a great business model and is starting to see volumes pick up.
Chewy is a great margin expansion story.
If you're looking for steady businesses that are recession-resistant and compound over time, the consumer staples sector is a great place to invest. The stocks in this sector may not grab headlines like tech and artificial intelligence (AI) stocks, but there are a lot of solid businesses in this space that solidly grow over time.
Let's look at three top consumer staples stocks to buy in the sector.
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1. Philip Morris International: A solid growth story in a defensive industry
If you're looking for a stock in a defensive industry with solid growth, Philip Morris International (NYSE: PM) is a top contender to consider. While its cigarette volumes are declining, they are decreasing at a much slower pace than its rivals that sell into the U.S. market. Meanwhile, it continues to have strong pricing power, which is lifting sales.
At the same time, its smoke-free portfolio continues to be a growth driver. Its Iqos heated-tobacco units were a standout last quarter, with 11% adjusted in-market sales growth, while its Zyn nicotine pouches saw a 10% increase in offtake volumes in the U.S. in Q1. Both products also carry better unit economics than traditional cigarettes. The company also has future growth opportunities as it awaits the authorization of Zyn Ultra and Iqos Iluma in the U.S.
Overall, Philip Morris is a solid company looking to grow its organic revenue by between 5% and 7% this year, with currency-neutral EPS growth of between 7.5% and 9.5%. It currently trades at an attractive valuation, with a forward P/E of below 20 times.
Image source: Getty Images.
2. Coca-Cola: An iconic brand with a great business model
A long-term favorite of investing great Warren Buffett, Coca-Cola (NYSE: KO) has one of the best business models in the consumer space. While known for its ubiquitous cola and other soda brands, in many cases, Coca-Cola doesn't actually make the soda; it sells the syrup to make the soda. Instead, it leaves the capital-intensive part of the business to regional bottlers.
The company has some of the best brand equity in the world, built over the years through its global marketing campaigns. That has helped give it solid pricing power, but more recently, it has seen a resurgence in volumes as soda has regained popularity due to the introduction of zero-calorie offerings, prebiotic options, and the dirty soda (sodas with syrups and creamers added) phenomenon.
In Q1, the company saw 10% organic revenue growth, as its concentrate sales climbed 8%. It is projecting 4% to 5% organic revenue growth for the year, with 8% to 9% EPS growth. The stock currently trades at a forward P/E of 24 times, in line with its recent historical averages. With volumes picking up, now is a great time to buy the stock.
3. Chewy: An attractive margin expansion story
Another great company in the consumer staple space is online pet retailer Chewy (NYSE: CHWY). The company has one of the most attractive business models in e-commerce, with the bulk of its sales coming from pet food and other pet necessities autoshipped to its customers. This creates a highly valuable recurring revenue stream.
At the same time, the company is working to continue to improve its margins, with several initiatives underway. This includes leaning into areas with high gross margins, such as private label and pet pharmacy, as well as its sponsored ad business and new paid subscription membership. It's also continuing to ramp up its newest state-of-the-art fulfillment center in Houston and looking to drive efficiencies with AI.
The company grew its revenue on a normalized 52-week basis last year by 8.3% and saw its earnings before interest, taxes, depreciation, and amortization (EBITDA) margins increase 90 basis points to 5.7%. It projected its EBITDA margins to expand by another 100 basis points this year and has a long-term goal of them reaching 10%. That would translate to some strong profitability growth from here.
The stock currently trades at a forward P/E of just 16 times, making it a great bargain buy.
Geoffrey Seiler has positions in Chewy and Philip Morris International. The Motley Fool has positions in and recommends Chewy. The Motley Fool recommends Philip Morris International. The Motley Fool has a disclosure policy.