Top 2 Consumer Staples Stocks Worth Buying and Keeping for the Long Term

Why Consumer Staples Are a Safe Bet

Companies in the consumer staples sector offer products that people purchase regardless of the economic climate, making them reliable choices during periods of uncertainty. With ongoing economic worries and geopolitical tensions, especially in the Middle East, it may be wise to prioritize stability. This is why shares of Coca-Cola (NYSE: KO) and Procter & Gamble (NYSE: PG) could be excellent additions to your investment portfolio.

Dividend Kings in the Consumer Staples Sector

Coca-Cola stands as the leading global producer of non-alcoholic beverages, with a vast array of well-known brands beyond its flagship soda. Similarly, Procter & Gamble is a giant in the consumer staples industry, offering everything from personal care to household essentials. What truly sets these companies apart is their status as Dividend Kings.

What Makes a Dividend King?

To achieve the prestigious title of Dividend King, a company must raise its dividend every year for at least half a century. This accomplishment is only possible for businesses with robust strategies that can weather both prosperous and challenging times. It also demonstrates a long-term commitment to rewarding shareholders through consistent dividend growth.

Both Coca-Cola and Procter & Gamble have demonstrated their ability to thrive through various market cycles. Currently, Coca-Cola offers a dividend yield of 2.6%, while Procter & Gamble provides a yield of 2.8%. For context, the S&P 500 index (SNPINDEX: ^GSPC) yields about 1.1%.

Valuation: Are Coca-Cola and P&G a Bargain?

Top-tier companies like Coca-Cola and Procter & Gamble rarely trade at discounted prices. However, even purchasing at fair value can be rewarding if you plan to hold for many years. Procter & Gamble's price-to-sales, price-to-earnings, and price-to-book ratios are all below their five-year averages. Coca-Cola's P/E and P/B ratios are also under their historical norms, with its P/S ratio only slightly above average. This suggests both stocks are attractively valued, if not outright cheap.

The key takeaway is that when investing for the long term, both quality and price matter. Right now, Coca-Cola and Procter & Gamble offer exceptional quality at reasonable prices, along with dividend yields that surpass the broader market.

Should You Add These Dividend Kings to Your Portfolio?

If you’re concerned about market volatility, economic uncertainty, or global conflicts, this could be an ideal moment to consider adding consumer staples Dividend Kings like Coca-Cola and Procter & Gamble to your dividend-focused portfolio.

Is Now the Right Time to Buy Coca-Cola?

Before making a decision to invest in Coca-Cola, keep this in mind:

• The Motley Fool Stock Advisor team has recently identified what they believe are the 10 best stocks to buy right now—and Coca-Cola didn’t make the list. The selected stocks have the potential to deliver substantial returns in the years ahead.
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