Fundamentally, the bullish case for acquiring stalwart stocks is a simple one. It’s effectively Wall Street’s version of befriending the biggest, meanest schoolyard bully.
We’ve all been in this situation before. As kids, we typically grow at a similar rate to our classmates. However, some kids are built differently, like they’re destined to play middle linebacker for the Dallas Cowboys. You don’t mess with these giants. In turn, by being their friend, people tend to not mess with you either.
Now, it doesn’t mean you can go around with impunity and mess with other kids. But befriending the bully gives you a certain level of confidence that whatever happens at school, you’ve got someone that can take care of business.
It’s the same thing on Wall Street. These ideas probably won’t make you rich. But they should help you avoid being poor. On that note, below are intriguing stalwart stocks to buy and hold through any storm.
Procter & Gamble (PG)
When it comes to stalwart stocks, you gotta go with Procter & Gamble (NYSE:PG). A consumer goods giant, the company benefits from a key fundamental reality. Regardless of market and/or economic conditions, people need to take showers, brush their teeth and wash their clothes, among many other activities.
Yes, you can go the discount route but in the end, you get what you pay for. And certain products – like toilet paper – present “issues” when you go to the bottom of the barrel. In that sense, the value-per-dollar proposition favors a common brand like P&G.
True, PG isn’t the most exciting play among stalwart stocks. However, what I do appreciate is the consistent growth trajectory. In the fiscal year ended June 2023, P&G posted just over $82 billion in revenue. Analysts on average anticipate 2024 and 2025 revenue to hit $84.74 billion and $88.06 billion, respectively.
Lastly, the company pays a solid forward dividend yield of 2.34%. Also, the payout has been increasing for the past 68 years, making PG one of the premiere stalwart stocks to buy.
Kroger (KR)
In my opinion, the case for Kroger (NYSE:KR) as one of the stalwart stocks sells itself. As a grocery store giant, Kroger benefits from permanent relevance. You see, it effectively balances the price-and-quality ratio. For families looking to save, they can easily cut out food deliveries or going out to restaurants. Instead, they can cook at home and Kroger provides the ingredients they need at reasonable prices.
Right now, KR stock trades at a forward earnings multiple of 11.21X, below the sector median 17.56X. I’m not sure how long this discount will last. When looking at the high-side analyst estimate, Kroger may deliver earnings per share of $4.60 in the current year and $4.72 in 2025. I believe the more optimistic range is accurate simply because of economic realities.
Yes, circumstances appear to be steamrolling ahead thanks to a robust GDP print and recent jobs performances. However, American households have also struggled for years with high inflation and high interest rates. Something’s got to give – but that giving probably won’t happen in the grocery aisle.
People have to eat and that makes KR one of the top stalwart stocks.
Coca-Cola (KO)
Easily ranking among the best stalwart stocks to buy, Coca-Cola (NYSE:KO) enjoys a key fundamental catalyst: the namesake product is a cheap pick-me-up. Moving forward, if the economy doesn’t perform so well, I anticipate the soft-drink giant to benefit from the trade-down effect. In other words, look for consumers to trade down from expensive coffeeshop visits to buying Coca-Cola caffeinated products.
Analysts see good things ahead for KO stock. On average, they estimate that current year sales will eventually land at $45.77 billion. At the end of next year, sales should be just over $48 billion. However, I believe in the high-side estimates here: $46.5 billion in 2024 and $48.78 billion in 2025.
As I mentioned earlier, Coca-Cola should represent a beneficiary of the trade-down effect. While I understand that consumers may be enjoying a robust labor market, that circumstance might not last indefinitely.
Also, analysts rate KO a moderate buy with a $65.80 average price target. Combined with a forward dividend yield of 3.17% – with a payout increase track record of 63 years – Coca-Cola makes the cut for stalwart stocks to buy.
Meta Platforms (META)
To be quite blunt, Meta Platforms (NASDAQ:META) ordinarily isn’t a name you find listed among prospective stalwart stocks. Don’t get me wrong – it’s a massive technology power player. However, META represented more of a capital gains story. However, with the company announcing a dividend for the first time in its history, the narrative has shifted.
Fundamentally, the company benefits from its data goldmine. Yes, there are other social media platforms. None have the footprint and influence and demographic diversity (as in age group) of Meta’s Facebook. In addition, the company is expanding into many other relevant tech subsectors. Personally, I’m unsure about this whole metaverse deal. But the accoutrements – such as virtual reality headsets – is likely to be a longstanding winner.
Last year, Meta posted sales of $134.9 billion. Looking ahead, analysts anticipate on average that the company will print $158.21 billion in revenue this year. And the following, they believe $177.95 billion is realistic.
It’s hard to disagree given how influential Meta is. With an overall strong buy consensus view with a $529 price target, META is a top-tier candidate for stalwart stocks.
Exelon (EXC)
A public utility firm headquartered in Chicago, Illinois, Exelon (NASDAQ:EXC) makes a compelling argument for stalwart stocks. As I’ve mentioned many times before, utilities enjoy a natural monopoly. Even if competitive sentiment existed, such feelings become quickly dashed as would-be rivals realize the enormous barriers to entry. From the business expenses themselves to steep regulatory pressures, it’s difficult to move into the space.
Cynically, that makes companies like Exelon entrenched. I don’t know what to say – it is what it is. When you’re looking for stalwart stocks for possible market headwinds, going the cynical route can be effective. Now, to be fair, EXC hasn’t had a great time in the market. One look at its 52-week chart tells you what you need to know.
If that wasn’t painful enough, analysts on average see revenue declines in 2024 and 2025. However, the high-side estimate calls for modest growth and that appears to be more accurate. Either way, the strength of Exelon lies in its consistent profitability. And that translates to its generous forward dividend yield of 4.21%.
Analysts also rate EXC a moderate buy with a $41 price target. Given its permanent relevance, it should be a trustworthy name.
Microsoft (MSFT)
A company that’s been in the news thanks to its investment in artificial intelligence, Microsoft (NASDAQ:MSFT) seems like it just can’t miss. To be upfront, I’m beginning to get skeptical about the enormous interest in AI. There’s so much talk about how the machines are taking over and that we may not have jobs anymore.
Don’t worry. Generative AI protocols are so error prone that they’re effectively useless. There is simply no way that AI can take over people’s jobs unless these jobs are constrained into specific, predictable functions. If you have a dynamic occupation, forget about it.
Having said that, investors and enterprises will continue pouring resources into AI. Combined with Microsoft’s dominance in business software and PC operating systems, analysts on average are looking for the company to ring up sales of $244.26 billion in 2024 and $279.24 billion in 2025.
That’s a big leap from the company’s fiscal 2023 sales performance of $211.92 billion. Still, with AI mania in full bloom, it seems a solid bet for stalwart stocks.
ConocoPhillips (COP)
At first glance, ConocoPhillips (NYSE:COP) might not seem an endearing idea for stalwart stocks. It is a stalwart to be sure. However, the company’s core business centers on hydrocarbon exploration and production. An upstream player in the fossil fuel industry clashes with the green ideology of renewable energy infrastructures. But one look at the stranded EV drivers in some of the coldest areas in the nation might have you rethinking this concept.
I’m not saying that electric vehicles are a scam or anything like that. However, I think it would be rash to label big oil as an obsolete sector. Given the tremendous energy density found in fossil fuels, it’s way too early to write off names like ConocoPhillips. Not only that, analysts see no reason to abandon a viable ship.
Last year, the company posted revenue of $56.14 billion. Wall Street experts believe that at the end of 2024, ConocoPhillips will ring up $58.96 billion in revenue. One year later, they’re looking at a haul of just over $61 billion.
Armed with a strong buy consensus view and a forward yield of 2.08%, COP may be one of the more balanced ideas for stalwart stocks.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
