Investors tend not to think of consumer stocks as growth names. These companies often have conservative management, rarely matching the returns of higher-flying growth stocks, and in many cases, pay dividends.
Fortunately, some of these names have a track record of delivering long-term returns and will likely continue to do so. Knowing that, investors can buy these three consumer staples stocks and should earn significant returns by holding them for decades.
Image source: Getty Images.
Constellation Brands
Constellation Brands (STZ 2.56%) is a leading alcohol company that has dealt with internal and external threats. Sales have suffered as consumers across generations have reduced alcohol consumption.
Also, while it distributes America’s No. 1 beer, Modelo, the beer’s ties to Mexico stoked worries about tariff threats. Internally, the company did not foresee the falling consumption patterns and relied too heavily on wine and spirit brands that did not perform well.
However, investors have priced these challenges into the stock, perhaps overly so. That prompted Warren Buffett to invest some of Berkshire Hathaway‘s cash into the stock before he retired, and this was likely a wise decision. Moreover, Constellation has divested some of its underperforming wine and spirit brands.
The divestiture was partially responsible for an 11% sales decline in fiscal 2026 (ended Feb. 28). Nonetheless, it generated $1.8 billion in free cash flow in that fiscal year. That allowed it to repurchase shares and fund its dividend. That payout, which has risen every year since 2015, pays investors $4.12 per share annually, a 2.6% cash return.
Today’s Change
(-2.56%) $-3.96
Current Price
$150.40
Key Data Points
Market Cap
$27B
Day’s Range
$150.22 – $154.42
52wk Range
$126.45 – $196.91
Volume
1.9M
Avg Vol
2.1M
Gross Margin
50.47%
Dividend Yield
2.63%
Furthermore, in fiscal 2027, the company forecasts net sales will remain steady at the midpoint. The stock has also risen 15% since the beginning of the year. Considering its P/E ratio of just 16, one could argue that this Warren Buffett stock is absurdly cheap right now.
PepsiCo
Like Constellation, PepsiCo (PEP 0.64%) provides a unique opportunity to investors as it adapts to evolving consumer tastes. Aside from its flagship cola, Mountain Dew, Gatorade, Doritos, and Quaker Oats are among the products under its umbrella.
In recent years, consumers have become increasingly leery of sugary drinks and processed foods, leading to a reduction in sales. PepsiCo has responded by changing the ingredients in many of its products and buying some brands associated with healthier offerings, such as Siete Foods.
Its recovery is showing some promising signs. In its fiscal first quarter (ended March 21), net revenue grew by nearly 9%, well above the 2% in fiscal 2025. Also, even though free cash flow was negative $406 million in fiscal Q1, it improved from year-ago levels. Investors should note that the free cash flow was nearly $7.7 billion in fiscal 2025.
That cash repurchased shares and supported its dividend, which has increased for 54 straight years. At $4.69 per share annually, it yields almost 3.7%.
Today’s Change
(-0.64%) $-1.00
Current Price
$155.29
Key Data Points
Market Cap
$214B
Day’s Range
$153.48 – $156.49
52wk Range
$127.60 – $171.48
Volume
4M
Avg Vol
7.4M
Gross Margin
54.22%
Dividend Yield
3.64%
Analysts forecast a 5% revenue increase in fiscal 2026, indicating its market pivot is working. Furthermore, its stock has risen by almost 10% this year, and at a P/E ratio of 24, it is likely not too late to invest in a probable recovery in PepsiCo stock.
Kimberly-Clark
Similar to PepsiCo, Kimberly-Clark (KMB 2.38%) has built its business around trusted brands. It owns Kleenex, Huggies, Cottonelle, and others. Also, its upcoming acquisition of Kenvue, which was once the consumer health division of Johnson & Johnson, will place more familiar brands like Tylenol and Listerine under its umbrella.
Over the last year, the stock has suffered amid rising input costs, expenses related to a company restructuring, and the $48.7 billion cost of acquiring Kenvue. In that time, the stock lost more than one-fourth of its value.
Today’s Change
(-2.38%) $-2.34
Current Price
$96.10
Key Data Points
Market Cap
$33B
Day’s Range
$94.95 – $98.72
52wk Range
$92.42 – $144.31
Volume
5.4M
Avg Vol
5.2M
Gross Margin
35.67%
Dividend Yield
5.14%
However, these moves could spark the beginnings of a recovery. In 2025, its net sales fell by 2%. Also, it generated $1.6 billion in free cash flow in that year, down by 35% amid the restructuring.
Share levels remained steady, though it is on track to continue funding the dividend that has risen for 54 consecutive years. At $5.12 per share annually, it yields about 5.1%, enough to pay investors while they wait for a recovery.
Analysts anticipate net sales growth of around 3%. Moreover, its P/E ratio has fallen to 16, a level near multiyear lows. Between that valuation and its high-paying, growing dividend, any positive news could spark a recovery in the stock.
