Add a Margin of Safety With 3 Consumer Staples Stocks

Are you looking for stocks that could give your portfolio a margin of safety? Buy these three consumer staples stocks!

The stock market has been very volatile over the past couple of years. Because of that, many investors have been looking for stocks that could provide some stability to their portfolios. That’s where consumer staples stocks come in.

These companies tend to be relatively steady in their gains and losses. That’s because the businesses associated with consumer staples stocks tend to be relied on, regardless of what the economy looks like. These stocks could be food producers, grocery companies, corner stores, etc. In this article, I’ll discuss three consumer staples stocks worth buying today!

This stock is an excellent dividend company

Alimentation Couche-Tard (TSX: ATD) is the first consumer staples stock that investors should consider buying today. If you’re not from Quebec, you may recognize this company as Mac’s. Newer investors that haven’t had the opportunity to dive deeply into this company may not know how large Alimentation-Couche Tard actually is. This company operates under several other names including On the Run, Circle K, Daisy Mart, and more. All considered, Alimentation Couche-Tard operates more than 14,000 locations across 24 countries and territories.

Listed as a Canadian Dividend Aristocrat, Alimentation Couche-Tard has managed to increase its dividend for more than a decade. Its current payout ratio is 12.3%, which suggests that the company has a lot of room to continue comfortably raising its dividend in the future. In terms of stock performance, Alimentation Couche-Tard has been exceptional, gaining about 283% over the past five years. Whether you look at it from a dividend or growth point of view, Alimentation Couche-Tard is a solid stock to buy today.

Investors should be buying this stock today

Metro (TSX: MRU) is the second stock that investors should consider buying today. Grocery companies are very good stocks to hold in a portfolio, because consumers will continue to buy food, even if we go through a recession. That makes these businesses very stable and reliable, should the economic conditions change for the worst. Metro is the third-largest grocer in Canada, operating 975 grocery stores and 645 drugstores across the country.

Like Alimentation Couche-Tard, Metro is an exceptional dividend stock. The company holds a 26-year dividend-growth streak. That makes it one of only 11 TSX-listed companies to maintain a dividend-growth streak of 25 years or more. Over the past five years, Metro stock has gained about 66%. While that performance is a lot more modest than that of Alimentation Couche-Tard, it still outperforms many growth stocks, considering the huge drop in value that they’ve experienced recently.

A company you should recognize

Finally, investors should consider buying shares of Maple Leaf Foods (TSX: MFI). This is a packaged meats producer, which consumers should be very familiar with. Admittedly, this isn’t a company I tend to cover on the Motley Fool; however, for this sort of article, I think Maple Leaf Foods is an excellent stock to consider. Maple Leaf Foods operates a large portfolio which includes the likes of Maple Leaf, Schneiders, Holiday, Cappola, and more.

In the fourth quarter of 2022, the company reported a 6% year-over-year increase in sales. That was achieved even with 10-year lows in market conditions. I find that performance to be very impressive. Looking at its dividend, investors can note that Maple Leaf Foods is also listed as a Canadian Dividend Aristocrat. Today, this stock offers investors a forward dividend yield of 3.62%.

Fool contributor Jed Lloren has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alimentation Couche-Tard. The Motley Fool has a disclosure policy.

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