3 Defensive Consumer Stocks Worth Shopping For The utility, healthcare, and consumer staples sectors have all been good places to find outperformers. They will likely continue to be if the near-term economic outlook remains grim.

With the stock market lacking offensive firepower this year, it has been a good time to be on the defensive—as in defensive sectors.

Soaring oil prices have jettisoned the energy sector to the front of the pack in 2022 but other non-cyclical groups have fared relatively well too. The utility, healthcare, and consumer staples sectors have all been good places to find outperformers. They will likely continue to be if the near-term economic outlook remains grim.

Food, beverages, and household essentials companies make for good investments when the economy shows signs of deterioration because they sell items we can't go without. While discretionary purchases like clothing, electronics, and trips get eliminated from budgets, groceries and toiletries stay.

With this said, there are still plenty of consumer defensive stocks that are down year-to-date with escalating materials and transportation costs impacting bottom lines for most of corporate America. Others are up but have pulled back in recent weeks.

Looking at the entire large-cap staples group, here are three stocks that investors should consider tossing in the cart.

What is a Good Defensive Stock?

Constellation Brands, Inc. (NYSE: STZ) is the company behind some of the world's best-known beer, wine, and spirits brands. While the essential nature of these items is debatable, historically consumers purchase alcoholic beverages on a fairly regular basis regardless of the economic environment.

The bar and restaurant demand that Constellation Brands lacked during the pandemic is coming back online while at the same time at-home consumption trends have proven resilient. Last quarter the company grew sales 8%, driven by the beer category where demand from retailers was strong.

Yet it is Constellation's expanding operating margins that make it stand out from the crowd. At a time when most consumer-facing companies are grappling with expenses and pricing decisions, Constellation's operating leverage is leading profits higher. This helped it top the consensus EPS estimate for the 10th straight quarter.

The stock has retreated 9% from its record peak creating a better entry point. Home consumption trends are favorable and restaurants are serving more Coronas these days. Constellation shareholders will continue to be in good spirits.

Is the Kroger Stock Pullback a Buy Opportunity?

Grocery store operators are safe bets for the current environment and The Kroger Co. (NYSE: KR) belongs at the top of the shopping list. It operates nearly 3,000 supermarkets under banners like Kroger, King Scoopers, Ralphs, Harris Teeter, and more.

At the midpoint, management is calling for EPS of $3.80 in the current fiscal year. This translates to a 13x forward P/E for a stock that has corrected 20% since April. So with the profit forecast and business fundamentals unchanged since the company's March 3rd guidance, it is a good time to pounce.

Kroger is firing on all cylinders these days. Sales are growing beyond what they were at the height of the pandemic which means shelves are being stocked and customers are still buying. Of course with grocery prices inflated like everything else, shoppers are paying more. This exemplifies why grocery stores do well during tough times. Whether prices are up or down, people still have to eat. They may buy a little less or rotate to store brands, but overall spending patterns stay consistent.

This brings us to Kroger's private label brands. The company has been growing its assortment of private brands to improve margins. The move couldn't have come at a better time with shoppers now seeking more affordable substitutes to pricey national brands. Kroger-owned brands encompass more than 10,000 items across the fresh foods, pets, baby, and home & office categories. They are becoming a bigger part of the overall sales mix and driving higher profits.

This combined with a robust digital business should drive further growth and market share gains for Kroger. It is a model of success that will continue to work well in the supermarket space.

Is Coca-Cola a Good Stock to Own?

It doesn't get much more defensive than The Coca-Cola Company (NYSE: KO). The soft drink maker has been quenching thirst since 1892 and in the process has seen plenty of ups and downs.

The Coca-Cola of today looks very different from a portfolio standpoint with brands like Gold Peak tea, VitaminWater, Powerade, and Monster now in the fold. But in many ways it is the same old Warren Buffet-supported company serving up steady growth in good times and bad.

The global (non-alcoholic) beverage industry is expected to grow 4% to 5% annually through 2025. This isn't much compared to highflying technology industries but it gets more interesting when you look under the lid.

Much of the growth will come from emerging markets like China, India, and Brazil which make up the vast majority of the world population. Energy drinks are also expected to grow faster than the overall industry. These themes combined with the single-digit growth anticipated in soda, water, juices, and sports drinks make for a well-diversified growth story an investor can depend on.

Coca-Cola shares are up 6% year-to-date while the Dow is down 13%. They won't generate monster gains anytime soon but will help you sleep better at night. Just don't consume an energy drink before bed.