3 Grocery Stocks to Fill Your Cart With Steady Gains

Core Insights - The grocery sector is highlighted as a defensive investment, providing stability during market volatility, with consistent sales growth even amid economic uncertainty [1] Industry Overview - The food and grocery retail market experienced a 5.3% compound annual growth rate (CAGR) from 2019 to 2023, driven by changing consumer preferences, population growth, and new shopping habits [2] - U.S. online grocery sales reached $8.5 billion in April, marking a 4% increase from the previous year [2] - The global grocery market is projected to grow from $12.4 trillion in 2024 to over $17 trillion by 2034 [2] Company Analysis: BJ's Wholesale Club (BJ) - BJ's Wholesale Club reported a 4.1% year-over-year revenue increase to $4.9 billion, with comparable club sales up 1.6% and e-commerce sales surging 21% [4] - The company plans to open 12 new clubs in 2024, primarily on the East Coast, and has expanded into gas stations to enhance revenue [5] - BJ's focus on e-commerce and digital platform investment positions it well for future growth in the online grocery market [6] - BJ's stock has increased 32% year-to-date, trading at 22.5 times forward earnings and 0.6 times sales [7] Company Analysis: Walmart (WMT) - Walmart reported total revenues of $161.51 billion in the first quarter of fiscal 2025, with significant contributions from Walmart U.S. ($108.67 billion) and Walmart International ($29.83 billion) [9] - The company's gross profit margin was 24.5%, and net profit margin stood at 2.88%, with adjusted EPS reflecting a 22.4% year-over-year growth [9] - Walmart launched Walmart Luminate, a data analytics platform aimed at enhancing supply chain efficiency and driving sales growth [10] - Walmart's stock has advanced 24% year-to-date, trading at 27.8 times forward earnings and 0.8 times sales, with a 12-month median price forecast suggesting a 7% upside potential [11] Company Analysis: iShares U.S. Consumer Goods ETF (IYK) - IYK provides broad exposure to the U.S. consumer staples sector, including food and household items, with net assets of $1.3 billion [12][13] - The ETF is diversified, with 57% of its investments in Food, Beverage, and Tobacco, and top holdings include Procter & Gamble, PepsiCo, and Coca-Cola [13][14] - IYK has gained over 4% since January, trading at 21 times trailing earnings and four times book value, with a dividend yield of 2.6% [15]