The current market selloff has many investors looking to shore up their portfolios with sturdy stocks that can weather the recessionary storm. Large-cap consumer goods stocks offer an appealing port in stormy waters. They are often mature companies that enjoy durable, routine product demand, modest valuations, and substantial dividends. Their dependability can boost investors’ portfolios and counterbalance more speculative growth stocks during turbulence. Let’s examine three large-cap consumer goods powerhouses, McDonald’s (MCD), Nestle (NSRGY), and Unilever (UL), to see why they may be a good fit for your portfolio in a volatile market.
Case in point: While the S&P 500 (SPX) is down 7.2% over the past month and the Nasdaq (NDX) is down 9.7%, the three stocks we’ll examine here have held up much better than the broader market—McDonald’s is down 3%, Nestle is up 18%, and Unilever is roughly flat over the same period.
McDonald’s (MCD), Nestle (NSRGY), and Unilever (UL) comparison
McDonald’s (NYSE:MCD)
McDonald’s is one of the world’s best-known companies, and its famous golden arches are instantly recognizable worldwide. The company was founded 84 years ago in California. You’ve likely tried its Big Macs, Quarter Pounders, Chicken McNuggets, and its famous fries, and if you’re like me, perhaps more than you’d care to admit! Today, McDonald’s is the world’s largest food service retailer, with a whopping 38,000 locations spanning 100 countries. The fast food juggernaut now has a nearly $220 billion market cap.
What I like about McDonald’s is that it offers its customers good value. While consumers may cut back on eating out at fast-casual restaurants and higher-end restaurants during the current climate, McDonald’s gives them a good bang for their buck with its popular $5 and $6 value meals, making it an appealing alternative for cautious consumers looking for a cheap but reliable lunch.
McDonald’s (MCD) comparison with S&P 500 (SPY)
As a longtime blue-chip stock and member of the Dow Jones Industrial Average, McDonald’s shares have never been dirt cheap. Still, they trade at a reasonable valuation of just below 25x 2025 earnings estimates. This means McDonald’s trades at a slightly above-market multiple, as the S&P 500 trades for about 21x forward earnings estimates amid the recent downturn. Therefore, McDonald’s stock is not particularly cheap, but it certainly doesn’t trade at an egregiously high level compared to the broader market.
While McDonald’s is perhaps a middling-value stock, it is a strong dividend growth stock. McDonald’s is a consistent dividend payer that has paid a dividend and grown the size of this payout for 23 years in a row. Shares currently yield 2.3%, significantly higher than the S&P 500’s yield of 1.3%.
Is McDonald’s Stock a Good Buy?
MCD earns a Moderate Buy consensus rating based on 14 Buys, 10 Holds, and zero Sell ratings assigned in the past three months. The average analyst MCD stock price target of $327.52 implies a 9.4% upside potential from current levels.
Switzerland’s Nestle (NSRGY) is another massive global consumer goods company with an even larger market cap than McDonald’s, clocking in at ~$258 billion. Nestle started in 1866, so this titan has stood the test of time.
The sprawling company’s product lines include cereal, chocolate, coffee, dairy, water, snack foods, pet food, and beyond. Some of its best-known brands include Cheerios, Gerber, Haagen-Dazs, Kit Kat, Nescafe, Nespresso, Nesquick, and Perrier. Regardless of what’s happening in the stock market or the broader company, these are the types of products consumers will continue to pick up on a routine basis.
Nestle features a dividend yield of 2%, around the same as McDonald’s and the broader market. While Nestle has a long and consistent history of paying dividends that go back 34 years, the company only has one year of dividend growth under its belt right now after it decreased its payout from 2023 to 2024 before increasing it for 2025. Note that, like many international stocks, Nestle pays out its dividend annually, unlike the quarterly basis on which McDonald’s and many U.S. dividend stocks pay out.
Is Nestlé Stock a Good Buy Now?
NSRGY earns a Hold consensus rating based on zero Buys, one Hold, and zero Sell ratings assigned in the past three months. The average analyst NSRGY stock price target of $99.00 implies a 2% downside potential from current levels.
Like Nestle, Unilever (UL) is another massive consumer products juggernaut from Europe. U.K.-based Unilever is similar to Nestle in that it is home to several well-known consumer brands, housing 31 in total, including food and ice cream brands. Still, it is more diverse than Nestle in that it also features personal care, home care, and personal care products.
Unilever (UL) comparison with S&P 500 (SPY)
Some of Unilever’s most widely-recognized brands include Axe deodorant, Ben & Jerry’s ice cream, Dove, Nutrafol, TRESemme, and Vaseline. Customers will continue to buy personal care and beauty products (not to mention ice cream and mayonnaise) even in a tough economy, putting Unilever in a good position to weather economic uncertainty. Shares of Unilever are the cheapest in this comparison, trading at 17.4x forward earnings estimates.
On dividends, Unilever yields 3.1%, higher than McDonald’s and the broader market, although the difference is negligible. Although Unilever’s dividend doesn’t have the same longevity as McDonald’s or Nestle, it has paid a dividend for 14 consecutive years and increased the size of its payout for the last two years in a row. While Unilever is a foreign company, its U.S.-listed shares pay out dividends on the quarterly basis that U.S. dividend investors are accustomed to.
Is Unilever a Buy or Sell?
UL earned a Strong Buy consensus rating based on four Buys, zero Holds, and zero Sell ratings in the past three months. The average analyst UL stock price target of $70 implies an 18.6% upside potential from current levels.
I like all three mega-cap consumer goods stocks because they all feature longstanding, durable businesses that have proved commercial reliability over many years. They all sell the types of products that consumers will continue to buy even in an uncertain economic environment. All three also feature reasonable valuations and attractive dividends.
McDonald’s is a long-term winner, but the stock is more expensive than the broader market and its peers in this comparison. Not only that, but its yield is lower than Nestle and Unilever’s, taking it out of the running here.
I like Unilever slightly better than Nestle based on its somewhat lower valuation, and its dividend yield roughly aligns with Nestle’s. Plus, sell-side analysts rate Unilever as a strong buy and see an attractive upside of almost 20% over the next 12 months, while they rate Nestle as a hold and don’t see tangible upside potential, further sealing the deal for Unilever.
All three stocks can serve investors as recession-proof safe havens in the economic storm, with Unilever looking the most attractive.
