19 of the best stocks to own in 2023 that are set to produce returns for the next 20 years as consumer favorites, according to Morningstar


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ATU Images/Getty Images This story is available exclusively to Insider subscribers. Become an Insider and start reading now. Goldman Sachs predicts that stocks will flatline next year due to zero earnings growth. One way to ride out a potential recession is to play it safe with defensive stocks.  Morningstar compiled a list of companies they rate as “best” due to their competitive advantages. On Wednesday, the Federal Reserve announced that it would be raising interest rates yet again, this time by 0.5 percentage point.

The hike wasn’t as steep as the last four rounds, which were 0.75 percentage point each. However, the increase threatens to extend the liquidity crunch that has engulfed the stock market over the past year and sent investors fleeing from high-risk assets.

But whether we hit a soft or hard landing, there might not be any rip-roaring bull runs anytime soon. Goldman Sachs predicts that stocks will flatline next year due to zero earnings growth. This means investors may not have much volatility to play off of.

One way to ride out a potential recession is to play it safe. And what better way to do that than to piggyback off the brands that provide necessities such as food, beverages, and household and personal products?

Companies within the consumer defensive sector are somewhat cushioned from economic turmoil because they provide products that are in consistent demand.

Morningstar compiled a list of 19 consumer defensive stocks that they rate as being among the “best companies” to own in 2023. These brands are considered “best” because they have a competitive edge that’s either steady or increasing against other companies in their sector. They also have predictable cash flows and effectively manage and invest their money.

Finally, Morningstar took into consideration companies that have business models that can effectively navigate evolving environmental, social, and governance (ESG) issues, which adds to their longevity.

The firm says it’s confident that these stocks will produce returns that outweigh their costs for the next 20 years.

1. Walmart Inc

Markets Insider Ticker: WMT

Market Cap as of Nov. 30, 2022 ($ million): 411,046.26

2. Procter & Gamble

Markets Insider Ticker: PG

Market Cap as of Nov. 30, 2022 ($ million): 353,463.98

3. Nestle Inc

Markets Insider Ticker: NSRGY

Market Cap as of Nov. 30, 2022 ($ million): 323,595.83

4. Coca-Cola

Markets Insider Ticker: KO

Market Cap as of Nov. 30, 2022 ($ million): 275,082.29

5. PepsiCo

Markets Insider Ticker: PEP

Market Cap as of Nov. 30, 2022 ($ million): 255,578.84

6. Costco Wholesale

Markets Insider Ticker: COST

Market Cap as of Nov. 30, 2022 ($ million): 238,674.29

7. Unilever PLC

Markets Insider Ticker: UL

Market Cap as of Nov. 30, 2022 ($ million): 125,483.23

8. Anheuser-Busch InBev SA/NV

Markets Insider Ticker: BUD

Market Cap as of Nov. 30, 2022 ($ million): 114,733.45

9. Diageo PLC

Markets Insider Ticker: DEO

Market Cap as of Nov. 30, 2022 ($ million): 103,419.90

10. Mondelez International Inc

Markets Insider Ticker: MDLZ

Market Cap as of Nov. 30, 2022 ($ million): 92,329.47

11. Estée Lauder Companies Inc

Markets Insider Ticker: EL

Market Cap as of Nov. 30, 2022 ($ million): 84,132.78

12. Colgate-Palmolive Co

Markets Insider Ticker: CL

Market Cap as of Nov. 30, 2022 ($ million): 64,712.40

13. Reckitt Benckiser Group PLC

Markets Insider Ticker: RBGLY

Market Cap as of Nov. 30, 2022 ($ million): 50,851.68

14. The Hershey Co

Markets Insider Ticker: HSY

Market Cap as of Nov. 30, 2022 ($ million): 48,229.27

15. Ambev SA

Markets Insider Ticker: ABEV

Market Cap as of Nov. 30, 2022 ($ million): 47,542.49

16. Constellation Brands Inc

Markets Insider Ticker: STZ

Market Cap as of Nov. 30, 2022 ($ million): 47,463.88

17. Brown-Forman Corp

Markets Insider Ticker: BF.B

Market Cap as of Nov. 30, 2022 ($ million): 34,980.41

18. McCormick & Co Inc

Markets Insider Ticker: MKC

Market Cap as of Nov. 30, 2022 ($ million): 22,825.10

19. Clorox Co

Markets Insider Ticker: CLX

Market Cap as of Nov. 30, 2022 ($ million): 18,341.15

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