After Costco's Surge, Here Are the 3 Best S&P 500 Stocks to Buy Now

Costco Wholesale stock surged out of the gate in 2026, with the shares currently up about 17% year to date. It has benefited from investors' desire for more defensive consumer goods stocks amid caution around heavy technology spending and the broader economy.

But the downside to buying Costco stock right now is its high valuation, trading at 49 times forward earnings. Investors can find other quality, resilient consumer goods companies with solid growth prospects at much lower valuations. Here are three other S&P 500 consumer goods stocks to consider.

Coca-Cola

Coca-Cola (NYSE: KO) offers similar defensive qualities and durable business advantages at a significantly lower valuation than Costco. The stock is up 7% year to date and offers an attractive combination of steady sales and a solid dividend yield.

Coca-Cola's retail relationships and the events where it markets its brands create many opportunities to generate sales. People consume an estimated 2.2 billion servings of Coke's products every day. Top brands like Diet Coke, Sprite, Fanta, and Powerade help fuel a $48 billion-per-year beverage empire.

About 85% of annual sales come from concentrate syrups, with packaged products accounting for 15%. This mix has shifted toward syrups over the last decade, reflecting management's strategy to drive higher margins and move away from capital-intensive products.

Last year, Coca-Cola posted $13 billion in net income, representing a profit margin of 27%. For 2026, management guided for around 4% to 5% organic revenue growth and 7% to 8% earnings growth, suggesting further margin expansion ahead.

Coca-Cola is rightly named a Dividend King, a title reserved for any company that has raised its annual dividend for at least 50 consecutive years. The company has increased its dividend for 64 straight years and currently offers a forward yield of 2.8%, supported by a payout ratio of about 67%. It looks like a solid buy, trading at a forward price-to-earnings (P/E) multiple of 23.

Dollar General

Dollar General (NYSE: DG) is another resilient S&P 500 consumer goods company with an attractive valuation. This dollar store stock suffered a major drawdown a few years ago, but that created an excellent buying opportunity. The company has posted consistent same-store sales growth over the last 36 years. Since 1990, the only negative year was 2021.

The business has a strong advantage serving rural America with everyday essentials at value prices. It operates about 21,000 stores that reach roughly 75% of the U.S. population. Last year, this translated to $42 billion in sales, with same-store sales growth of 3% -- consistent with its historical average.

Management has been investing in improving the business. New store formats, remodel programs, and expansion into non-consumable products like toys and apparel are driving higher sales.

The stock trades at a forward price-to-earnings (P/E) of 17 with an above-average dividend yield of 1.90%, supported by a 34% payout ratio. The company's durable moat in rural markets and progress on growth initiatives should make it a solid long-term holding.

The TJX Companies

The TJX Companies (NYSE: TJX) is a value-based retailer that also offers relatively good value compared to Costco. It creates a treasure-hunt atmosphere by sourcing from thousands of vendors worldwide. Customers are drawn to big discounts on name-brand merchandise, and the business still has a long runway ahead.

TJX has over 5,200 stores in nine countries. It turns inventory quickly, making it resilient during tough economic times. Despite choppy consumer spending over the past few years, same-store sales growth has ranged between 4% and 5% across its stores, including TJ Maxx, Marshalls, and HomeGoods.

Management is encouraged by recent customer responses to the assortment of merchandise and the values it has been able to secure. This is already a large business with over $60 billion in annual sales, but management sees significant global expansion ahead, targeting more than 7,000 stores.

Consumers love a good deal, and few do it better than TJX. The stock trades at 31 times this year's earnings. It's an excellent alternative for investors seeking other quality consumer goods stocks that rival Costco's resiliency at lower valuations.

John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and TJX Companies. The Motley Fool has a disclosure policy.