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Grocery stocks are not immune to recessions but they have proved fairly resilient, as consumers have to visit grocery stores even under the most adverse economic conditions. Grocery stocks are generally profitable businesses that also pay dividends to shareholders.
This article will discuss 3 of our top grocery stocks ranked in order of expected total returns. These companies have proved fairly resilient to recessions and offer reliable dividends, with yields well above the S&P 500 average.
1. Kroger Co. (KR)
Kroger is one of the largest retailers in the U.S. with approximately 2,700 retail stores under two dozen banners, along with fuel centers, pharmacies, and jewelry stores in 35 states. The company serves more than 11 million customers a day.
On September 11th, 2025, Kroger reported second quarter 2025 results for the period ending August 16th, 2025 (Kroger’s fiscal year ends the Saturday closest to January 31st.)
For the quarter, Kroger reported $33.9 billion in sales, which was identical to Q2 2024. Excluding its specialty pharmacy business, and fuel, sales increased 3.8% compared to the year ago. Adjusted earnings-per-share equaled $1.04 compared to $0.93 in 2Q24.
In the last nine and five years, Kroger increased its EPS at 9.0% and 15.3% CAGR, respectively. This is a strong track record of growth. Although the large scale and reach of Kroger offers some economies of scale, competition has heated up more than ever in the retail sector. Still, while most companies saw their earnings collapse during the Great Recession, Kroger exhibited exceptional resilience.
Kroger also has a healthy balance sheet. At the end of the most recent quarter, Kroger held $4.9 billion in cash and temporary cash investments, $15.8 billion in current assets (43% of which is inventory) and $53.6 billion in total assets against $16.7 billion in current liabilities and $44.3 billion in total liabilities. Net total debt stood at $13.3 billion.
KR has increased its dividend for 18 consecutive years and currently yields 2.2%.
2. Albertsons Corporation (ACI)
Albertsons is one of the largest food and drug retailers in the United States. With more than $80 billion in annual sales, and a history dating back to the 1860s, the company went public in 2020 and has paid a quarterly dividend ever since.
On October 14th, ACI shared its financial results for its fiscal second quarter 2025 ended September 6th, 2025. Net sales grew by 2% over the year-ago period to $18.9 billion during the quarter. As has been the case in past quarters, ACI’s topline growth was powered by greater digital engagement via its “Customers for Life” strategy and growth in loyalty members.
Digital sales climbed 23% higher, and loyalty members jumped 13% to 48.7 million for the quarter. Diluted EPS surged 20% higher over the year-ago period to $0.30 during the quarter. Moving forward, ACI believes that it can drive 2%+ annual identical sales growth (excluding fuel sales) with its investments in growing the loyalty program and expanding its digital sales mix. As these investments begin to yield results, the company could see incremental margin expansion.
Share buybacks will also help boost the company’s earnings-per-share growth. ACI just announced a $750 million accelerated share repurchase agreement (~7% of the current market cap). This increases the board-authorized share repurchase program from $2 billion to $2.75 billion. The transactions under the ASR agreement are expected to be completed by Q1 2026. ACI can fund these purchases with its substantial free cash flow.
ACI’s dividend is well-covered, with the payout ratio expected to be in the low 30% range for FY 2025. ACI stock currently yields 3.5%.
3. Dollar General (DG)
Dollar General Corporation opened its first dollar store in 1955. Today, it is the leading U.S. “dollar store”. About 80% of its items are offered at $5 or less.
Dollar General sells a wide variety of merchandise in four categories: consumables, seasonal, home products, and apparel. About 77% of sales are from consumables. Dollar General operated 20,901 stores as of December 4, 2025. Most stores are located in towns with 20,000 or fewer people and are about 7,400 sq. ft. Total sales were $40.6B in FY 2024.
Dollar General reported Q3 FY2025 results on December 4th, 2025. Net sales increased 4.6% to $10,649M from $10,183M on a year-over-year basis as same-store sales grew 2.5% on more customer traffic and store openings, offset by store closures. The average transaction was flat. Diluted earnings per share increased 43.8% to $1.28 from $0.89 in the prior year on greater revenue, higher margins, and lower interest expense.
All four categories increased sales: consumables (+4.5%), seasonal (+5.5%), home products (+5.4%), and apparel (+2.4%). The return of the prior CEO and the Back-to-Basics effort have resulted in renewed focus, positive same-store sales, and much improved operating results, returning Dollar General to growth.
With its recent momentum, Dollar General raised guidance to about 4.7% to 4.9% sales growth and same-store sales growth of 2.5% to 2.7%, and diluted EPS of $6.30 to $6.50 in fiscal 2025.
Dollar General’s top line continues to grow due to organic sales increases and new store openings. The company is investing heavily in growth and is expecting capital expenditures up to $1.3B to $1.4B in fiscal 2025.
The company expects to open 585 new stores, remodel 2,000 stores and relocate 45 stores in fiscal 2025. Dollar General is expanding into Washington, Wyoming, and Mexico.
Dollar General’s main competitive advantage is its industry positioning, small store formats and location in small towns. Dollar General benefits from lower distribution costs due to the small store format and lower number of stocked items. Furthermore, the lower average transaction cost limits competition from online retailers. DG stock currently yields 1.8%.
Get the complete list of Top Grocery Stocks here
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Disclosure: No positions in any stocks mentioned