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Recession-proof stocks
Is now the time to run for cover? If it is, here are a few good picks.
What should you do when the stock market looks like it may take a turn for the worse?
Find the stocks that stand up in tough times.
Here are ten of them.
BONUS: they’ve all got high dividends. See “Div. yield” in the charts below.
What they do: Produce household and personal care staples (detergent, diapers, toothpaste).
Why recession-proof: Do you stop washing your hands and brushing your teeth during a stock market downturn? Didn’t think so. Demand for everyday essentials stays constant.
9. Colgate (CL)
What they do: Make toothpaste, mouthwash, cleaners, and pet food under well-known personal and home care brands.
Why recession-proof: 8 out of 10 dentists agree basic hygiene habits barely change in recessions, and offering products at various price points keeps customers loyal.
What they do: Make cereals, snacks, meals, baking products, and pet food under iconic brands like Cheerios. But are Cheerios really more iconic than Cinnamon Toast Crunch? I will fight you.
Why recession-proof: Food demand remains constant, with at-home eating often increasing in downturns, fueling reliable cash flow. Cereal for dinner, anyone?
What they do: They don’t just try to steal the recipe for Coca-Cola! PepsiCo Produce snacks and beverages (Pepsi, Lay’s, Gatorade, Quaker) across a ton of food and drink categories.
Why recession-proof: People continue to buy affordable treats and drinks, and strong brand portfolios help sustain margins. In short, snacks are recession-proof.
What they do: Big oil. Chevron manages a global integrated energy enterprise, covering oil and gas exploration, production, and refining.
Why recession-proof: Like it or not, oil and gas are a pillar of the global economy. Profitability stays intact even with lower oil prices, and energy remains a critical need despite economic downturns.
What they do: Produce tissues, diapers, and hygiene goods through brands like Huggies, Kleenex, and Kotex.
Why recession-proof: Have you ever considered not blowing your nose just because the markets were down? I suspected not. Once again, the essentials remain stable through stock market chaos.
What they do: Produce pharmaceuticals, medical devices, and consumer health products on a global scale. Basically, they make everything.
Why recession-proof: Most of what JNJ makes are essential goods, so demand is stable. Diverse product lines plus a strong balance sheet ensure stability.
What they do: Big oil. Operate a massive integrated oil and gas business, spanning exploration, production, refining, and more. Formerly the largest company in the world!
Why recession-proof: People always need energy, not necessarily MY energy, but they need it, especially in oil/gas format.
What they do: Random one! These guys distribute automotive and industrial replacement parts.
Why recession-proof: People repair cars instead of buying new ones in tough times, driving steady demand for replacement parts. And most don’t stop driving to work just because the market ticked down a bit. Me? I walk. Cue that Green Day song.
What they do: Provide regulated electric and gas utility services across several U.S. states. Boring but essential.
Why recession-proof: Utilities are indispensable, and regulatory frameworks grant stable earnings and near-monopoly protection. I love monopolies. Just like Duke, they provide stable returns and a strong dividend.
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