Recession proof stocks: 7 Recession-Proof Stocks to Buy as Investors Get Jittery

It expects to have repurchased $2.75 billion for all of 2022. As a result, shareholders got one new share of PM for every share of MO they owned. PM and most other major cigarette companies benefited from increased sales during the Great Recession. Investors who want to expand their search beyond this list of recession-resistant stocks can do a few things. These were the 10 most undervalued stocks as of Jan. 20, 2023, that Morningstar’s analysts cover and fit our definition of recession-resistant.

Approximately 30% of the firm’s refined products markets charge regulated tariff rates that track the producer price index for finished goods. Besides selling a staple product, Flowers has worked to remain a leader in the U.S. fresh bakery market by developing a portfolio of strong brands over many decades. Schedule monthly income from dividend stocks with a monthly payment frequency. Intuit’s shares took a hit in early November when the company announced that hiring at Credit Karma would be paused to account for a potential softening of the economy. But, like many growing businesses, it doesn’t mean it has stopped hiring altogether.

Oil prices have fallen below this threshold and might in the next downturn. But Chevron maintains ample balance sheet capacity so it can borrow debt to plug its cash flow deficit and defend its dividend until the pricing environment recovers. Coke’s strong positioning, built on the back of tremendous advertising spending and distribution network investments, has historically helped the company raise prices at a pace similar to inflation, protecting margins. PepsiCo’s profits are insulated from rising interest rates as well since the company maintains low leverage and earns an A+ credit rating.

According to Gurufocus, P&G’s trailing-year net margin comes out to 17.79%. Compared to other companies listed in the consumer packaged goods industry, PG outpaces 91.78% of rivals. Historically, stocks in the consumer staples, health care and utilities sectors have fared well during recessions.

Please note that all stock prices are on a split-adjusted basis. GSK stock looks mispriced, as shares trade 29% below what we think they’re worth. GSK is one of the largest pharmaceutical and vaccine companies worldwide by total sales. Patents, economies of scale, and a powerful distribution network support the drugmaker’s wide moat rating, argues Damien Conover, director of healthcare equity research for Morningstar.

For investors, this means seeking out the best recession-proof stocks to help protect their portfolios during a time of economic uncertainty. One of the largest medical device companies focused on therapeutic medical devices for chronic diseases, Medtronic enjoys high switching costs. Its intellectual property and relationship with physicians also contribute to its wide moat, says Morningstar’s Wang. NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty.

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The analyst has an Outperform rating and a $505 target price on Intuit, 20% higher than where it’s currently trading. In 2022, EOG paid out a total of $3 in regular quarterly dividends, and an additional $5.80 in special cash dividends, for a total payout of $8.80 a share. Early in January, CEO Chris Kempczinski issued a company-wide memo outlining changes coming to the Golden Arches, including job cuts. These cuts will make the company more efficient and productive as it accelerates restaurant openings. However, the inflationary times we live in suggests McDonald’s remains an excellent defensive play.

Too much focus on the latter, though, and you could be overly exposed to sudden market drops. Having some exposure to technology still makes sense, but not to the degree of 2020. Investors should be selective and focus on companies with consistent earnings.

Dividend payments have increased an average of nearly 15% per year over the last five years. Where Thermo Fisher Scientific excels is its stock performance. TMO is the best-performing recession stock on our list, outperforming all the others. The company has sustained an average annual return of more than 23% over the last decade, and it’s beaten the total return of the S&P 500 by nearly 13%.

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Overall, Duke’s essential services, stable cash flow, and strong balance sheet make the stock a good choice for low-risk income investors during recessions and bear markets. We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

The company has generated impressive earnings growth over the last five years, averaging nearly 36% per year. Going forward, analysts expect this rate to drop to growth of only 5% per year. The company’s dividend game doesn’t quite match its share performance, unfortunately. It has the lowest dividend on the list at 0.3%, although it has delivered the highest dividend growth rate.

What Are Recession-Resistant Stocks?

Analysts expect 6.6% yearly EPS growth over the next five years. Declines in shares of BDX have been limited to 30% over the last decade. That may still seem like a lot, but it is much lower volatility than the majority of stocks.

Regulators have also been less agreeable to raising electricity and gas rates given the city’s high cost of living and already pricey power. Franchisees generate the bulk of McDonald’s profits by paying the company high-margin rent and royalties based upon a percent of sales. As this price index rises, the market rates charged across the rest of the business generally face upward pressure, too.

The Best Recession Stocks of April 2023

The company also has a conservative balance sheet, earning it an A credit rating, and should remain a cash cow given the lack of capital required to maintain this business. Looking ahead, management expects earnings to grow by 6% to 7% per year as WEC’s rate base and regulated renewables continue expanding. This should fuel a similar pace of dividend growth, giving WEC one of best combinations of dividend income and growth in the sector. Let’s check out 20 of the best recession stocks with dividends that can help investors generate reliable income in retirement and stay the course. While that’s high relative to other fintech stocks and the broader market, it’s less than the company’s five-year average of 37.5.

But in times of duress, it almost acts as part of the governmental infrastructure. Therefore, that same ethos should make HD one of the recession-resistant stocks to buy. As a relatively new public enterprise – it launched its initial public offering in 2019 – it’s difficult to say with absolute authority that GO will be one of the stocks that outperform in a recession. Conspicuously, naysayers will look to its trailing-year loss of nearly 18% as evidence that GO can’t hack it.