Top Recession-Proof Stocks to Buy Now

Picture yourself on a rough shore as huge waves hit the coast hard. The storm is strong, but some rocks don’t give in. Just like this, in a recession, the stock market faces tough challenges. Yet, some stocks remain strong, not swayed by the economic troubles. Investors everywhere are looking for these solid stocks during a recession. They hope to protect their money from the unpredictable markets. Choosing the right recession-proof investments is key to doing well, even when times are hard.

Since 1990, the US has seen 36 months of recession. During these times, certain sectors have shown they are reliable. For instance, healthcare dividends grew from $94.5 billion to about $135 billion. Also, the energy sector’s dividends jumped from $104.6 billion to an impressive $173.7 billion. Putting money into recession-proof stocks helps keep your investment safe during bad times. It also offers a chance to grow your money, even during a recession.

Key Takeaways

• The US economy experienced 36 months of recession from 1990 to 2023.
• Healthcare dividends surged to nearly $135 billion by 2023.
• Energy sector dividends increased dramatically to $173.7 billion.
• Investing in recession-proof stocks can stabilize and grow your portfolio.
• Identifying the right stocks is crucial to thrive during economic downturns.

Introduction to Recession-Proof Stocks

Investing in a recession might seem scary. However, knowing about stocks that resist recession can protect investors’ money. These stocks are in sectors that give us things we always need, like food and healthcare.

Sectors such as healthcare, utilities, and basic goods often have stocks that do well in recessions. For example, in early 2024, when the stock market was unstable, healthcare and utilities stayed strong. Consolidated Edison even made 59 cents per share in Q2 2024, showing they weren’t much affected.

Recession-proof stocks don’t get hit hard by market ups and downs. Atmos Energy is a good example. Their earnings rose to $6.00 per share in the third quarter of 2024, up from $5.33 the year before.

Consumer staples also hold their ground during hard times because people always need basic items. Colgate-Palmolive, for instance, saw its sales rise by 4.9% to $5.06 billion in Q2 2024. It shows that consumer staples stocks stay strong even when the economy does not.

Choosing stocks from these strong sectors can help protect your investments during tough times. Understanding these kinds of stocks makes investing in a recession less scary. It not only helps avoid losses but can also lead to profits, even when markets are down.

Healthcare Sector: Safe Bets During Recessions

The healthcare sector shines as a safe choice for investors during economic dips. Needs for ethical pharmaceuticals, medical devices, and healthcare services remain strong, no matter the economy’s state. By choosing recession-proof healthcare stocks, investors find both stability and growth. This is because the demand for health-related products and services is always present. Companies like Johnson & Johnson, Pfizer, UnitedHealth Group, and Medtronic show solid financial success. They keep investor trust up, even in hard times.

Johnson & Johnson (JNJ)

Johnson & Johnson is a dominant force in consumer health, pharmaceuticals, and medical devices. It does well even when the economy does not. With a P/E ratio of 17.2 and a dividend yield of 2.9%, JNJ is a strong choice for investors. Its revenue has grown 6.2% over the last five years. This proves its steady and powerful financial health. Its wide range of products places it high among the top recession-proof healthcare stocks.

Pfizer (PFE)

Pfizer is famous for its impactful pharmaceuticals. It brings great financial numbers to the table, with a P/E ratio of 15.6 and a dividend yield of 3.4%. Its revenue has increased by 8.1% in the past five years. This shows its strong place in the healthcare field. With groundbreaking medications and vaccines, Pfizer’s offerings are crucial. They keep demand and market steadiness high regardless of economic ups and downs.

UnitedHealth Group (UNH)

UnitedHealth Group, a huge name in healthcare, offers extensive insurance services and benefits. It has a P/E ratio of 22.7 and a dividend yield of 1.5%. UNH’s performance is solid, with a 7.5% increase in revenue over five years. This underlines its success in staying strong. Its insurance services are key as they ensure ongoing income.

Medtronic (MDT)

Medtronic leads in medical technology and devices, crucial for patient care worldwide. While specific financial metrics are not mentioned, its continuous innovation spurs demand. Hospitals and clinics depend on Medtronic for top-notch medical devices. It’s a vital investment for those focusing on recession-proof healthcare stocks.

Putting money in these firms offers a mix of stability, growth, and income, all safe from economic slowdowns. The healthcare arena, with giants like Johnson & Johnson, Pfizer, UnitedHealth Group, and Medtronic, supplies vital products and services. It stays strong no matter the economic weather. Discover more about how recessions affect everyday people and why healthcare stocks are smart choices during such periods.

Consumer Staples: Essential Goods Amid Economic Uncertainty

Investing in consumer staples is seen as a safe choice during tough times. These items are always needed because they are basic necessities. Companies like Kroger, Procter & Gamble, General Mills, PepsiCo, and Kenvue show why these stocks do well in recessions.

Kroger (KR)

Kroger’s online grocery sales soared over 100% during the pandemic. People keep going to grocery stores for essential food. This makes Kroger a steady choice for investors.

Procter & Gamble (PG)

Procter & Gamble leads in offering everyday products, from health care to personal hygiene. Its wide range of products helps it stay strong during downturns. It’s a top choice for recession-proof investing.

General Mills (GIS)

General Mills delivers with its packaged foods. Items like cereals and snacks ensure steady demand. It’s a solid option in consumer staples stocks.

PepsiCo (PEP)

PepsiCo’s mix of drinks and snacks handles recessions well. Its ability to keep up demand highlights its importance. Alcoholic Beverage Manufacturing industry includes stars like Anheuser Busch InBev SA, thriving in hard times because people continue to enjoy drinks.

Kenvue (KVUE)

Kenvue, leading in sanitizers and health products, spiked in sales during the pandemic. Selling up to 700 orders daily shows its crucial role as a recession-strong investment.

Utility Companies: Consistent Performance in Tough Times

Utility company stocks are known for their steadiness in hard times. They are stable because people always need water, electricity, and waste management. We’ll look into companies like American Water Works, Brookfield Infrastructure, NextEra Energy, Williams, and WM. They offer good investment chances because of their constant good performance.

American Water Works (AWK)

American Water Works is a leader in the utility field. It provides essential water services and is a favorite among investors. Its focus on sustainability and a strong performance record builds trust. The Recession Survival Guide shows how vital these services are in rough economic times.

Brookfield Infrastructure (BIP)

Brookfield Infrastructure stands strong in the utility sector. It’s doing well even with the challenges it faces, like policy changes and moving towards green energy. It’s valued lower than its actual worth, at 14% undervalued, which means it’s a good choice for investors seeking reliability.

NextEra Energy (NEE)

NextEra Energy is at the forefront with its green energy focus. It blends stability with innovation. With its large operations, it sees steady demand and pays attention to clean energy initiatives.

Williams (WMB)

Williams Companies deals with natural gas infrastructure. Such services maintain their importance, no matter the economy’s state. Stocks like Williams are attractive because they offer regular dividends, essential for a diverse portfolio.

WM (WM)

WM, once called Waste Management, handles waste and recycling. It keeps performing well even when the economy doesn’t. The constant need for its services makes WM a trustworthy stock choice. It’s especially appealing for those looking for dividends.

Adding utility stocks to your portfolio can bring stability and consistent income through dividends. They’re a solid choice in uncertain economic times. The Morningstar US Utilities Index has done better than the Morningstar US Market Index, showing their worth. Adding these utilities to your investments can help keep your portfolio strong when times get tough.

The Best Recession-Proof Stocks of September 2024

September 2024 has brought some stocks into the limelight. These stocks hold strong even when the economy doesn’t. Monster Beverage Corporation, Church & Dwight Company, Inc., Costco Wholesale Corporation, and Becton, Dickinson and Company stand out. They are known for their steady performance, profit-making, and growth prospects. This makes them solid picks in a shaky market.

Monster Beverage Corporation (MNST)

This September, Monster Beverage Corporation’s stock price climbed up. This reflects its solidity during tough economic times. With continuous growth in revenue, it has secured its place as a leader. Its stability showcases its worth among the best stocks to buy in a recession.

Church & Dwight Company, Inc. (CHD)

Church & Dwight Company is famous for its household products. It has shown a consistent stock performance, excelling in the market. Its strong record during downturns makes it a safe choice for investors. They appreciate its low-risk nature.

Costco Wholesale Corporation (COST)

Costco Wholesale shines in the essentials market. It boasts impressive revenue growth, beating many competitors. Its ability to maintain, or even increase, sales during downturns highlights why it’s a preferred recession investment.

Becton, Dickinson and Company (BDX)

Becton, Dickinson and Company excels in the healthcare field. Its steady earnings and low volatility show its reliability. Its performance in tough times positions it as a key investment for recession-proof strategies.

Interested in healthcare or essentials, these firms offer protection against economic ups and downs. They are crucial for a wise investment strategy that focuses on surviving recessions.

Recession-Resistant Stocks: Historical Performance and Future Outlook

Investors can smartly adjust their recession investing strategies by studying historical stock performance. The sectors such as consumer staples, healthcare, and utilities tend to do well in tough economic times. Their success comes from the ongoing need for basic goods and services, making them strong during recessions.

The future stock outlook for these industries looks good because of steady demand. For example, consumer staples are always in demand, no matter the economic situation. The healthcare sector grows with the constant need for medical care and products. And utilities, crucial for providing water and electricity, are necessary in all economic situations.

To deal with a recession well, you should include several crucial steps in your recession investing strategies:

1. Examine companies’ earnings per share (EPS) to check profitability.
2. Choose companies with steady earnings for more security.
3. Pick stocks that pay regular dividends, showing they’re solid.

Also, mixing different investments is key. Even though healthcare, consumer staples, and utilities are safe bets in downturns, tech stocks can be too. They did well in the 2020 recession. Adding varied stocks helps make your portfolio stronger for both now and the future.

Top Picks for a Recession-Proof Portfolio

To build a recession-proof portfolio, pick stocks known for stability and good performance, even when the economy is down. Here are some top choices that are stable and can grow:

Atmos Energy Corporation (ATO)

Atmos Energy is a standout in the energy sector because of its stability. It’s a regulated natural gas utility, so it gets steady demand and has predictable money coming in. Its reliability makes Atmos a top pick for keeping your investments safe during tough times.

CMS Energy Corporation (CMS)

CMS Energy has steady growth and is financially strong. It does well even when times are unsure. With a mix of businesses, including renewable energy, CMS Energy looks even more attractive.

WEC Energy Group, Inc. (WEC)

WEC Energy Group offers a safe investment choice. It has a strong area it serves and good regulations. Its push for new solutions and care for the environment makes it key for a strong portfolio, bringing in steady money.

Mondelez International, Inc. (MDLZ)

Mondelez International leads in snacks around the world, helping it stay steady in rough economic times. Its variety of products and well-known brands keep it growing and meeting customer needs.

American Electric Power Company, Inc. (AEP)

American Electric Power is one of the U.S.’s biggest utility companies. It gives out steady dividends and has stable earnings. With lots of infrastructure and a move towards clean energy, it’s a strong pick for going through economic ups and downs.

Investing in Cost-Conscious Retail

In tough times, stores known for good deals often do well. They appeal to shoppers watching their spending closely. Spotting good stock buys during these times means paying attention to these resilient companies.

Walmart (WMT)

Walmart stands out as a top retailer, offering a broad range of affordable products. In early 2025, it saw its sales rise by 6% to $161.5 billion. This steady success, along with a 1.2% dividend, places it as a top choice in hard economic times.

Dollar General (DG)

Dollar General is key in the budget retail world. Its many stores provide necessary items at low costs, important when times are tough. By focusing on value, it consistently draws in dedicated shoppers.

Home Depot (HD)

Home Depot excels even in downturns, known mainly for home improvements. During tough times, keeping homes in good shape becomes a priority, making Home Depot an attractive option. It offers stability and potential for growth, making it a smart investment during challenging economic periods.

Costco (COST)

Costco uses its membership model to sell bulk items cheaply. This builds customer loyalty and ensures constant income. Its unique approach and value make it stand out during economic lows.

Realty Income (O)

Realty Income, a key real estate investment trust (REIT), is known for its consistent monthly dividends. It invests in properties leased to budget-friendly retailers like Walmart and Dollar General. This ensures steady earnings, making it a solid choice in tough economic times.

“Our strategy has always been to support essential retailers who continue to thrive, even in challenging economic times,” Realty Income’s CEO stated during a recent earnings call.

These budget-conscious giants stay strong when the economy slumps, serving the needs of cost-aware customers. They present smart investment options for careful investors in unpredictable financial situations.

Diversified Portfolios: The Key to Surviving Recessions

Having a diversification strategy is key for investors during a recession. History shows that different assets and styles react uniquely in hard times. For instance, long-term bonds usually outperform stocks.

“Investing $10,000 in a standard S&P 500 index fund at the worst time in the 1990-91 recession would have grown to over $150,000 today with dividends reinvested.”

Mixing defensive and growth investments balances risk and return. Learning from past recessions, such as the 8.4% return after 2007-2009, helps manage future risks. Investing fixed amounts regularly, called dollar-cost averaging, can benefit from lower prices.

“If investors had bought an S&P 500 index fund at the peak before the 1990-91 recession, they would have seen an annualized return of 9.8% in the nearly 30 years since.”

Consider different sector performances too. For example, healthcare and consumer staples often do well in recessions. The Consumer Staples Select Sector SPDR ETF (XLP) has $14.2 billion in assets and a 2.56% dividend yield.

Utilities are another stable choice. The Utilities Select Sector SPDR ETF (XLU) has $12 billion in assets and sees a lot of trading. ETFs like these add stability and steady returns to your investment mix.

A good diversification plan isn’t just for getting through tough times. It’s crucial for reaching long-term investment goals too. Make sure your portfolio covers various sectors and assets. This reduces risks and sets you up for when the market bounces back.

For more insights into recession-proof investments, visit Morningstar.

Additional Recession-Proof Businesses to Consider

Putting your money into different sectors can be a smart move when the economy is rough. Healthcare and consumer staples are often seen as solid choices during tough times. But branching out into other areas can also shield your investments.

Technology Stocks with Consistent Earnings

Looking at technology stocks that earn well even during bad economic times is a good idea. Companies like NVIDIA Corp. and Citrix Systems Inc. have shown they can stand strong. For instance, in early 2020, Citrix had an impressive 28.02% return, proving that tech companies can grow even when the economy doesn’t.

Blue Chip Stocks with Dividend Growth

Blue chip stocks are also dependable, especially those with a history of growing dividends. Companies like Procter & Gamble and Clorox Co. do well in hard times because people still buy their products. These blue chip stocks are stable and pay dividends, appealing to cautious investors.

Infrastructure and Utility-like Companies

Investments in infrastructure and utilities are solid bets for keeping your portfolio safe. Companies like American Water Works and Brookfield Infrastructure provide must-have services, making them less affected by the economy’s ups and downs. The healthcare sector, similar to utilities in terms of job stability, is expected to grow 13 percent by 2032. This growth shows a steady need for these services. Also, global shipping of packages is likely to increase to 256 billion by 2027. This trend points to a continuous demand for strong infrastructure.

Conclusion

As we end our journey on the best recession-proof investments, we see that smart investing is key. It’s based on knowing history and choosing strong areas. Investing in stocks with a 3% or higher dividend and stable payouts for over 20 years is smart. Especially since, during the 2007-09 crisis, these stocks did better than the S&P 500.

Sectors like healthcare, consumer staples, and utilities are often safe during downturns. Companies like Johnson & Johnson, Procter & Gamble, and WEC Energy are vital. They give essential services and stable returns. Their dividends and Safe Dividend Scores™ show they’re reliable for a solid investment plan.

To make a strong portfolio that can withstand recessions, look at stocks known for dividend growth and stability. Brands like Walmart and McDonald’s have solid finances and offer dividends yearly. This can protect against market changes. So, choosing these reliable stocks, with their diverse strengths, is smart for investors. In uncertain economic times, making informed and strategic investments is key to long-term financial security.