In these unpredictable times, every investor is looking for recession proof stocks to invest in. While such a thing may not exist strictly speaking, we have compiled some pretty reliable assets for your portfolio. Let's take a look at 5 stocks that seem to be winners, rain or shine.
5. Walmart
When it comes to times of economic uncertainty, this ain’t Walmart’s first rodeo. The discount retailer has been around since 1962, so it knows how to weather a storm.
During the credit crisis of 2008, Walmart did more than merely survive. It thrived, growing 7.2% that year. Not only did WMT keep paying dividends; the payments went up.
So far, the story seems much the same in 2020. When times are bad, consumers look to cut costs wherever they can. That will only redound to Walmart’s benefit.
4. Johnson & Johnson
It’s “a family company”, but this is no ma’ and pa’ shop.
Johnson & Johnson doesn’t just hold pharmaceutical patents. It also sells healthcare devices and other sanitary products. The result is a remarkably stable company with a proven track record of surviving.
The reality is, whether times are good or bad, people need health care products. It’s a steady demand, one Johnson & Johnson have been supplying since 1886.
Fun fact: Johnson & Johnson has raised its dividend payments for 58 consecutive years. That’s the definition of reliability, recession or no.
3. AT&T
You might think AT&T would be as vulnerable to recession as anyone else. Not so, for two reasons.
Firstly, most of AT&T’s revenue comes from its wireless services. Consumers pay for these on a subscription basis. Nothing is more durable when times are tough than a subscription. A pandemic-induced period of economic strife is no time to go changing your ISP.
Secondly, telecommunications are so vital to our lives -- both business and personal -- that it’s basically a recession-proof sector. Can you imagine a month of social distancing without internet access? Neither can we!
2. Dollar Tree
Much like Walmart, Dollar Tree is exactly the kind of bargain shoppers are looking for in uncertain times.
Although Dollar Tree was originally best known for selling trinkets and party favors, it has diversified into selling food and drink as well. And many of its locations accept food stamps.
The result is a company positioned to do a brisk business regardless of the mood of the wider marketplace.
1. Visa
Here’s one that might be a bit surprising. When the chips are down, why invest in a company so dependent on consumer spending?
There are three main reasons.
Firstly, Visa holds a 53% market share. It’s just too big to fail. It has competitors, yes, but it remains the gold standard in the credit game.
Secondly, Visa offers credit as opposed to loans. This distinction means that America’s largest credit card company is less exposed to threats of default than some of its competitors.
Thirdly, we’ve seen in the past that a recession doesn’t mean people stop spending on credit. On the contrary, it can cause them to spend more. During the 2008 credit crisis, Visa only saw a one-year dip in its market volume. Otherwise, it actually expanded its market share.
That makes it one of our recession-proof stocks in a volatile market.
