RECESSION PROOF STOCKS
Anyone investing in the stock market right now is seeing a lot of red. The market continues to trend downward week after week. We are in a bear market and no one knows how long it will be before equities generate momentum to the upside. If you are an investor who is considering throwing in the towel; I have a suggestion for you. Don’t do it! Resist the urge to liquidate your investment portfolio. Now is the time to stay the course or reallocate your stocks. Here are a few recession proof stocks that can survive the current economic downturn.
Recession proof stocks offer less upside than riskier stocks but they have the advantage of dropping much less than riskier equities during times of uncertainty. My favorite recession proof stocks operate in defensive industries, possess large market caps, and pay dividends. This puts cash in your pockets during times when cash is tight. Here are 5 recession proof stocks that are safe to buy now.
Kimberly Clark is a personal care conglomerate with a bunch of different brands. The company makes diapers for kids and adults under the Pull-ups, Huggies, and Depends brands. Kimberly Clark makes paper towels under the Kleenex, Cottonelle, Viva, and Scott brands. Those are just the most popular brands. Toilet paper, paper towels, diapers, and feminine hygiene products are recession proof. People need these products in both good and bad times. The company is trading near its 52 week low and offers a dividend yield of 3.9%. This is a company that generates significant free cash flow making it strong enough to survive any economy.
Unilever is an overlooked company that competes in vitally essential industries. Unilever produces consumer staples in the food, beauty, cleaning products, and personal care industries. Some of it most popular major personal care brands are Dove and Lifebuoy Soap. Everybody needs soap. Unilever makes Hellmann’s mayonnaise, and sells ice cream under the Ben & Jerry’s names. They also make grooming products under the Axe brand. While Unilever is not a major growth stock, the company does provide an attractive dividend yield of 4.3%.
Mondelez International is the formerly named Kraft. Mondelez has a streak of 10 consecutive years of dividend growth. The firm recently raised their dividend in a rough inflationary environment. Mondelez is not only increasing cash distributions but the company is also repurchasing shares. Stock buybacks are a good sign that a company believes its shares are inexpensive. Mondelez owns too many brands to list. Some of the major ones include Oreos, Belvita, Trident, Chips Ahoy, Ritz, Sour Patch, Halls, Triscuit, Tate’s, Wheat Thins, and Toblerone. This is a company with a delicious food item for everyone. Mondelez is giving a dividend yield of 2.7%. Pepsi and Coke are also attractive options in the food and beverage industry.
I am bullish on Target’s stock. Shares of the retail giant have been halved due to excess inventory and inflationary pricing pressure concerns. I believe the worst news is just about baked into the stock’s price. Target is anticipating a big holiday season and is ramping up by hiring 100,000 seasonal retail associates. Target is a preferred shopping destination among Gen Z and millennial shoppers. Target is one of the main retailers that will benefit when deflation finally kicks in. Until then investors can benefit from the 2.83% dividend yield that the stock is giving.
Utility stocks are never as exciting as tech and healthcare stocks but the industry is much safer. The utilities energy is known for slow growth and stable dividend growth. Everyone needs electricity. Utilities are something that everyone spends money on. Duke Energy has positive earnings growth at a time when companies like FedEx are disappointing the market with earnings misses. Duke can still provide stable earnings growth along with a robust dividend yield of 3.89%.