5 best recession proof stocks to buy for Q4 2024
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Even the biggest businesses in the world can fall on hard times during a recession. Some companies however, perform well during economic downturns and are recession proof. Read on to find the best five stocks to buy during a recession in 2024.
What are the top recession proof stocks to buy?
Copy link to sectionThe table below includes some of the leading recession stocks to buy. Click each one’s ticker symbol for its latest price information or continue reading to find out why they’ve made our list.
| # | Stock symbol | Company name | Trade now |
|---|---|---|---|
| 1 | WMT | WalMart | Trade WMT 77% of retail CFD accounts lose money. |
| 2 | PG | Procter & Gamble | Trade PG 77% of retail CFD accounts lose money. |
| 3 | ABT | Abbott Laboratories | |
| 4 | BTI | British American Tobacco | |
| 5 | SAOC | Aramco Saudi Arabia Oil Corp |
1. Walmart (NYSE: WMT)
Copy link to sectionWalmart is one of the best stocks for investors to put their money in during a recession. It’s the largest retailer in the world and operates a chain of hypermarkets, discount department stores, and grocery stores. With nearly 11,000 retail locations across 24 countries it has a customer base that will only grow as consumers look to save money on everyday purchases.
When global economies went into meltdown during the Great Recession of 2007 – 2009 Walmart investors were protected from market volatility. Its share price rallied by over 30% in 2008, compared to the 35% loss experienced by the S&P during the same period. Since then, its price has seen steady growth and reached its highest level ever in 2022.
During recessions industries such as consumer goods and staples perform well. Walmart not only sells discounted groceries in retail locations but also approximately 35 million items annually through its website. With such a wide global reach, a growing online presence, and historically strong performance, Walmart is a top recession proof stock.
77% of retail CFD accounts lose money.
2. Procter & Gamble Co (NYSE: PG)
Copy link to sectionDividend king, Procter & Gamble is one of the worlds most reliable and stable businesses. Founded over 180 years ago, the consumer staples giant has paid dividends for 131 years and has increased them for a staggering 65 consecutive years. It has over 60 products in 10 categories ranging from home care to oral care and everything in between.
The majority of its products are not only necessary, but in constant demand. It has developed leading brands such as Gillette, OralB, Olay, Pampers, Tide, Crest, and Tampax. In recent years the business has been through a restructure and dropped 100 brands from its line while focusing on the 65 that made up 95% of its profits.
PG has traditionally sold its products in retail stores across the globe and is already looking to the future. Recent acquisitions of online-only companies has resulted in 14% of its total revenue coming from the internet. Its diverse range of products, many of which are necessary, makes Procter & Gamble one of the best consumer staples stocks to buy in a recession.
77% of retail CFD accounts lose money.
3. Abbott Laboratories (NYSE: ABT)
Copy link to sectionThe healthcare industry is generally one of the top performers during a recession. With so many companies operating within the sector, finding the best investment can be tickey. Abbott Laboratories is our experts’ recommendation for a recession proof stock in healthcare. Founded over a century ago, ABT now operates globally in 160 countries.
Like Procter & Gamble above, Abbott Laboratories belongs to the dividend aristocrats club and has increased shareholder payouts for the past 49 years. It’s a diverse business and operates in four main segments: Nutritional products, pharmaceuticals, diagnostics, and medical devices.
In recent times its stock has been a strong performer. Most notably its involvement in coronavirus testing in the United States resulted in $2 billion in sales and a 24% uplift in its share price. However, its ability to stay strong during difficult economic times is what has helped it make our list. In 2008, during the height of the last recession its stock was up 18%, while the S&P fell by 30%.
4. British American Tobacco (NYSE: BTI)
Copy link to sectionBritish American Tobacco is another consumer goods company to make our list. Founded in 1902 it is now the largest tobacco company in the world based on net sales to its 150 million consumers. Some of its most famous brands include Dunhill, Camel, Lucky Strike, Pall Mall, and Rothmans amongst others.
As the world’s population becomes more health conscious, concerns for the tobacco industry have been growing in recent times. However, job losses and rising unemployment experienced during recessionary periods bode well for companies like BTI as individuals turn to tobacco and alcohol to drown their worries.
Its share price has taken a hit in recent years and has lost around 50% of its value from its 2017 highs. Competition from the likes of Phillip Morris and the popularity of vaping hasn’t helped its performance. However, in times of recessions, adding a dividend paying tobacco business like BTI to your portfolio could be a prudent move.
5. Aramco Saudi Arabia Oil Corp (SAOC)
Copy link to sectionFinal spot on our recession proof stocks list goes to oil and gas giant, Aramco. The Saudi Arabian based company hit the stock market back in 2020 with the largest initial public offering (IPO) in history. With a market cap of around $2 trillion, in May 2022 it overtook Apple to become the most valuable company in the world.
Even though renewable energy is becoming increasingly popular, the world still runs on and needs oil and gas to operate. So its unsrprising to find companies within this industry performing well during tough economic times. Saudi Aramco’s sheer size dwarfs that of its competition.
In 2021 it generated revenue of $359 billion, almost double that of the $164 billion BP delivered. Not only is it an energy producer, but it owns the largest oil reservoir in the world with 260 billion barrels and can produce in excess of 13 million barrels a day. Its share price largely moves inline with the price of crude oil so it can have its risks.
Where to buy the best recession proof shares
Copy link to sectionTo buy recession proof stocks you’ll need to use an online broker. Check out the table below which includes the best brokers around to buy shares. Click on any of the links to register in just a few minutes.
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Buy or sell stock CFDs with Plus500. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
What is a recession proof stock?
Copy link to sectionIt’s a company that tends to perform well during a recession. Usually recession proof stocks belong to certain industries that experience steady demand in good and bad times. You’ll find the best recession proof stocks within the healthcare industry, consumer staples sector, utilities, and energy industry.
Are recession proof shares a good investment?
Copy link to sectionYes it is worth including some recession proof stocks to your portfolio. This is especially true if you believe a recession is on the horizon. In general, the stock market tends to decline during tough economic times and having a portion of your holdings in companies that are known to be recession proof is a good defensive play.
As we’ve previously mentioned, the best recession proof stocks can be found in certain industries. Companies that provide goods or services that are necessary are a good choice. The healthcare and consumer staples industries in particular can provide a number of good recession proof investments.
Timing your investment can be the difficult part as it’s impossible to know exactly when a recession will come into play. It’s a good idea to keep up to date with the latest news and market analysis to stay ahead and you can check out any of the links below.
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