We know you've been frustrated with the stock market lately. That's why we decided to try to give you some relief -- by looking at a list of nine stocks that might be best able to weather the current troubles in the economy and stay profitable for investors.
After laying out our case, we asked our Motley Fool CAPS community to chime in with their thoughts. They've spoken, and so it's time to see which stocks will get shareholders through the tough times.
A diamond in the rough
CAPS players picked deepwater driller Diamond Offshore Drilling (NYSE: DO) as our third-place winner. As Fool contributor David Lee Smith pointed out, oil wouldn't have to keep reaching record highs in order for oil services companies like Schlumberger (NYSE: SLB) and Halliburton (NYSE: HAL) to keep cranking out big profits. With round-the-world presence and impressive profit margins and earnings growth at a reasonable price, nimble Diamond looks poised to prosper no matter what the economy brings.
But while our CAPS community gave an energy play the No. 3 spot, the top two places went to more traditional defensive plays during an economic slowdown. Sectors like consumer staples and health care often hold up best during a recession -- and even once things pick up, the cream of the crop may continue to shine.
No gamble with Procter
Our second-place finisher earns the top spot at my house, as Procter & Gamble (NYSE: PG) makes the shaving cream, diapers, and shampoo we use every day. With everything from laundry detergent to makeup, pet food to water purifiers, P&G is a dominant force in many U.S. households.
Yet the story doesn't stop at the border. Although P&G may seem like a purely defensive play, there's a whole new world of emerging markets chomping at the bit to turn increasing economic prosperity into a higher standard of living. As fellow Fool Alex Dumortier observed, a strong history of performance for shareholders shows no signs of slowing down anytime soon.
And our winner is …
The title of best recession-proof stock goes to Johnson & Johnson (NYSE: JNJ). Fool contributor Ryan Fuhrmann noted that although J&J shares haven't done too well lately, the company is poised to recover strongly. Its line of consumer products matches up well with P&G, giving Johnson & Johnson a strong foundation to survive a downturn. Moreover, despite facing the same challenges that other big-pharma companies like Merck (NYSE: MRK) and Pfizer (NYSE: PFE) face from generic competition, J&J continues to earn support from CAPS players who believe that it will thrive even in a tough market environment.
Want to learn more about the stocks you own -- or are thinking about buying? Try out Motley Fool CAPS for yourself. It's absolutely free, but the value of the information you'll get from the Fool community is priceless.
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