The Nasdaq Composite (^IXIC +1.52%) and the S&P 500 (^GSPC +1.20%) sank, shifting in and out of correction territory in the first quarter of the year for one big reason: investors have been worried about the economy. President Donald Trump is putting tariffs on imports, and economists predict this could lead to higher inflation and a slowdown in growth. Some have even mentioned the idea of a recession.
These are words investors don't like to hear -- and you may even wonder if you should invest right now. The good news is, no matter what the economy does next, there are moves you can make today to prepare your portfolio. This includes choosing stocks that have what it takes to hold up during any economic environment. Healthcare companies, for example, may excel since people need their medicines or procedures regardless of the economic backdrop.
By investing in these companies, you may limit declines in the near term and go on to score a win over the long run. If you're worried about the economy, check out these two no-brainer buys to shield your portfolio.
Image source: Getty Images.
1. Johnson & Johnson
Johnson & Johnson (JNJ 0.11%) already has climbed 14% this year. But don't worry... it's not too late to get in on this pharma giant. It still trades for only 15x forward earnings estimates, a fair price considering the company's earnings track record and its newly sharpened focus on two key businesses: pharmaceuticals and medtech.
NYSE: JNJ
Key Data Points
The pharma powerhouse spun off its consumer health business a couple of years ago, and now devotes all of its resources to those areas of greater potential. The company also has made acquisitions in recent years buying companies including Abiomed and Shockwave, which are adding to growth.
For example, in the recent quarter, Abiomed, which offers heart recovery devices, posted growth of more than 13%. And J&J has continued to reinforce the potential for growth over time by investing -- to the tune of $50 billion in research and development and mergers and acquisitions last year.
"The strategic decisions we made in 2024 positioned Johnson & Johnson for sustained growth through the second half of the decade and beyond," Chief Executive Officer Joaquin Duarte said during the recent earnings call.
J&J currently has 26 platforms that bring in at least $1 billion in annual revenue, along with a solid pipeline, which set the stage for revenue gains over time. All of this makes J&J a stock you can buy without hesitation, even in the most uncertain of market times.
2. Intuitive Surgical
Intuitive Surgical (ISRG +2.46%) is the global leader in robotic surgery. What I like most about this company is its fantastic moat, or competitive advantage. This is due to two things.
First, most surgeons train on the company's flagship robot, the da Vinci, so they're comfortable using it, a factor that keeps them loyal. Second, with a price tag of $1 million or more, these robots aren't cheap, and hospitals generally aim to use them over time to amortize the purchase.
Another important point is Intuitive's source of recurrent revenue. The company's revenue story begins with the sale or leasing of a robot but continues month after month and year after year with ongoing purchases of accessories and instruments and servicing contracts for the platform.
Intuitive generates the lion's share of its revenue from the sales of accessories and instruments. This is key because it shows that each robot results in a lasting stream of revenue.
NASDAQ: ISRG
Key Data Points
All of this has produced a long history of earnings growth, and the momentum has continued in recent times. In the latest quarter, revenue and net income on GAAP and non-GAAP bases each rose in the double-digits, and systems placements and procedures climbed.
Intuitive shares trade for about 61x forward earnings estimates, down from about 80x just a few months ago. This still isn't cheap, but it's reasonable considering the company's dominance in its industry and solid moat. Since Intuitive generally has traded at a premium in recent years, the stock looks like a not-to-be-missed buying opportunity at today's levels.
