Is a recession coming? Our economic outlook seems increasingly gloomy due to President Trump's trade policies. Though things might not go that far, it's still worth planning ahead.
If a recession does hit, it might also affect the stock market, and different companies and sectors will perform differently. Let's consider two stocks that should handle recessions better than most and are worth investing in for the long haul: Vertex Pharmaceuticals (VRTX 1.32%) and HCA Healthcare (HCA 0.24%).
1. Vertex Pharmaceuticals
Vertex Pharmaceuticals is best known for developing cystic fibrosis (CF) drugs. In patients with this condition, the normally thin and slippery digestive juices and mucus that protect the lungs and other internal organs become thick and sticky, clogging various internal organs and airways. This can cause all sorts of issues, including respiratory problems.
CF requires constant care. Vertex markets the only drugs in the world that target the underlying causes of this disease. Needless to say, patients won't want to stop taking these medicines, even in bad economic times.
NASDAQ: VRTX
Key Data Points
The company's results might suffer somewhat if the company had any competition, but it doesn't. Competitive advantages hardly get stronger than an actual monopoly. That's why the company should perform well even in the worst recessions.
Vertex's financial results have generally remained strong. In 2024, the company's revenue increased by 12% year over year to $11.02 billion.
The company still has room to grow in its core CF franchise as many eligible patients have yet to come on board. And it has diversified its lineup in recent years. Its portfolio of approved drugs now features Casgevy, which targets a pair of rare blood diseases, and Journavx, a non-opioid medicine for acute pain. These will contribute to Vertex's growth.
Lastly, the company has a pipeline with several promising candidates. It is running phase 3 studies for inaxaplin as a potential treatment for APOL-1 mediated kidney disease, for which no approved therapies target the underlying causes.
There are several exciting early-stage programs, too. The stock should ride the next recession just fine (whenever it comes) and deliver excellent results long after.
2. HCA Healthcare
HCA Healthcare is one of the largest hospital chains in the U.S. That's another pocket of the healthcare sector that is likely to perform relatively well in an economic crisis.
Some medical facilities like surgery centers cater to patients who want all sorts of procedures, including optional cosmetic surgeries that might not be a priority when purse strings get tight. So, HCA Healthcare might lose some business in a downturn, but the company should be fine for the most part.
NYSE: HCA
Key Data Points
Most visits to hospitals don't happen by choice. HCA Healthcare's performance in the past five years has been strong despite significant disruptions from the pandemic, economic issues like inflation that affected its costs, the need to rely on more-expensive contract labor, and natural disasters affecting its operations in some places.
HCA Revenue (Quarterly) data by YCharts.
It's also worth pointing out that amid all these problems, the company continues its good habit of increasing its share of this competitive market. It held a 24% market share in 2012 that grew to 27% 10 years later. And it aims to grind out more to end 2030 with a 29% slice of the pie.
So, not only is it resilient, but it also is more so than its peers, as evidenced by the fact that it keeps grabbing a larger part of the industry. That speaks to its prospects, too.
HCA Healthcare's ability to grow its market share through investing in various in-demand services; its long-standing relationship with patients, payers, and physicians, and its established network of well over 100 facilities across the U.S. position it to continue performing well in the long run. For those who think a recession might be coming -- and even for those who don't -- the stock is worth buying and holding on to.
