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15 Consumer Goods Stocks That Should Be Fine in a Recession

By Marc Rapport - Sep 10, 2022 at 7:00AM
Shoppers pick up items at a grocery store.

15 Consumer Goods Stocks That Should Be Fine in a Recession

Selling necessities is a great way for a company to thrive at all times

No two recessions are alike, but there are some characteristics that we can expect to see no matter what when one happens -- or has occurred already, depending on whom you ask.

One is that consumer spending continues to dominate the direction of our national economy. Another is that consumers will seek to save on essentials and cut their spending on nonessentials as things head south.

That's especially true when inflation also rears its ugly head, which is precisely what's happening now. Here are some stocks that should be able to weather this storm.

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Dollar General cashier checking out a customer.

1. Dollar General

It’s not just your imagination if you see Dollar General (NYSE: DG) stores popping up everywhere. In business since 1939, the Tennessee-based company now has more than 18,000 stores in 46 U.S. states. Its locations are basically big-box stores in a small footprint, selling necessities from cleaning products to hardware to packaged foods.

ALSO READ: Dollar General Is Still a Monster Stock to Buy

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A CVS associate talks to a child near the pharmacy seating area.

2. CVS Health

Drug stores proved pandemic resistant, and it stands to reason they'll be just fine during a recession, too. Rhode Island-based CVS Health (NYSE: CVS) owns about 10,000 of them across the country -- more than anyone else -- and it also has about 1,200 Minute Clinics and a host of online pharmacies and other related businesses.

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Shell gas station.

3. Shell

Shell (NYSE: SHEL), based in London, is one of the largest producers of oil and gas in the world. It has more than 44,000 service stations, including more than 12,500 across the United States, the most of any company. And not many businesses can raise prices the way they can in this industry and produce record profits without missing a beat. Gas is that much of a necessity, regardless of recession.

ALSO READ: Investing in Top Oil Stocks

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Person in grocery store looking at produce.

4. Kroger

Kroger (NYSE: KR) is one of the largest grocery store operators in America, with about 2,700 locations in 35 states and the District of Columbia. From its humble beginnings in its Cincinnati hometown, the company has in recent years added more than 1,600 gas stations, too, along with manufacturing and processing a good bit of the foodstuffs it sells to millions of Americans every day.

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A Walmart employee helping a customer.

5. Walmart

As big as Kroger is, Walmart (NYSE: WMT) is much bigger, including grocery sales that alone more than tripled Kroger's total sales last year. The 5,300 or so Walmart and Sam's Club locations serve as headquarters for necessity-based shopping in thousands of communities, which a sour economy is not likely to change. This Arkansas-based retailer helped create budget-stretching big-box retail, after all.

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We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

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Costco Wholesale logo.

6. Costco

Costco (NASDAQ: COST) is the biggest competition for Sam's Club when it comes to the membership warehouse business. Based in the Seattle area, Costco now has about 830 locations. About 575 are in the United States with the rest in Canada, Mexico, Australia, Asia, and Europe. Like its big competitors, gas stations have become a ubiquitous part of the lineup, and Costco has gained a reputation as perhaps the largest provider of prescription hearing aids under one roof, or many of them.

ALSO READ: Is Sky-High Costco Still a Screaming Buy?

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Amazon delivery worker hands a box to a customer.

7. Amazon

Amazon (NASDAQ: AMZN) was already huge before the pandemic, and the surge in e-commerce prompted by it only grew this Seattle-based company's sales to new heights. Amazon also has a major presence in video streaming and cloud services and a lot of other ventures that just add to its diversity and power as a provider of consumer goods and services.

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Johnson and Johnson logo.

8. Johnson & Johnson

A recession probably won't require Johnson & Johnson (NYSE: JNJ) to put a Band-Aid on its bottom line. That's just one among the vast lineup of brand-name consumer goods the company markets. Others you might recognize: Listerine, Carefree, Johnson's Baby Shampoo, Tylenol, and Neosporin. As if that's enough recession resistance, this New Jersey multinational also develops and markets pharmaceuticals such as one of the first COVID-19 vaccines.

ALSO READ: Could Johnson & Johnson Stock Help You Retire a Millionaire?

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A bowl of cereal flakes.

9. Kellogg

Kellogg (NYSE: K) got its start when the Kellogg brothers came up with cornflakes to improve the diet of residents at a sanitarium in Battle Creek, Michigan. It worked out grrreat! This maker of Kellogg Frosted Flakes and Rice Krispies and a lot more iconic consumer brands is now a multinational operation whose products should do just fine through economic thick and thin.

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A person working outside drinking from a Coca-Cola bottle.

10. Coca-Cola

You think little things like inflation and recession are going to turn consumers away from their Coke Zero Sugar and all those other brands that have made Coca-Cola (NYSE: K) a household name for well over a century? If so, then don't buy shares of this Atlanta-based Dividend King, an honor that goes along with 60 straight years of dividend increases (50 gets you on the list).

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

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Procter and Gamble logo.

11. Procter & Gamble

Like Coca-Cola, Procter & Gamble (NYSE: PG) is a Dividend King and does Coke even better with 66 years straight years of payout boosts. P&G is still headquartered in its hometown -- Cincinnati, in this case -- and produces a galaxy of grocery-shelf staples including Head & Shoulders, Old Spice, Gillette, and Crest. Recession or not, we still want to be presentable!

ALSO READ: Dividend Kings of 2022

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Hand putting out a cigarette in an ashtray.

12. Altria

As one of the largest producers and marketers of tobacco products, including Marlboro cigarettes, Altria (NYSE: MO) falls into the category of what some call "sin stocks." That's up to you to decide, but the demand for Altria's products would seem to be intrinsically recession resistant. Altria also is regularly among the highest-yielding equities on the market, currently paying about 8% after 14 consecutive years of dividend increases.

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Person pumping gas a gas station.

13. Getty Realty

This one might push the envelope a bit, since it doesn't sell directly to consumers, but it's worth mentioning here. Getty Realty (NYSE: GTY) is a real estate investment trust (REIT) that owns more than a thousand stand-alone buildings that it leases to recession-resistant convenience stores, gas stations, car washes, and auto parts and service shops. REITs are required by tax law to pay most of their taxable income as dividends, and Getty is currently yielding about 5.5%.

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Person in sporting goods store trying out different balls.

14. Dick's Sporting Goods

Dick's Sporting Goods (NYSE: DKS) began life as a fishing tackle store in Binghamton, New York, in 1948. It's now headquartered near Pittsburgh and has about 730 stores under its own name, as well as more than 100 Golf Galaxy stores and other brands and a youth team sports mobile app. The nation's largest brick-and-mortar retailer of sporting goods should probably do just fine going forward in our sports-obsessed society.

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Green Starbucks barista aprons.

15. Starbucks

Let's wrap this up with a venti latte with caramel swirl from Starbucks (NASDAQ: SBUX). Who doesn't think this colossus of caffeine won't keep pouring it on during a recession? The Seattle-based company now has about 34,000 owned and licensed stores across the world, with about half in the United States. Add that to Starbucks' ubiquitous presence on grocery shelves across the world, and you have a built-in global business around people who just won't do without.

5 Stocks Under $49
Presented by Motley Fool Stock Advisor
We hear it over and over from investors, "I wish I had bought Amazon or Netflix when they were first recommended by The Motley Fool. I'd be sitting on a gold mine!" It's true, but we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Click here to learn how you can grab a copy of "5 Growth Stocks Under $49" for FREE for a limited time only.

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A family shopping at Walmart.

Recession or not, it's always a good time to invest in solid companies

Consumer goods are typically defined as products bought and used by consumers, rather than by companies to use to produce other goods. It's a broad category that includes food, clothing, fuel, and direct services like salons and car repair.

The companies in the list we just covered focus on businesses that provide what people may be most loath to cut back on or give up, even if they can, making these stocks good places to start exploring where to put your investment dollars as whatever's coming economically makes itself known.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Marc Rapport has positions in Amazon and Getty Realty. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, and Walmart Inc. The Motley Fool recommends CVS Health, CVS Health Corporation, and Johnson & Johnson. The Motley Fool has a disclosure policy.

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