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15 Stocks That Can Withstand a Recession

By Jeremy Bowman - Jun 15, 2022 at 1:04PM
Street signs saying Recession and Recovery at an intersection.

15 Stocks That Can Withstand a Recession

Is a recession coming?

We're not officially in a recession yet, which is typically defined as two straight quarters of negative growth, but a recession is looking more likely by the day. Inflation remains at 40-year highs, meaning that the Federal Reserve will aggressively ramp up interest rates to slow down the economy. Consumer sentiment is at historic lows due to high food, gas, and rent prices and the fading tailwinds of pandemic stimulus. Finally, GDP growth in the first quarter was negative, meaning we're halfway to a recession.

Still, investors shouldn't fear an economic downturn as bear markets are often the best times to buy. Keep reading to see 15 stocks that will carry you through a recession and beyond.


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Warren Buffett smiling at an event.

1. Berkshire Hathaway

There may be no better guru for managing through a recession than Warren Buffett, the billionaire investor who has gotten most of his outperformance during bear markets. Given that, why not invest in Buffett's Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) conglomerate?

Buffett has historically favored stocks with sustainable competitive advantages, like Coca-Cola, and also invests heavily in industries like insurance, which people need regardless of the greater economic climate.

Not surprisingly, Berkshire is down just 4% this year, compared to a 21% drop in the S&P 500.

ALSO READ: Warren Buffett Investing

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A Dollar General store.

2. Dollar General

A surefire formula for success during a recession is to sell products people need, such as consumer staples, at a discounted price, and that's exactly what Dollar General (NYSE: DG) does.

Dollar General now has more than 17,000 stores across the country, making it the biggest retail chain in the U.S. It has aggressively expanded in rural America with a business model that offers sundries and discretionary items at a discounted price.

During recessions, consumers often trade down to cheaper options, meaning Dollar General could actually see growth in sales during a recession.

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A selection of auto parts and accessories.

3. AutoZone

Auto parts may not sound like the kind of industry that benefits from a recession, but since consumers typically delay purchases of new cars during tough economic times, auto parts sales tend to increase, especially coming out of a recession, as having a vehicle is nonnegotiable for most Americans.

AutoZone (NYSE: AZO) has had some of its highest-growth years in the aftermath of the financial crisis and the dot-com bust, and it's likely to do so again if another recession hits as new and used car prices are already elevated because of the semiconductor shortage.

Additionally, AutoZone has a long history of buying back stock, so it should take advantage of any sell-offs in the meantime.

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A health insurance form and more.

4. UnitedHealth Group

People get sick regardless of the state of the economy, and you need health insurance whether we're in a bull market or a bear market.

Healthcare is well known as a recession-proof sector, and that's especially true for insurers like UnitedHealth Group (NYSE: UNH), which is the largest in the U.S.

UnitedHealth has also trounced the broad market over the past 10 years, benefiting from increased spending on healthcare, especially as boomers age.

ALSO READ: If You Invested $5,000 in UnitedHealth 10 Years Ago, Here's What You'd Have Today

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A Verizon Wireless storefront.

5. Verizon Communications

Subscription-based businesses also tend to be good bets for recession-proof stocks, and there are few subscriptions Americans rely on more than their wireless plan.

That's good news for Verizon Communications (NYSE: VZ) as many of its customers are locked into contracts and are unlikely to ditch their phone plan even in a tough economy.

The leading wireless carrier also has a well-funded 5% dividend yield, an additional enticement during a recession and one that helps make the stock more defensive.


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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 glass Pepsi bottle over blue background.

6. PepsiCo

Consumer staples companies tend to be good bets during recessions as they sell products that people buy regardless of the economic climate.

PepsiCo (NASDAQ: PEP) is a classic example. The owner of its namesake soda brand -- as well as Gatorade, Quaker products, and Frito-Lay snacks -- has been a standby for investors in good times and bad. The company is over 100 years old and is a Dividend Aristocrat, having raised its dividend every year for more than 25 years.

Today, the stock offers a dividend yield of 2.8%, making it a solid bet to ride out the macroeconomic tumult.

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The exterior of a Costco.

7. Costco

While Costco (NASDAQ: COST) may not seem like your typical recession-proof stock, the membership-based warehouse retailer has a number of qualities that make it a good candidate to endure any economic slowdowns.

First, Costco has a reputation for rock-bottom prices, meaning customers look to it as a good way to save money. Costco's membership model also locks in customers and is the source of a majority of its profits as it sells products nearly at cost, so its bottom line shouldn't be affected by a recession.

As the clear leader in warehouse retail, Costco also faces limited competition in the category, making it well positioned for a tough economy.

ALSO READ: Why Costco Can Beat Inflation

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Person underneath big electric towers and lines.

8. Con Edison

If you're looking for stocks that truly don't care about a recession, utilities are probably the best place to look.

Typically regarded as boring stocks, utilities generally pay strong dividends and operate as regulated monopolies, so both the upside and downside to the stocks are that prices are bound by a regulatory framework.

Consolidated Edison (NYSE: ED), the electric company that powers much of the New York metro area, is a great example of a recession-proof utility stock. Con Ed shares are actually up 7% year to date, likely as investors see it as a refuge in a bear market, and the stock is a Dividend Aristocrat.

It currently pays a dividend yield of 3.3%.

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An exterminator spraying for pests.

9. Rollins

Rollins (NYSE: ROL) may not be a household name, but you're likely familiar with its biggest brand, Orkin, in the pest control business.

Rollins is essentially in a duopoly in the pest control industry with Terminix, and not surprisingly, pest control is a recession-proof business. If you have an infestation of mice or termites, you can't really wait for a healthy economy to do something about it, and landlords and commercial businesses are generally required by local regulations to have a regular visits from a pest control provider or to respond to any reports of pests.

True to that reputation, Rollins has bucked the market trend this year. The stock is down just 4% this year, or flat with dividends factored in.

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Person's hand petting a happy dog.

10. Petco

You might be surprised to learn that the pet and pet care industries are recession proof. Pet owners have to feed and care for their pets regardless of the overall economy, and spending on pets actually continued to increase during the financial crisis.

During tough times, people also look to their pets for comfort. Pet adoptions spiked early in the pandemic thanks to lockdowns.

Petco (NYSE: WOOF) presents a good option in the space as the company operates both retail stores and an e-commerce business, along with providing services like grooming and veterinary care.


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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Johnson and Johnson logo.

11. Johnson & Johnson

Johnson & Johnson (NYSE: JNJ) has about everything you could want from a recession-proof stock.

It has a diversified healthcare model with exposure to consumer products like Tylenol, medical devices, and pharmaceuticals. It's been around for more than 100 years. It's a Dividend Aristocrat, and it's one of only two publicly traded companies with a AAA credit rating from the S&P (the other is Microsoft).

Not surprisingly, Johnson & Johnson is a favorite "set-and-forget" stock, and its dividend yield of 2.6% also adds some appeal to income investors.

ALSO READ: Investing in Healthcare Stocks

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Detergent aisle in a supermarket.

12. Church & Dwight

Another consumer staples company to make the list, Church & Dwight (NYSE: CHD) is lesser known than peers like Procter & Gamble and Clorox, but it is just as resilient as those other household products companies.

It owns timeless brands like Arm & Hammer baking soda, Trojan condoms, OxiClean stain remover, and Xtra laundry detergent.

The company has grown in recent years in part from innovating new Arm & Hammer products, and it can handle inflation by passing along price hikes like many of its peers are doing.

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Cigarettes on top of loose tobacco.

13. Altria

Tobacco stocks aren't for everyone, but one reason the sector was so successful for so long is that it is recession proof.

Cigarettes are an addictive product, and smokers will buy them regardless of the state of the economy. Not only that, but smokers tend to be very loyal to the brand that they use, which is good news for Marlboro parent Altria (NYSE: MO). About 50% of the domestic tobacco company's sales come from Marlboro.

Altria is also a Dividend Aristocrat, and it currently pays a 7.4% dividend yield, making it a great place to park your money in a volatile macroeconomic environment.

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Waste Management employee stands by a garbage truck.

14. Waste Management

Boring and even off-putting businesses are often sources of recession-proof stocks, and Waste Management (NYSE: WM) fits the bill there.

The company is one of the country's biggest providers of trash and recycling collection, and it has several landfill gas-to-energy stations.

Waste Management is not a Dividend Aristocrat yet, but should become one in the next decade, and it looks well prepared for a recession since residents and businesses still need trash pickup services.

ALSO READ: Recession-Proof Stocks

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A Domino's driver delivering pizza.

15. Domino's Pizza

Restaurants aren't typically thought of as recession-proof business models, but Domino's Pizza (NYSE: DPZ) may be the exception that proves the rule. The company has a long history of growing comparable sales, even during the financial crisis, and its low prices make it a good option for consumers looking for a cheap dinner in a recession, but still want the convenience of delivery.

Domino's also franchises most of its restaurants, so it makes the majority of its profits collecting royalties from sales and selling products to its franchisees.


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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Professionally dressed individual takes notes in front of laptop.

Be prepared

In investing, it's almost always a good idea to diversify, and if you don't own any recession-proof stocks, you should consider adding some from this list.

While these companies may not be top performers in bull markets, many of them have crushed the market over the long term thanks to their ability to withstand recessions.

Ultimately, that's what counts the most in investing.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway (B shares), Costco Wholesale, Domino's Pizza, and Rollins. The Motley Fool recommends Johnson & Johnson, UnitedHealth Group, Verizon Communications, and Waste Management and recommends the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.

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