7 Top Stocks to Buy During the Next Stock Market Crash

The stock market has rebounded tremendously since plunging as the COVID-19 outbreak spread across the U.S., forcing a near-total shutdown of the economy. After dropping by as much as 40%, the S&P 500 has gained back all of its losses and more and is actually higher by about 8% for the year.

Many of the stocks that were incredible bargains during the coronavirus crash have obviously rebounded along with the market. But it's never a bad idea to start making a shopping list for the next time stocks go on sale. So, here are seven rock-solid businesses that could be excellent candidates to buy if the market plunges.

5 Winning Stocks Under $49
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!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

Net-lease real estate investment trust (REIT) STORE Capital (NYSE: STOR) was beaten down during the coronavirus crash and has still not fully recovered, with shares down nearly 25% in 2020. The biggest issue? About one-third of the REIT's rental income comes from restaurants, day cares, health clubs, family entertainment centers, and movie theaters -- industries that have been severely affected by the pandemic.

However, the recent data looks strong. Virtually all (98%) of STORE's properties had reopened as of mid-September, and rent collection was at nearly 90% of all billings. With a dividend yield of more than 5% that is well covered by earnings, STORE is one stock that could become a major bargain if the market crashes again.

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Historically speaking, U.S. Bancorp (NYSE: USB) is one of the most expensive bank stocks in the United States, in terms of its price-to-book valuation. And there's a good reason for this. The bank has a proven track record of responsible risk management and has consistently delivered returns on equity and assets, as well as operational efficiency, superior to its big-bank peers.

Thanks to the COVID-19 pandemic, however, U.S. Bancorp is cheaper than it's been in years. Although it has rebounded significantly, it's still trading for a valuation not seen since the financial crisis. And while there's some uncertainty surrounding potential loan losses due to the current recession, this is a bank that should do well over the long run.

Square's (NYSE: SQ) stock price is currently in the $190 range, and it would have obviously been nice to have bought shares when they dipped into the low $30s in March. But as we've seen time and again throughout history, just because a stock's price has moved higher doesn't necessarily mean it's "expensive."

Square's business didn't suffer as much as you might expect from the shutdowns. Sure, there was a significant dip in payment processing volume as many of its merchants were forced to close, but the Cash App ecosystem added 6 million active users during the first half of the year, and this gives the company long-tailed revenue potential that is far more important than any single quarter of payment processing.

The stay-at-home economy was a growth tailwind for Pinterest (NYSE: PINS), as people were forced to stay in their homes and use their connected devices as their windows on the world. The social network's active user base grew by 39% from year-ago levels in the second quarter, with especially strong growth internationally.

There are three big reasons to consider Pinterest for a long-term investment. First, although its current user base of 416 million people is huge, the remaining growth potential is even larger. After all, Facebook has about eight times this many active users. Second, Pinterest's revenue mainly comes from advertising, and there is lots of room to grow revenue, especially internationally -- 77% of Pinterest's users are outside the U.S. and generate just a small fraction of the company's ad dollars. And finally, Pinterest has enormous potential in e-commerce. After all, it is a platform where people go to find ideas of things to build, buy, and create, making it a natural fit for sales conversion.

5 Winning Stocks Under $49
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!” And it’s true. And while Amazon and Netflix have had a good run, we think these 5 other stocks are screaming buys. And you can buy them now for less than $49 a share! Simply click here to learn how to get your copy of “5 Growth Stocks Under $49” for FREE for a limited time only.

While Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett and the rest of the company's stock picking team were disappointingly inactive during the market crash earlier this year, it appears they are finally ready to start putting some of Berkshire's enormous cash hoard to work. Over the past few month, Berkshire has acquired a natural gas business, added a couple billion dollars to its Bank of America stock position, invested billions of dollars in Japanese stocks, and more.

Berkshire isn't going to make you rich overnight, but it uses a time-tested business model that should continue to produce market-beating returns over the long run. If the stock market crashes again, and Berkshire takes a dive, it could be an excellent opportunity to get into this long-term compounder at a discount.

ALSO READ: Wow! Buffett Has 78% of His Portfolio in These 5 Stocks

There are certainly some lingering headaches for Walt Disney (NYSE: DIS) from the pandemic. While some of its theme parks are now open, they aren't generating anything close to their prepandemic revenue, and Disneyland in California is still closed. Plus, there's no telling when Disney's next billion-dollar blockbuster will actually hit theaters, and the company's cruise line remains nonoperational.

Having said that, the pandemic could end up being a long-term tailwind, as it gave Disney's streaming platform, Disney+, a major boost. How big? Disney had hoped to surpass 60 million subscribers by 2024, and it has achieved that target already, less than a year after launch. In short, Disney has built a stream of recurring revenue that should add billions to the top line for years to come, and the rest of its business should rebound nicely when the pandemic is over.

Companies that focus on credit card lending, like American Express (NYSE: AXP), took a beating as the pandemic worsened. And to be fair, there's a good reason -- during recessions and tough economic times, consumer defaults tend to spike, and they could lead to big losses for lenders.

However, American Express is a best-in-breed company. For one thing, as a closed-loop payment network, it also gets predictable revenue from swipe fees as consumers use its products. And American Express has a relatively affluent clientele compared with peers, which should help keep defaults in check. With shares still down 14% for 2020, American Express looks like a bargain now, and it could really be a bargain during the next market crash.

As a final thought, these stocks can be great additions to your portfolio regardless of what the market is doing. It's far more important to focus on buying great businesses than it is to try to get in at a discount. That said, when markets panic and stocks are trading for irrationally low prices, these seven stocks -- all of which I already own shares of -- are going to be at the top of my shopping list.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Matthew Frankel, CFP owns shares of American Express, Bank of America, Berkshire Hathaway (B shares), Pinterest, Square, STORE Capital, US Bancorp, and Walt Disney and has the following options: short September 2022 $155 calls on Square and short January 2021 $23 puts on Bank of America. The Motley Fool owns shares of and recommends Berkshire Hathaway (B shares), Facebook, Pinterest, Square, STORE Capital, and Walt Disney and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), long January 2021 $60 calls on Walt Disney, short October 2020 $125 calls on Walt Disney, and short December 2020 $210 calls on Berkshire Hathaway (B shares). The Motley Fool has a disclosure policy.