What stocks do well in a recession?
During a recession, investors typically look for defensive stocks—companies that provide essential goods and services people need regardless of the economy. These stocks tend to be more stable and less sensitive to economic downturns. Here are some types of stocks and sectors that historically perform well during recessions:
🏥 1. Healthcare
People still need medication and medical care in tough times.
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Examples: Johnson & Johnson (JNJ), Pfizer (PFE), UnitedHealth Group (UNH), Merck (MRK)
🛒 2. Consumer Staples
These companies sell everyday items like food, beverages, and household products.
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Examples: Procter & Gamble (PG), Coca-Cola (KO), PepsiCo (PEP), Walmart (WMT), Colgate-Palmolive (CL)
⚡ 3. Utilities
Electricity, water, and gas are essential services. Utility companies usually maintain steady revenue.
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Examples: Duke Energy (DUK), Dominion Energy (D), NextEra Energy (NEE)
🏠 4. Discount Retailers
Consumers often trade down to cheaper alternatives during recessions.
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Examples: Dollar General (DG), Dollar Tree (DLTR), Costco (COST), Walmart (WMT)
🖥️ 5. Telecommunications
People continue using phones and internet regardless of the economy.
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Examples: Verizon (VZ), AT&T (T), T-Mobile (TMUS)
🛡️ 6. Dividend Aristocrats
Companies that have a long history of paying and increasing dividends—typically stable and well-established.
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Examples: 3M (MMM), Johnson & Johnson (JNJ), Coca-Cola (KO), McDonald's (MCD)
Honorable Mention: Gold & Precious Metals
While not stocks per se, companies involved in mining (like Newmont Corp or Barrick Gold) often benefit as gold is seen as a hedge against economic uncertainty.
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