A recession can be an unnerving time for investors. Stock prices may be volatile and the overall market climate unpredictable, but that doesn’t mean you should avoid investing altogether. With careful planning and research, it is possible to make wise investments during a recession. So what stocks should you invest in when the economy isn’t doing so hot? Let’s explore some recession-proof stocks.
What Are Recession-Proof Stocks?
Recession-proof stocks are those that are likely to remain profitable during an economic downturn. These companies tend to have a proven track record of success during times of recession, with products and services that people need no matter the state of the economy. Examples include essential items like food, healthcare, and utilities.
When looking for recession-proof stocks, it’s important to consider the company’s financial stability as well as its industry performance over time. Look at companies that have consistently grown through recessions in the past and focus on those with strong fundamentals and good liquidity ratios. With this in mind, here are three recession-proof stocks for your list in the stock market today.
Recession-Proof Stocks To Watch Now
NextEra Energy (NEE Stock)
Leading off, NextEra Energy Inc. (NEE) is a leading U.S. energy company that is focused on generating clean, renewable energy through a variety of sources, including wind and solar power. The company operates through two primary business segments: NextEra Energy Resources, which is responsible for generating and selling electricity. While NextEra Energy Services provides energy-related products and services to commercial and industrial customers.
Back in October, NextEra Energy announced better-than-expected financial results for Q3 2022. Diving in, the energy company reported third-quarter 2022 earnings of $0.85 and revenue of $6.7 billion. This is versus Wall Street’s consensus estimates for Q3 2022 which were earnings of $0.79 per share on revenue of $5.6 billion. As a result, NEE notched in a 53.8% revenue increase versus the same period, in 2021.
In 2022 thus far, shares of NEE stock are down by 6.38%, still outperforming the broader markets. Meanwhile, during early morning trading on Friday, NEE stock is trading at $85.81 a share.
[Read More] What Happens To Stocks During A Recession?
PepsiCo Inc. (PEP Stock)
Next, PepsiCo Inc. (PEP) is a multinational food and beverage company that is known for its iconic brands such as Pepsi, Mountain Dew, Lay’s, and Gatorade. In addition to its well-known consumer brands, PepsiCo also has a significant presence in the food service industry through its Frito-Lay, Quaker, and Tropicana brands.
In recent news, last week the company announced that it will announce its 4th quarter and full-year 2022 ending December 31 financial results on Thursday, February 9, 2023. To briefly recap, in Q3 2022 PepsiCo reported better-than-expected earnings of $1.97 per share and revenue of $22.0 billion.
Year-to-date, shares of PEP stock are up 4.20%, outperforming the broader markets so far in 2022. Additionally, during Friday’s pre-market trading action, PepsiCo stock is trading slightly lower by 0.69% at $179.00 a share.
General Mills (GIS Stock)
Last but not least, General Mills Inc. (GIS) is a multinational food company that is known for its iconic brands such as Cheerios, Betty Crocker, Pillsbury, and Yoplait. The company’s products include a range of packaged foods, including cereals, snack bars, baking mixes, frozen pizzas, and more.
At the end of last month, the company announced that it will release its Q2 2023 financial results on December 20, 2022. To refresh your memory, during Q1 2023 General Mills announced earnings of $1.11 per share, along with revenue of $4.7 billion. Additionally, as it stands today, GIS offers its shareholders an annual dividend yield of 2.48%.
Moving along, in 2022 so far, General Mills stock has advanced by 29.27% year-to-date, which outperforms the broader markets. Meanwhile, during Friday’s premarket trading session, shares of GIS stock are trading modestly higher by 0.61% at $87.48 a share.