Preparing for the Worst: 3 Resilient Stocks to Buy Before the Next Market Crash (2024)

The U.S. economy is in a precarious situation at the moment — an unusual balance between rampant inflation and investor confidence. However, to cool down inflation, policymakers are hinting at not lowering interest rates. Indeed, economists are being faced with a problem, having to balance fiscal and monetary policy to lower inflation while avoiding a potential recession.

But that’s not all. This year will also see elections in multiple major global economies, including the United States. That will only increase potential market volatility.

In case a recession or downturn does come, then, investors should look for resilient stocks to buy to help pad their portfolios. The companies that provide essential (or near-essential) services will be least affected by a recession, as their sales will remain relatively stable. To me, these three companies fit that description, making them compelling yet dependable picks.

Resilient Stocks to Buy: CVS Health (CVS)

Operating in a sector that profits off of necessities, the risk of a recession significantly affecting the company’s revenue — and thus, valuation — is likely negligible. This is reflected in the firm’s financials. Despite fiscal 2020 to fiscal 2021 being a period of economic weakness, revenue actually grew by $23 billion then, or about 8.6%. This shows that despite the threat of a downturn, CVS stock can hold steady, making it one of the resilient stocks to buy.

Procter & Gamble (PG)

Procter & Gamble (NYSE:PG) is a multinational conglomerate that offers services in five key areas: Beauty, Grooming, Health Care, Fabric & Home Care and Baby, Feminine & Family Care. The company owns a variety of household names such as Tide, Head & Shoulders, Gillette and Bounty, among others.

PG has seen year-over-year (YOY) quarterly earnings growth of 10.50% according to Yahoo Finance, with an operating margin of 22.94% and a profit margin standing at 17.99%. The firm also maintains an astounding $19.43 billion in operating cash flow. These financials are one reason why many analysts rate shares as a “buy” or “overweight.”

While the nature of the consumer defensive sector makes it inherently recession-resistant, due to necessities like health care and grooming, the consumer goods sector is still expected to grow at a compound annual growth rate (CAGR) of 3.22% from 2024 to 2028. Belonging to a need-based sector only furthers the case for PG stock being a reliable buy.

Resilient Stocks to Buy: Coca-Cola (KO)

Last up, Coca-Cola (NYSE:KO) is a multinational beverage company that sells sodas, energy drinks, coffee and water, among other products. The firm had revenue of $45.75 billion in fiscal 2023, with a current valuation of $267 billion.

As of this writing, KO stock is up nearly 4% YTD, with analyst confidence remaining high. Indeed, KO has received multiple “overweight” and “buy” ratings from several financial institutions. It also has 4,194 institutional owners according to Fintel, with “4130 long only,” indicating strong sector confidence.

The nature of Coca-Cola’s services makes it resilient in the face of market trends.​​ This is reflected in its dividend. Indeed, despite multiple years of economic discomfort over the last few decades, KO stock’s annual dividend increased for the 62nd consecutive year in February. Only a company made to weather tough times can increase its dividend through multiple recessions, making the case for KO as one of the resilient stocks to buy.

On the date of the publication, Achintya Pasricha did not hold (either directly or indirectly) any positions in the securities mentioned in thisarticle. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Achintya Pasricha is a self-taught investor who has recently started to publish articles on a freelance basis.