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4 Top Recession-Proof Stocks That Are Worth a Buy Right Away
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Federal Reserve Chair Jerome Powell acknowledged in the recently concluded two-day policy meeting that the current banking turmoil in the United States has led to tighter credit conditions, and in all likelihood, may impact economic activities.
One of the most prominent lenders for tech start-ups, the Silicon Valley Bank’s fate was doomed following run-on deposits, which in due course curtailed its ability to raise fresh capital. The bank collapsed this month, leading to a contagion effect and the consequent shutting down of other prominent banks, such as Signature Bank and First Republic Bank.
While the banking crisis heightened worries about economic growth, the Fed’s tenth interest rate hike in a row in its latest meeting may further dent consumer outlays and undeniably increase the cost of borrowing. The Fed raised interest rates by another 25 basis points, taking the Fed’s funds rate to a range of 5-5.25%. This is, by the way, the highest target range since August 2007.
In reality, economic growth in the United States has already started to slow down. In the first three months of this year, economic growth weakened due to the Fed’s aggressive monetary policy and stubbornly high inflation. A decline in inventory investment on an expectation of weaker demand this year, in particular, slowed down economic growth.
According to the Commerce Department, gross domestic product (GDP) increased at an annualized pace of 1.1% in the first quarter, less than economists’ expectations of growth of 2%. Let us not forget, GDP had climbed 2.6% in the fourth quarter of last year.
What’s more, the Conference Board’s Leading Economic Index (LEI), known as the index of future economic activity, dropped to 108.4 in March from February’s revised reading of 109.7, its 12th successive monthly drop and also the lowest reading since November 2020.
Furthermore, a decline in orders of durable goods, a reduction in construction activities, and a freight recession of late all signify that the United States is worryingly close to a recession, something that doesn’t bode well for the stock market.
However, some stocks tend to do well amid economic downturns. These stocks are known for being recession-proof and belong to the consumer staples and utilities sectors. This is because the demand for personal care products, food, electricity, gas, and water remains unaltered under any economic situation since they all are essentials.
We have, thus, selected four stocks from the aforesaid areas that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth, and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coty (COTY - Free Report) manufactures, markets and distributes beauty products worldwide. The company, currently, has a Zacks Rank #1 and a VGM Score of B.
The Zacks Consensus Estimate for its next-quarter earnings has moved up 33.3% over the past 60 days. COTY’s expected earnings growth rate for the current year is 32.1%.
Church & Dwight Co. (CHD - Free Report) develops, manufactures, and markets a broad range of household, personal care, and specialty products. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.6% over the past 60 days. CHD’s expected earnings growth rate for the current year is 4.4%.
Hershey (HSY - Free Report) manufactures pantry items like baking ingredients, toppings, and beverages; gum and mint refreshment products; snack bites and mixes, as well as spreads. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.7% over the past 60 days. HSY’s expected earnings growth rate for the current year is 11%.
Portland General Electric (POR - Free Report) is a vertically integrated electric utility that serves residential, commercial, and industrial customers in Oregon. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 3.1% over the past 60 days. POR’s expected earnings growth rate for next year is 13.7%.
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4 Top Recession-Proof Stocks That Are Worth a Buy Right Away
Federal Reserve Chair Jerome Powell acknowledged in the recently concluded two-day policy meeting that the current banking turmoil in the United States has led to tighter credit conditions, and in all likelihood, may impact economic activities.
One of the most prominent lenders for tech start-ups, the Silicon Valley Bank’s fate was doomed following run-on deposits, which in due course curtailed its ability to raise fresh capital. The bank collapsed this month, leading to a contagion effect and the consequent shutting down of other prominent banks, such as Signature Bank and First Republic Bank.
While the banking crisis heightened worries about economic growth, the Fed’s tenth interest rate hike in a row in its latest meeting may further dent consumer outlays and undeniably increase the cost of borrowing. The Fed raised interest rates by another 25 basis points, taking the Fed’s funds rate to a range of 5-5.25%. This is, by the way, the highest target range since August 2007.
In reality, economic growth in the United States has already started to slow down. In the first three months of this year, economic growth weakened due to the Fed’s aggressive monetary policy and stubbornly high inflation. A decline in inventory investment on an expectation of weaker demand this year, in particular, slowed down economic growth.
According to the Commerce Department, gross domestic product (GDP) increased at an annualized pace of 1.1% in the first quarter, less than economists’ expectations of growth of 2%. Let us not forget, GDP had climbed 2.6% in the fourth quarter of last year.
What’s more, the Conference Board’s Leading Economic Index (LEI), known as the index of future economic activity, dropped to 108.4 in March from February’s revised reading of 109.7, its 12th successive monthly drop and also the lowest reading since November 2020.
Furthermore, a decline in orders of durable goods, a reduction in construction activities, and a freight recession of late all signify that the United States is worryingly close to a recession, something that doesn’t bode well for the stock market.
However, some stocks tend to do well amid economic downturns. These stocks are known for being recession-proof and belong to the consumer staples and utilities sectors. This is because the demand for personal care products, food, electricity, gas, and water remains unaltered under any economic situation since they all are essentials.
We have, thus, selected four stocks from the aforesaid areas that flaunt a Zacks Rank #1 (Strong Buy) or 2 (Buy). The search was also narrowed down with a VGM Score of A or B. Here V stands for Value, G for Growth, and M for Momentum; the score is a weighted combination of these three metrics. Such a score allows you to eliminate the negative aspects of stocks and select winners. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coty (COTY - Free Report) manufactures, markets and distributes beauty products worldwide. The company, currently, has a Zacks Rank #1 and a VGM Score of B.
The Zacks Consensus Estimate for its next-quarter earnings has moved up 33.3% over the past 60 days. COTY’s expected earnings growth rate for the current year is 32.1%.
Church & Dwight Co. (CHD - Free Report) develops, manufactures, and markets a broad range of household, personal care, and specialty products. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.6% over the past 60 days. CHD’s expected earnings growth rate for the current year is 4.4%.
Hershey (HSY - Free Report) manufactures pantry items like baking ingredients, toppings, and beverages; gum and mint refreshment products; snack bites and mixes, as well as spreads. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 0.7% over the past 60 days. HSY’s expected earnings growth rate for the current year is 11%.
Portland General Electric (POR - Free Report) is a vertically integrated electric utility that serves residential, commercial, and industrial customers in Oregon. The company, currently, has a Zacks Rank #2 and a VGM Score of B.
The Zacks Consensus Estimate for its current-year earnings has moved up 3.1% over the past 60 days. POR’s expected earnings growth rate for next year is 13.7%.