The year 2022 has been rough for investors. Year-to-date, the S&P 500 has plunged over 20%.
But a stock market downturn isn’t the only thing to worry about, as Wells Fargo now sees the U.S. economy slipping into a mild recession in mid 2023.
“In our view, the recession will be more or less equivalent in magnitude and duration to the downturn of 1990-1991. That recession lasted for two quarters with a peak-to-trough decline in real GDP of 1.4%,” the bank’s chief economist Jay Bryson wrote in a note last month.
The good news? Wells Fargo recently unveiled a portfolio of recession-resistant stocks — here’s a look at three to help you play defense.
It’s easy to see why Colgate-Palmolive belongs in a recession-resistant portfolio.
The company is deeply entrenched in its operating markets, including oral care, personal care, pet nutrition and home care.
Notably, its leading brand Colgate has by far the largest share in the toothpaste market worldwide. And thanks to brands like Softsoap and Palmolive, the company is also a dominant player in the liquid soap market.
No one is going to stop buying soap or toothpaste in tough times. That simple truth has led to a long and consistent track record of returning cash to investors.
The company has increased its payout for 60 consecutive years.
Business is still growing: In Q1, organic sales at Colgate-Palmolive increased 4% year-over-year.
Paying quarterly dividends of 47 cents per share, CL stock offers an annual yield of 2.3%.
Formerly known as Waste Management, WM brands itself the largest comprehensive waste management environmental solutions provider in North America. It says it provides collection, recycling and disposal services to more than 20 million residential, commercial, industrial and municipal customers.
Waste management is not an exciting business, but it is an essential one: Whether the economy is booming or in a recession, people still need someone to come and collect their garbage.
The company was founded in 1968 and is still cleaning up today.
In Q1, WM’s revenue grew 13% year over year to $4.66 billion. Adjusted earnings per share came in at $1.29 for the quarter, up 22% from the year-ago period.
WM currently pays quarterly dividends of 65 cents per share — 13% higher compared to what it was paying a year ago. That makes 2022 the 19th consecutive year that the company has raised its payout.
The stock offers an annual yield of 1.7%.
Johnson & Johnson (JNJ)
With established positions in consumer health, pharmaceuticals and the medical devices markets, health-care giant Johnson & Johnson has delivered regular returns to investors throughout economic cycles.
Many of the company’s consumer health brands — such as Tylenol, Band-Aid and Listerine — are so ubiquitous they’re used as shorthand for their entire product category. In total, JNJ has 29 products each capable of generating over $1 billion in annual sales.
Not only does Johnson & Johnson post recurring annual profits, but it also grows them consistently: Over the past 20 years, Johnson & Johnson’s adjusted earnings have increased at an average annual rate of 8%.
The stock has been trending up for decades. And it is demonstrating its resilience again in 2022: While the broad market has entered bear territory, JNJ is actually up 3% year to date.
JNJ also announced its 60th consecutive annual dividend increase in April and now yields 2.5%.
What to read next
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
BofA Securities maintains Amazon.com at ‘buy’ with a price target of $154.00
Six people in critical condition, one still missing after Paris blast – prosecutor
© Reuters. French firefighters and rescue forces work after several buildings on fire following a gas explosion in the fifth arrondissement of Paris, France, June 21, 2023. REUTERS/Gonzalo Fuentes
PARIS (Reuters) – Six people remained in a critical condition and one person was believed still missing on Thursday, one day after a blast ripped through a street near Paris’ historic Latin Quarter, the city’s public prosecution office said. “These figures may still change,” prosecutor Maylis De Roeck told Reuters in a text message, adding that around 50 people had been injured in the blast, which set buildings ablaze and caused the front of one to collapse onto the street. Of two people initially believed missing, one has been found in hospital and is being taken care of, the prosecutor said, adding: “Searches are ongoing to find the second person.” Authorities have not yet said what caused the explosion, which witnesses said had followed a strong smell of gas at the site. The explosion led to scenes of chaos and destruction in the historic Rue Saint Jacques, which runs from the Notre-Dame de Paris Cathedral to the Sorbonne University, just as people were heading home from work. It also destroyed the facade of a building housing the Paris American Academy design school popular with foreign students. Florence Berthout, mayor of the Paris district where the blast occurred, said 12 students who should have been in the academy’s classrooms at the time had fortunately gone to visit an exhibition with their teacher.
“Otherwise the (death toll) could have been absolutely horrific,” Berthout told BFM TV. She said three children who had been passing by at the time were among the injured, although their lives were not in danger.
4 big analyst cuts: Alcoa & DigitalOcean shares drop on downgrades
Here is your Pro Recap of the biggest analyst cuts you may have missed since yesterday: downgrades at Alcoa, DigitalOcean, Teleflex, and Xcel Energy.InvestingPro subscribers got this news in rapid fire. Never be left in the dust again.Alcoa stock drops on Morgan Stanley downgrade Alcoa (NYSE:) shares fell more than 3% pre-market today after Morgan Stanley downgraded the company to Underweight from Equalweight and cut its price target to $33.00 from $43.00, as reported in real time on InvestingPro.The firm sees a significant decline in consensus estimates, and as negative earnings revisions materialize, it believes the stock will face downward pressure and underperform.The analyst’s estimates for EBITDA in Q2, 2023, and 2024 are substantially lower than the consensus. The stock is currently trading above its historical average. The firm said its downward revisions in earnings estimates and price target are attributed to the company’s high operating leverage to aluminum prices.DigitalOcean stock plunges on downgradePiper Sandler downgraded DigitalOcean (NYSE:) to Underweight from Neutral with a price target of $35.00. As a result, shares plunged more than 5% pre-market today.The company reported its last month, with revenue beating the consensus estimate, while EPS coming in worse than expected. Furthermore, the company provided a strong outlook, which was above the Street estimates.2 more downgradesTeleflex (NYSE:) shares fell more than 3% yesterday after Needham downgraded the company to Hold from Buy, noting that UroLift expectations may still be too high.According to Needham, their checks indicate that urologists are reducing their use of UroLift due to its retreatment rates, reimbursement cuts, and increasing use of competing procedures. This is also supported by their Google Trends data analysis, which indicates decreasing search interest in UroLift.BMO Capital downgraded Xcel Energy (NASDAQ:) to Market Perform from Outperform and cut its price target to $64.00 from $69.00 to reflect the lower-than-expected terms of the company’s regulatory settlement in Colorado.Amid whipsaw markets and a slew of critical headlines, seize on the right timing to protect your profits: Always be the first to know with InvestingPro.Start your free 7-day trial now.
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