When the Fed announced the biggest rate hike since 1994, the market did not receive the news well.
On Thursday, the day after the announcement, the S&P 500 fell 3.2%. From year to year, the benchmark has fallen more than 23%.
But the stock market downturn is not the only thing to worry about, as Wells Fargo now sees the US economy slipping into a mild downturn in mid-2023.
“In our view, the recession will be more or less equivalent in size and duration to the 1990-1991 recession. “This recession lasted for two quarters with a sharp drop in real GDP of 1.4%,” the bank’s chief economist Jay Bryson wrote in a note Wednesday.
The good news? Wells Fargo recently unveiled a portfolio of stocks resistant to the recession – here is a look at three that will help you play defense.
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Do you want to escape the sad stock market? Unfortunately, “Cash is not a safe investment,” says Ray Dalio, founder of the largest hedge fund in the world. “It’s not a safe place because it will be taxed by inflation.” With the consumer price index reaching a 40-year high of 8.6% in May, it should get creative to find strong returns.
It is easy to see why Colgate-Palmolive belongs to a recession-resistant portfolio.
The company is deeply entrenched in its operational markets, including oral care, personal care, pet nutrition and home care.
In particular, the leading Colgate brand has by far the largest share of 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 difficult times. This simple truth has led to a long and solid history of returning cash to investors.
The company has increased its earnings for 60 consecutive years.
Businesses continue to grow: In the 1st quarter, sales of organic products at Colgate-Palmolive increased by 4% year on year.
Paying quarterly dividends of 47 cents per share, the CL share offers an annual yield of 2.5%.
Formerly known as Waste Management, WM claims to be the largest provider of environmental waste management solutions 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’s essential: Whether the economy is booming or in recession, people still need someone to come and pick up their rubbish.
The company was founded in 1968 and still cleans to this day.
In the first quarter, WM revenue grew 13% year-on-year to $ 4.66 billion. Adjusted earnings per share stood at $ 1.29 for the quarter, up 22% from a year earlier.
WM currently pays quarterly dividends of 65 cents per share – 13% higher than it paid a year ago. This makes 2022 the 19th consecutive year that the company increased its earnings.
The share offers an annual return of 1.9%.
Johnson & Johnson (JNJ)
With established positions in the consumer health, pharmaceutical and medical devices market, the Johnson & Johnson healthcare giant has delivered regular returns to investors across all business circles.
Many of the company’s consumer health brands – such as Tylenol, Band-Aid and Listerine – are so widely used as abbreviations for their entire product line. In total, JNJ has 29 products each capable of generating over $ 1 billion in annual sales.
Not only does Johnson & Johnson record recurring annual profits, but it also increases them consistently: Over the past 20 years, Johnson & Johnson Adjusted Profits have grown at an average annual rate of 8%.
The stock has been on the rise for decades. And it’s showing its resilience again in 2022: While the broad market has entered the bear area, JNJ has fallen just 1.2% year-on-date.
JNJ also announced its 60th consecutive annual dividend increase in April and now stands at 2.7%.
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This article provides information only and should not be construed as advice. It is provided without any guarantee.