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Recessionary fears persist well into 2024 in the United States, following the slowing of GDP growth to 1.6% in Q1, well below expectations. Against this backdrop and stubborn inflation, the Federal Reserve left interest rates unchanged once again in its May 1 meeting. On the other side of the Atlantic, the EU GDP numbers were slightly better, increasing 0.3% in Q1 2024 from the previous quarter. But here too, inflation stayed obstinately at 2.4% in April.
Whether the world’s most advanced economies are able to avert recession or not, it is still a good idea to diversify your portfolio to protect it against any slump in the global economy. The so-called recession-resistant industries have historically weathered such storms much better than others. They are also called defensive industries or stocks, as they help shield your investment portfolio against sudden and sharp downturns.
So, here’s a look at industries and stocks that are widely considered recession resistant.
Even when consumers tighten their budgets, they cannot stop spending on basic necessities, like groceries, household cleaning products, and toiletries. Among the most prominent consumer staple stocks are:
The world’s largest company by revenue operates hypermarkets, discount stores, and grocery stores. eCommerce sales have surged 23% globally to over $100 billion in fiscal 2024.
| NYSE: | WMT |
| Market Cap: | $474.22 billion |
| PE Ratio: | 11.4 (as of May 2024) |
| 1-year Consensus Target Estimate: | $65.97 |
The US multi-national corporation, founded in 1837, is stronger than ever after streamlining its operations by restructuring, disposing off non-core brands and cutting costs.
| NYSE: | PG |
| Market Cap: | $385.65 billion |
| PE Ratio: | 26.35 |
| 1-year Consensus Target Estimate: | $170.13 |
The US-based beverage company has the advantage of a diversified portfolio that includes food and snacks. It recently achieved the status of Dividend King having raised its dividend for 50 consecutive years.
| NASDAQ: | PEP |
| Market Cap: | $240.79 billion |
| PE Ratio: | 29.1 |
| 1-year Consensus Target Estimate: | $191.25 |
The British-Dutch company, headquartered in London, is parent to some of the most iconic global brands, including Ben & Jerry’s and Dove. Although it has been plagued by problems, the company is working on streamlining its operations to strengthen the accountability of its key leaders.
| LON, ULVR and NYSE: | UL |
| Market Cap: | $129.95 billion |
| PE Ratio: | 25.9 |
| 1-year Consensus Target Estimate: | $48.00 |
The US-based multinational consumer products company has a wide portfolio of personal care, healthcare, household and veterinary products. The company recorded its fifth consecutive year of organic sales growth that met or beat expectations in 2023.
| NYSE: | CL |
| Market Cap: | $75.54 billion |
| PE Ratio: | 47.1 |
| 1-year Consensus Target Estimate: | $95.40 |
During a challenging economic climate, people tend to work harder to hold onto their jobs. They may even increase their spending on healthcare and personal care products. Negative sentiment may also encourage people to spend more on insurance.
This American pharma company generates revenues from around 125 countries. It’s stock has risen almost 76% in the 12 months from May 2023, outperforming the S&P 500.
| NYSE: | LLY |
| Market Cap: | $718.69 Billion |
| PE Ratio: | 143.067 |
| 1-year Consensus Target Estimate: | $845.60 |
One of the world’s largest pharma companies, Merck was founded in 1891. Following its 6% YoY revenue growth in Q4 2024 and the acquisition of Prometheus Bioscience, the pharma giant is well positioned to continue to outperform in 2024.
| NYSE: | MRK |
| Market Cap: | $324.89 Billion |
| PE Ratio: | 143.58 |
| 1-year Consensus Target Estimate: | $135.28 |
The spin-off from Abbott Laboratories is recognised as the sixth largest biomedical company by revenue. The company’s growth in 2024 is expected to be driven by its new immunology drugs, Skyrizi and Rinvoq, which will also help mitigate headwinds from the Humira exclusivity loss.
| NYSE: | ABBV |
| Market Cap: | $284.74 Billion |
| PE Ratio: | 43.4 |
| 1-year Consensus Target Estimate: | $186.17 |
The US-based multi-national healthcare and medical devices company is a Dividend Aristrocrat. It raised its dividend in December 2023 by 7.8% .
| NYSE: | ABT |
| Market Cap: | $183.79 Billion |
| PE Ratio: | 35.7 |
| 1-year Consensus Target Estimate: | $128.83 |
Founded in 1984, Danaher manufactures and markets medical, industrial, and commercial products. The company’s outlook has been improving following its Abcam acquisition and spinoff of Veralto.
| NYSE: | DHR |
| Market Cap: | $182.83 Billion |
| PE Ratio: | 30.8 |
| 1-year Consensus Target Estimate: | $274.80 |
The second largest cosmetics company in the world, Estée Lauder manufactures and markets make-up, perfume, skincare and hair care products. Its positioning as a luxury brand is driving market share gains in China and strong profit margins.
| NYSE: | EL |
| Market Cap: | $48.37 Billion |
| PE Ratio: | 82.7 |
| 1-year Consensus Target Estimate: | $159.32 |
Many of these large companies offer products of several brands that span different consumer budgets and preferences. This makes them more resilient against demand shortfalls.
Utilities are necessities that people continue to spend on. These sectors also benefit from government support and subsidies during economic slowdowns, which gives them an extra layer of protection.
The largest electric utility company by market cap, NextEra has a generating capacity of about 58 GW. It also has industry-leading potential for renewable energy growth and a stable dividend.
| NYSE: | NEE |
| Market Cap: | $141.45 Billion |
| PE Ratio: | 18.2 |
| 1-year Consensus Target Estimate: | $71.09 |
The largest publicly traded water and wastewater utility in the US, American Water Works expects its EPS to grow at a CAGR of 7% to 9% from 2023 to 2027. If this occurs, it will make the company one of the fastest-growing utilities in America.
| NYSE: | AWK |
| Market Cap: | $24.54 Billion |
| PE Ratio: | 25.4 |
| 1-year Consensus Target Estimate: | $133.00 |
There are major indices that track the performance of these industries. For instance, the S&P 500 Utilities tracks the stock performance of the top 500 utilities majors.
High transaction volumes (cross-border and domestic), an impressive percentage of processed transactions and data processing will fuel Visa’s growth. With 15.3% y-o-y growth, the company beat earnings expectations in all quarters from Q2, 2023 to Q1 2024, with an average surprise of 5.2%.
| NYSE: | V |
| Market Cap: | $549.25 Billion |
| PE Ratio: | 30.67 |
| 1-year Consensus Target Estimate: | $309.75 |
GM is one of the world’s largest automobile makers and owns the largest share of the US automobile market in 2023, at 16.2%. The company’s EBIT grew 44.9% y-o-y in Q1 2024. Due to an average surprise factor of about 20%, analysts revised their expectations for the stock for 2024 upwards.
| NYSE: | GM |
| Market Cap: | $50.30 Billion |
| PE Ratio: | 6.17 |
| 1-year Consensus Target Estimate: | $53.74 |
Although this is not an industry, billions of dollars are spent every year on products that accompany our celebrations and make us feel good. These include energy drinks, other beverages, snacks, and cosmetics.
Owner of the world’s leading soda brand is also considered a safe blue-chip stock. The company has raised its dividend annually for the past 62 consecutive years.
| NYSE: | KO |
| Market Cap: | $267.25 Billion |
| PE Ratio: | 24.9 |
| 1-year Consensus Target Estimate: | $65.87 |
The Swiss multi-national food and drink processing conglomerate is also the world’s largest publicly traded food company since 2014. The stock has returned 31% over the past five years.
| SWX, NESN and OTC: | NSRGY |
| Market Cap: | $264.53 Billion |
| PE Ratio: | 23.2 |
| 1-year Consensus Target Estimate: | $118.29 |
With AI expected to continue to stay in the limelight, these tech stocks may prove to be great buys for 2024:
The OTT brand’s tier-based subscription model seems to be paying off with Netflix reporting record Q1 2024 operating margin and subscriber growth. It issued a strong guidance for Q2 2024 since the company expects its investments in local-language content to pay off.
| NASDAQ: | NFLX |
| Market Cap: | $278.69 Billion |
| PE Ratio: | 53.76 |
| 1-year Consensus Target Estimate: | $656.64 |
The communications company executed 5G expansion and wireless coverage, which drove its growth through 2023. It is now ready to fully unleash the power of the network. The market is optimistic regarding T-Mobile’s expansion into internet services to drive growth.
| NASDAQ: | TMUS |
| Market Cap: | $194.52 Billion |
| PE Ratio: | 23.95 |
| 1-year Consensus Target Estimate: | $188.15 |
With a wide family of “social” apps, the technology giant is accelerating its AI push. It entered the $1 trillion club in Q1 2023 and is expected to continue to grow, driven by revenues from advertisements across platforms.
| NASDAQ: | META |
| Market Cap: | $ 1.21 Trillion |
| PE Ratio: | 32.16 |
| 1-year Consensus Target Estimate: | $1.213 Trillion |
*All statistics on this page can be found at https://finance.yahoo.com/
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