Top 10 Recession Proof Stocks for 2023

As the global economy faces increasing uncertainties and potential downturns, investors are on the lookout for recession proof stocks to fortify their portfolios. These stocks typically belong to companies that have stable business models and perform well during economic slumps. In this article, we will examine the top 10 recession proof stocks to consider for 2023, focusing on their performance during past recessions, market position, and growth prospects.

1. Walmart Inc. (WMT)

Walmart

Overview

Walmart Inc. (NYSE: WMT) is a leading discount retailer with a vast global presence. The company’s defensive nature and ability to cater to cost-conscious consumers make it one of the best recession proof stocks to invest in.

Recession Performance

Walmart has consistently demonstrated resilience during economic downturns. In the 2008 and 2020 recessions, the company outperformed the S&P 500 by 56.3% and 5.1%, respectively. Walmart’s inventory management and cost control capabilities, coupled with its focus on high-margin businesses such as advertising, health care, and subscription revenue, contribute to its strong performance during recessions.

Growth Prospects

Analysts predict 3.5% revenue growth for Walmart in fiscal 2024, with margin expansion driven by improvements in profitability from its high-margin businesses. With a “buy” rating and a $169 price target, Walmart is a top choice for recession proof stocks in 2023.

2. Abbott Laboratories (ABT)

Overview

Abbott Laboratories (NYSE: ABT) is a diversified healthcare products company with a global presence. Its strong balance sheet, innovative business model, and growing dividend make it an attractive recession proof stock.

Recession Performance

During the 2008 and 2020 recessions, Abbott Laboratories outperformed the S&P 500 by 33.6% and 9.8%, respectively. The company’s diversified portfolio and resilience in the face of economic downturns make it a top choice for investors seeking recession proof stocks.

Growth Prospects

While revenue is expected to drop by 8% in 2023 due to a decline in COVID-19 testing sales, analysts anticipate a rebound to 5% growth in 2024. With a “buy” rating and a $130 price target, Abbott Laboratories is a strong contender for recession proof stock investments in 2023.

3. Home Depot Inc. (HD)

Overview

Home Depot Inc. (NYSE: HD) is a leading home improvement retailer with a wide range of products and services. Its ability to capitalize on low mortgage rates and a booming housing market during recessions make it a prime choice for recession proof stocks.

Recession Performance

In the 2008 and 2020 recessions, Home Depot outperformed the S&P 500 by 23.9% and 5.3%, respectively. The company’s strong performance is attributed to its focus on professional customers, online sales growth, and ability to weather economic downturns.

Growth Prospects

Analysts expect long-term remodeling demand to boost Home Depot’s performance, with a “buy” rating and a $340 price target. As a solid investment option for recession proof stocks, Home Depot is poised for continued success in 2023.

4. Synopsys Inc. (SNPS)

Overview

Synopsys Inc. (NASDAQ: SNPS) is a leading provider of semiconductor chip testing and design services. Its platform enables engineers to design and test chips and software applications, making it a vital player in the global semiconductor industry.

Recession Performance

During the 2008 and 2020 recessions, Synopsys outperformed the S&P 500 by 9.9% and 70%, respectively. The company’s strong performance is attributed to its attractive valuation and the growing complexity of chip design, which drives demand for its services.

Growth Prospects

With a “strong buy” rating and a $477 price target, analysts project a three-year compound annual revenue growth of 15% for Synopsys. The company’s solid market position and growth potential make it a top choice for recession proof stocks in 2023.

5. Accenture PLC (ACN)

Overview

Accenture PLC (NYSE: ACN) is a global information technology services firm with a diversified consulting and services business. Its robust cash flow, capital returns, and defensive nature make it an ideal candidate for recession proof stock investments.

Recession Performance

Accenture outperformed the S&P 500 by 29.5% and 7.8% during the 2008 and 2020 recessions, respectively. The company’s strong performance is attributed to its diversified business model and ability to weather economic downturns.

Growth Prospects

With a “strong buy” rating and a $333 price target, Accenture is well-positioned to capitalize on its strong market position and deliver consistent returns for investors seeking recession proof stocks in 2023.

6. T-Mobile US Inc. (TMUS)

5G T-Mobile

Overview

T-Mobile US Inc. (NASDAQ: TMUS) is the second-largest wireless provider in the United States. The company’s consistent growth, even during challenging economic conditions, makes it a strong contender for recession proof stocks.

Recession Performance

T-Mobile outperformed the S&P 500 by 14.8% and 55.7% during the 2008 and 2020 recessions, respectively. The company’s aggressive pricing strategy and advanced 5G network have allowed it to consistently gain market share and deliver strong performance during economic downturns.

Growth Prospects

Analysts project 2.2% revenue growth for T-Mobile in 2023 and 4.2% growth in 2024. With a “strong buy” rating and a $175 price target, T-Mobile is a top choice for investors seeking recession proof stocks in 2023.

7. Walt Disney Co. (DIS)

Overview

Walt Disney Co. (NYSE: DIS) is one of the largest and most diversified media and entertainment companies in the world. Its extensive portfolio of assets, including theme parks, cruise lines, movie and TV studios, and streaming services, make it a top choice for recession proof stocks.

Recession Performance

During the 2008 and 2020 recessions, Walt Disney outperformed the S&P 500 by 8.8% and 9%, respectively. The company’s diversified business model and strong demand across various economic conditions make it a solid option for recession proof stock investments.

Growth Prospects

With a “buy” rating and a $135 price target, analysts project 9.5% revenue growth for Walt Disney in fiscal 2023. The company’s strong market position and growth potential make it a top choice for investors seeking recession proof stocks in 2023.

8. Costco Wholesale Corporation (COST)

Overview

Costco Wholesale Corporation (NASDAQ: COST) is a leading membership-only warehouse club with a global presence. Its low price offerings and consistent performance during recessionary periods make it an attractive option for recession proof stock investments.

Recession Performance

Costco’s business model has proven to be resilient during economic downturns, with the company consistently delivering strong results and maintaining its market position.

Growth Prospects

With a robust membership base and a focus on cost-effective offerings, Costco is well-positioned to capitalize on consumer trends during economic downturns. As a top choice for recession proof stocks in 2023, Costco offers investors an opportunity for steady growth and reliable performance.

9. Bank of America Corporation (BAC)

Overview

Bank of America Corporation (NYSE: BAC) is one of the largest banking institutions in the United States, offering a comprehensive range of financial products and services. Its strong balance sheet and diversified revenue streams make it an attractive choice for recession proof stock investments.

Recession Performance

Bank of America performed relatively well during the 2008 financial crisis, and its strong capital position and ability to weather economic downturns make it a solid option for investors seeking recession proof stocks.

Growth Prospects

Bank of America’s diversified business model and focus on cost management position it well for growth during challenging economic conditions. With a solid market position and growth potential, Bank of America is a top choice for recession proof stocks in 2023.

10. UnitedHealth Group Incorporated (UNH)

Overview

UnitedHealth Group Incorporated (NYSE: UNH) is a diversified health care company providing a broad spectrum of products and services through its UnitedHealthcare and Optum segments. Its defensive nature and consistent performance make it an attractive choice for recession proof stock investments.

Recession Performance

UnitedHealth Group’s diversified business model and strong market position have allowed the company to deliver consistent results even during periods of economic downturn.

Growth Prospects

With a focus on innovation and cost management, UnitedHealth Group is well-positioned to capitalize on the growing demand for health care services during economic downturns. As a top choice for recession proof stocks in 2023, UnitedHealth Group offers investors an opportunity for steady growth and reliable performance.

Conclusion

As we approach a potential downturn in 2023, it is crucial for investors to diversify their portfolios with recession proof stocks to minimize risks and maintain steady returns. The companies mentioned above have demonstrated resilience during past recessions and offer attractive growth prospects for the coming years. By investing in these best recession proof stocks, investors can navigate the uncertain economic landscape and position themselves for long-term success.

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