Recession-Proof Riches: 3 Stocks to Buy and Hold Through Any Crisis

Stocks to buy

There are some stocks to buy for a recession that should be on every investors’ radar. It doesn’t matter whether you are bearish or bullish on the economy in general. Owning shares in these stocks can significantly improve the stability and safety of your portfolio, acting as a reliable anchor that can weather the strongest of economic storms.

Furthermore, most of these stocks to buy for a recession also have other qualities that make them durable to hold for the long-run. Most have strong economic moats, pay substantial dividends, and sell products that are popular throughout the economic cycle. These companies can give you some security and peace of mind while you take on more risk elsewhere.

So here are three stocks to buy for a recession that you should consider adding to your portfolio. Don’t overlook these companies or your long-term returns may suffer.

PepsiCo (PEP) 

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PepsiCo (NASDAQ:PEP) stands strong with its impressive dividend track record, and a dividend yield of 3.1% at the time of writing.

PEP projects 4% organic revenue growth for the full year 2024 and at least 8% core constant currency earnings per share (EPS) growth for 2024. Another positive is the company has achieved 12 consecutive earnings beats and three straight impressive quarters relative to expectations, setting a favorable stage for EPS revision trends as it heads further into the year.

PEP’s branding and product mix make it one of those stocks to buy for a recession that won’t likely go out of style anytime soon. Its products are popular, and almost anyone can afford a few extra dollars to pick up a can of Pepsi, even in the worst-case scenarios.

Analyst predict a modest upside for PEP over the next twelve months. It has a consensus “Buy” rating, and its share is expected to climb 17.2%.

Altria (MO)

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Altria (NYSE:MO) is one of those stocks to buy for a recession that I don’t think will ever go completely out of style. It owns the Marlboro brand of cigarettes and has since expanded into smokeless options.

While MO’s top-line has eroded significantly over the past decade or so, its free cash flow, buyback programs, and dividend yield of 9.5% are all very impressive for investors. Altria’s stock price is declining, but it functions almost like an annuity as its dividends continue to increase and be paid out to investors.

The company recently reaffirmed its 2024 earnings guidance, expecting an adjusted diluted EPS in the range of $5 to $5.15 per share, which represents a growth rate of 1% to 4% from the previous year’s base of $4.95 per share. Looking ahead further, the company’s strategy includes a new $1 billion share repurchase program and a commitment to a mid-single-digit annualized dividend increase through 2028.

MO could be a good pick for retirees and those who are comfortable investing in sin stocks. Although the pivot to smokeless products for MO is monumental, “big tobacco” will one day become “big nicotine,” and MO is perhaps one of the best-equipped companies to make such a transition.

American International Group (AIG)

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American International Group (NYSE:AIG) is a multinational finance and insurance corporation. 

For this year, the company expects its general insurance unit’s investment income to remain robust, forecasting at least $750 million per quarter in 2024. AIG’s outlook builds on the progress it made this year, with a liquidity strength of $3.6 billion and executed $785 million in share repurchases during Q3 2023.

Investing in a huge company like AIG, and indirectly in services that everyone needs, makes it one of those stocks to buy for a recession. People always need insurance and forms of financing, although some of these segments are slightly more cyclical.

American International’s short-term outlook is also expected to be accretive for investors, and its 1.92% divided yield may help give one’s portfolio slightly more cushioning. Analysts also forecast a substantial EPS increase for AIG stock in FY2024. Notably, its EPS is expected to swell 50.7% to 7.51 per share, and a slight top-line expansion is also predicted at 8.5%.

On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.

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