Corrections and crashes test the resolve of investors who claim to be in it for the long haul. Some investors flee from the stock market upon any distress, while others buckle down and wait for the storm to pass. Storms will come for any investor, but there are ways to minimize the damage. Some investments are built to endure economic slumps, and some assets can even thrive during downturns. Higher inflation and elevated interest rates are top concerns; these three stocks for a market crash can provide insulation.
Procter & Gamble (PG)
Consumers get tighter with their spending during economic downturns. They shy away from luxuries and look for the most affordable goods. However, there are a few essential products that people can’t remove from their budgets as easily. Procter & Gamble (NYSE:PG) produces many consumer goods that people have been buying for decades.
The company’s history outdates us all, as it’s been around since 1837. Procter & Gamble has been paying out dividends for 133 consecutive years, including 67 straight years of dividend hikes. Procter & Gamble has maintained an annualized dividend growth rate of 4.57% over the past decade. Shares currently yield 2.50%.
The company’s Q3 FY24 results were suitable given the company’s maturity and investors’ expectations. Net sales grew by 1% year-over-year, while diluted EPS and core EPS rose by 11% year-over-year.
Procter & Gamble has so far outperformed the S&P 500 with an 8% year-to-date gain. However, the stock typically underperforms while producing respectable returns. Shares are up by 52% over the past five years.
Walmart (WMT)
Walmart (NYSE:WMT) is another reliable destination for people who want to save money. Economic challenges can bring more people to Walmart locations and aid in the retailer’s quest to attract higher net-worth buyers.
The retail giant offers many products but is also the biggest grocery retailer in the United States. Walmart generates more than half of its total sales from its grocery division. People still have to eat and will turn to more affordable companies for their food during economic slowdowns.
While the appeal during economic slowdowns is apparent, Walmart can still deliver solid returns during bullish cycles. The stock has gained 77% over the past five years, and analysts believe the company has more room to run. Analysts rated the stock as a “Strong Buy” and projected a 9% upside. The highest price target of $75.99 per share suggests the stock can gain an additional 27% from current levels.
Costco (COST)
Costco (NASDAQ:COST) is an attractive pick for reasons similar to Walmart. People can go to the wholesaler to save money on various products, including the essentials. However, Costco has outperformed Walmart by nearly tripling over the past five years. Costco shares are also up by 12% year-to-date.
The company is still growing. Costco reported solid March sales results, which indicate a 7.7% year-over-year sales increase for the five weeks that ended April 7, 2024. E-commerce sales increased by 28.3% year-over-year during the period. The company currently operates 876 warehouses, which gives it a competitive moat.
Costco also announced a dividend hike that will raise the quarterly payout from $1.02 to $1.16 per share. It’s a 13.7% year-over-year increase. Analysts believe the stock can extend its gains. The consensus rating is a “Strong Buy” among 25 analysts. The average price target suggests an 8% upside, but more can be in store. Costco shares can soar as high as 19.3% from current levels to reach the highest price target of $870 per share.
On the date of publication, Marc Guberti did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.