3 Essential Stocks for Building a Recession-Proof Portfolio

Core Viewpoint - The article emphasizes the importance of recession-proof stocks as a safe investment strategy amid potential economic downturns, highlighting companies with strong fundamentals and operational efficiency that can thrive during challenging times [1] Group 1: Walmart (WMT) - Walmart is recognized as a leading big-box retailer, benefiting from its low-price strategy, especially during inflationary periods, with a year-over-year growth of 5.7%, surpassing its 5-year average by 22% [2] - The stock has appreciated over 30% year-to-date, making it a strong candidate for a recession-resistant portfolio, alongside a recent 9% dividend increase, marking 50 years of consecutive dividend growth [2] - In Q1 of fiscal 2025, Walmart reported a 6% year-over-year sales increase, driven by significant growth in eCommerce (21%) and advertising (24%), with adjusted earnings per share rising from 49 to 60 cents, a 22.4% increase year-over-year [3] Group 2: Johnson & Johnson (JNJ) - Johnson & Johnson, a major player in the healthcare sector for 138 years, has a strong focus on research, development, and manufacturing of healthcare products [4] - The company has a remarkable track record with 62 consecutive years of dividend growth, recently announcing a dividend increase with a forward yield exceeding 3.3% [5] - In its latest quarter, Johnson & Johnson reported $21.4 billion in sales, a 2.3$24.3 billion in trailing twelve-month free cash flows, indicating strong financial health [5] Group 3: Procter & Gamble (PG) - Procter & Gamble is a leading consumer goods company known for its extensive product lineup, including brands like Tide and Gillette, demonstrating resilience and adaptability in a competitive market [6] - The company has a strong history of rewarding shareholders, with 68 consecutive years of dividend payouts, reflecting its operational strength [6] - In Q3, Procter & Gamble achieved net sales of $20.2 billion and an 11% year-over-year increase in earnings per share, with impressive net income and levered free cash flow margins of 18% and 14.6%, respectively [7]