Sure Winners: 7 Stocks Set to Outperform in the Next Recession

As economic certainty wanes, investors are looking for stocks to buy for a recession.

From the first one’s consistent revenue growth to the second one’s data-driven success, the third’s focus on lower carbon intensity, the fourth’s impressive financial performance, the fifth’s strategic healthcare moves, the sixth’s consumer-centric strategies, and the seventh’s expansion into new territories, the article unveils the secrets behind their readiness to excel when the going gets tough.

Discover how these companies are rewriting the rules of recession survival and setting themselves up for prosperity in uncertain times.

Coca-Cola (KO)

Coca-Cola (NYSE:KO) may outperform in the next recession because of its consistent revenue growth and financial stability. Over the past few years, Coca-Cola has achieved a compound annual growth rate of 7% in revenue, supported by inflation-driven pricing.

Notably, the strategic initiatives of its President of North America have contributed to the company’s growth. It resulted in a 9% increase in revenue and expanded margins.

The company’s focus on simplifying its organizational structure, reallocating resources to frontline marketing, investing in capabilities, and enhancing commercial strategies, particularly in the food service and nutrition sectors, has driven this growth.

Overall, Coca-Cola’s balanced approach to growth, supported by specific data and values, positions it well against a potential recession.

Mastercard (MA)

Mastercard (NYSE:MA) may excel in the next recession, supported by robust data and key numerical values. As of August, consumer spending remains resilient, with cross-border travel surpassing 150% of 2019 levels in Q2.

Mastercard has massive strategic wins, including partnerships with multiple banks and  millions of cards affirming its competitive edge. The commercial sector, representing 13% of Mastercard’s GDV in 2022 and growing at 24% YoY, presents substantial growth opportunities. 

The ongoing shift from cash to electronic payments, especially in commercial settings, underscores Mastercard’s potential for transaction volume and value growth even during the adverse economic environment.

Chevron (CVX)

Chevron (NYSE:CVX) is definitely one of the stocks to buy for a recession, driven by its strong financial performance and disciplined capital allocation.

With eight consecutive quarters of ROCE above 12%, the company showcases its commitment to efficient resource utilization. Furthermore, maintaining a net debt of less than 10% bolsters Chevron’s financial resilience in economic downturns.

Chevron’s dedication to lower carbon intensity, with a 64% reduction in upstream methane intensity compared to the U.S. average, aligns with global environmental goals. 

Its diversified portfolio, a strong presence in LNG, expansion efforts in the Eastern Mediterranean, and growth plans in the Gulf of Mexico underscore their strategic readiness to weather economic downturns and thrive in the evolving energy landscape.

PepsiCo (PEP)

PepsiCo (NASDAQ:PEP) is one of the stocks to buy for a recession based on concrete data and strategic moves.

The company achieved an impressive 13% organic revenue growth in the second quarter, marking its seventh consecutive quarter of double-digit organic revenue expansion.

Core gross profit surged by 13%, while core gross margin increased by 130 basis points, suggesting efficient cost management and operational improvements.

The international segment delivered a remarkable 15% organic revenue growth. It is derived alongside emerging markets like Mexico, Turkey, and India, demonstrating double-digit growth.

Finally, PepsiCo’s strong financial performance, diverse portfolio, innovation focus, and cost management strategies prove its potential to excel in the next recession.

Pfizer (PFE)

Due to several key factors, Pfizer (NYSE:PFE) is one of the best biotech stocks to buy for a recession.

The continued demand for COVID-19 prophylaxis and treatment is evident, with Paxlovid utilization surging approximately five times from previous levels. COVID-19 may persist as a significant healthcare issue. 

Pfizer is expanding its product portfolio with new vaccines like RSV and combination vaccines, further strengthening its position in the market. The acquisition of Seagen in the oncology sector is also promising. With top talent from Seagen joining, Pfizer may drive rapid innovation.

Therefore, these strategic moves, coupled with a robust pipeline and strong brand recognition, position Pfizer to thrive in the evolving healthcare landscape.

Walmart (WMT)

Walmart (NYSE:WMT) is easily one of the best retail stocks to buy for a recession. The company reports better-than-expected consumer sentiment in the US.

Data reveals factors like employment stability, wage increases, and pockets of disinflation are positively impacting consumer behavior.

The company’s e-commerce and marketplace segments are experiencing growth, supported by data indicating a 35% increase in advertising within the marketplace. The marketplace offers a vast selection of approximately 400 million items.

Walmart+ and other membership initiatives contribute valuable data for personalization and marketing, focusing on organic repeat customers and a larger share of wallets.

Netflix (NFLX)

Netflix (NASDAQ:NFLX) has undertaken a strategic initiative to combat password sharing, which has affected over 100 million non-paying viewers.

Netflix boasts around 240 million paid members, with substantial untapped potential among the roughly 500 million smart TV households worldwide.

The company is actively expanding its advertising endeavors. It is securing deals with major holding firms and independent agencies during its inaugural Upfront.

Although Q3 average revenue per member is projected to remain flat to decline slightly, Netflix remains optimistic about long-term growth.

As Netflix continues to enhance its content, product, marketing, and monetization efforts, the company expects sustained growth and financial resilience in the face of economic challenges.