Here are a few interesting stocks that may be good stocks to hold even when the US experiences a recession.
- Procter and Gamble (PG)
- Unilever (UL, and UN)
Unilever is a well known and large company based in England and the Netherlands. They provide many well known products including fast moving consumer goods, food, home and personal care. They own the brands Knorr, Country Crock, Ben and Jerry's Ice Cream, Klondike, Posicle, Lipton Tea, SlimFast, Dove, Suave, Vaseline, Close Up toothpaste, Comfort, Snuggle, and Surf. Forward PE is 17.48 and its yield is 2.60%. The stock is within range of its 52 week high. - Pepsi (PEP)
Everyone knows Pepsi brands including Pepsi, Doritos, Frito-Lay products, Ruffles, Quaker Oats products, Mountain Dew, Tropicana Juice drinks, Dole, Rice-A-Roni, and other products. Forward PE is 20, with a yield of 2%. The stock is within range of its 52 week high. - Altria (MO)
Altria is a $158 Billion company that specializes in selling tobacco products (Philip Morris and related brands) and food products, and they used to produce products from Kraft (KFT). However, Altria has spun off Kraft (KFT), so Altria can concentrate on tobacco products. Altria (MO) has a forward PE of 16, and a forward yield of 4.0%. Kraft (KFT), makers of Oreo and Tang, has a forward PE of 16 and a yield of 3.40%. MO is within range of its 52 week high. - Gilead (GILD)
Healthcare is also an important anti-recession sector and Gilead, a $43 Billion Biotech company, is a good company in this sector. They have a good pipeline and produce important products such as Tamiflu and medicines for AIDS related Kaposi's sarcoma. Forward PE is 24, a 5 year estimated growth rate of 17% for a reasonable 1.41 (under 2 is reasonable). The stock is also within range of its 52 week high. - Sun Healthcare (SUNH)
Long term healthcare, especially those companies that cater to the growing population of senior citizens (Baby Boomers will be retiring), is another great anti-recession play. Sun Healthcare (SUNH), a $730 million company, does just that. It has a forward PE of 20, a 5 year estimated growth rate of 24%, for a very good PEG of 0.83 (a PEG under 1 is very cheap). The stock is within range of its 52 week high.
Everyone around the world knows and uses Procter and Gamble products. They make consumer staple products such as Gillette, Head and Shoulders, Pantene, Crest, Vicks, Oral-B, Pringles, Folgers, Downy, Tide, Bounty, Charmin, and Pampers. This $223 Billion company operates three Global Business units: Beauty, Health and Well-Being, and Household Care. PG has a forward PE of 18.37, 5 year estimated growth of 13, a PEG ratio of 1.41 (reasonable for a consistent growth company), has a yield of 1.9%, and is within range of its 52 week high.
So even as the US slows, the companies above should stand to benefit. The companies above are good companies, and most of them are large companies with great international growth and presence. Some even have a decent yield to help cushion your portfolio.
Even if the US stock market does not experience a recession, your portfolio should still have a portion invested in good companies in Consumer Staples and Healthcare, two sectors that should be able to withstand a US slowdown.
2 comments:
Well you were most certainly wrong. Too bad folks like you can't get out of the mindset that just because a company is big and been around a while doesn't mean it's stock will do well.
Thank you for the post.
It is worth looking back and challenging the prevailing wisdom.
Inspired by your post, I looked into the performance of the six stocks and created a new blog entry:
http://techfarm.blogspot.com/2008/07/are-large-cap-consumer-staple-and.html
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