Wells Fargo sees a recession hitting the US in mid 2023 — here are 3 stocks the big bank likes for both cash return and inflation protection
The year 2022 has been rough for investors. Year-to-date, the S&P 500 has plunged over 20%.
But a stock market downturn isn’t the only thing to worry about, as Wells Fargo now sees the U.S. economy slipping into a mild recession in mid 2023.
“In our view, the recession will be more or less equivalent in magnitude and duration to the downturn of 1990-1991. That recession lasted for two quarters with a peak-to-trough decline in real GDP of 1.4%,” the bank’s chief economist Jay Bryson wrote in a note last month.
The good news? Wells Fargo recently unveiled a portfolio of recession-resistant stocks — here’s a look at three to help you play defense.
Don’t miss
Colgate-Palmolive (CL)
It’s easy to see why Colgate-Palmolive belongs in a recession-resistant portfolio.
The company is deeply entrenched in its operating markets, including oral care, personal care, pet nutrition and home care.
Notably, its leading brand Colgate has by far the largest share in the toothpaste market worldwide. And thanks to brands like Softsoap and Palmolive, the company is also a dominant player in the liquid soap market.
No one is going to stop buying soap or toothpaste in tough times. That simple truth has led to a long and consistent track record of returning cash to investors.
The company has increased its payout for 60 consecutive years.
Business is still growing: In Q1, organic sales at Colgate-Palmolive increased 4% year-over-year.
Paying quarterly dividends of 47 cents per share, CL stock offers an annual yield of 2.3%.
WM (WM)
Formerly known as Waste Management, WM brands itself the largest comprehensive waste management environmental solutions provider in North America. It says it provides collection, recycling and disposal services to more than 20 million residential, commercial, industrial and municipal customers.
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