Recession-Resistant Stocks: Navigating Market Volatility

Historical Performance During Recessions

Southern Company, Amazon, Colgate-Palmolive, and McDonald's have demonstrated resilience during economic downturns. Southern Company excelled in 2023 despite financial headwinds, Amazon navigated macroeconomic challenges in 2022, Colgate-Palmolive maintained strong performance and cash flow, and McDonald's managed supply chain disruptions effectively.

"Southern Company experienced an exceptional year in 2023. We reached new heights through excelling at the fundamentals, serving customers, elevating our communities and leading through innovation. Despite financial headwinds that included higher interest rates and inflation and historically mild weather to begin the year, the company delivered on our commitments as we continued our superior performance across all facets of our business by keeping the customers and communities we serve at the center of everything we do." --- (SO, AGM, 2024/05/22)

"During 2022, we faced a number of challenges. We saw prominent macroeconomic headwinds as the world adjusted to life post COVID, including the highest levels of inflation we've seen in Amazon's history and an overall uncertain consumer environment." --- (AMZN, AGM, 2024/05/22)

"Noel Wallace: Thanks Dara. You know, clearly a great quarter for Hill’s, a strong performance across the board, quite frankly, and we’re particularly pleased with the strong volume in light of the significant pricing we’ve taken historically." --- (CL, earning call, 2024/Q2)

"Supply chain interruptions and related price increases have in the past and may in the future adversely affect us as well as our suppliers and franchisees, whose performance may have a significant impact on our results." --- (MCD, sec filing, 2024/Q1)

"Again, as we look at cash flow, strong performance, and as we think about that, it kind of goes back into the capital allocation, and I think you’ve seen that manifest itself in our strategy." --- (CL, earning call, 2024/Q1)

Sector Analysis: Consumer Staples

Consumer staples companies like Walmart, PepsiCo, Costco, and Procter & Gamble demonstrate resilience through operational efficiencies, cautious yet value-driven consumer spending, and strategic growth despite economic challenges. However, potential store closures and macroeconomic uncertainties remain significant concerns for the sector.

"Critics of the deal say the merger is likely to lead to more grocery store closures in the future, particularly in rural areas, and reduce consumers' access to food staples and necessities." --- (WMT, press release, 2024/07/26)

"So do you see different behaviors happening everywhere, I think the connecting line it would be, the consumer is more cautious, the consumer is more choiceful, but the consumer is willing to spend in areas where they see value and we see it in our category, right, the more -- the parts of the category there I was referring to." --- (PEP, earning call, 2024/Q2)

"When combined with the operating efficiencies achieved by volume purchasing, efficient distribution and reduced handling of merchandise in no-frills, self-service warehouse facilities, these volumes and turnover enable us to operate profitably at significantly lower gross margins (net sales less merchandise costs) than most other retailers." --- (COST, sec filing, 2024/Q1)

"business has, we’ve talked about resuming volume growth in most of the major markets and doing that while building margin and simultaneously increasing our investment in these kinds of things, and I don’t see any reason in a--if we do find ourselves in a more difficult environment from a consumer economic standpoint, one of the things we talk about internally is would we change our approach if we either had confidence that things were going to get remarkably better from a consumer standpoint or remarkably worse from a consumer standpoint, would we not want to be in daily use categories where performance drives brand choice?" --- (PG, earning call, 2024/Q4)

"Other Information ." We expect continued uncertainty in our business and the global economy due to inflationary trends, a challenging macro environment, geopolitical conditions, supply chain disruptions, volatility in employment trends and consumer confidence." --- (WMT, sec filing, 2025/Q1)

Sector Analysis: Healthcare

Healthcare companies like Merck, UnitedHealth, Johnson & Johnson, CVS, and Pfizer demonstrate resilience through a focus on reliability, quality, strategic business opportunities, patient interaction, and streamlined infrastructure, ensuring stability and growth even during economic downturns.

"For innovative products, reliability of supply and product quality are more important than economies of scale and production. This also applies to the healthcare sector where patient safety and delivery capability rightly play a major role in ensuring patient care." --- (MRK, event transcript, 2024/04/26)

"That dedication is reflected in our overall performance this quarter. Directly as a result of their hard and -- hard work and the broad performance of our diversified businesses, we're able to reconfirm our full year adjusted earnings outlook, even as we absorb $0.30 to $0.40 per share in business disruption impacts related to Change Healthcare." --- (UNH, earning call, 2024/Q1)

"We consistently evaluate new business opportunities through a strategic and scientific lens to deliver value for patients and for Our preference is to be in areas in which we have internal capabilities and know how and also to pursue products that represent progress in improving the current standard of care." --- (JNJ, event transcript, 2024/04/25)

"And as we know, consumers and patients who interact with the healthcare system will deliver lower costs, will have improved quality and eventually continue to drive growth for our company because of the better outcomes and because of the better retention that we have with them." --- (CVS, conference, 2024/05/29)

"Its streamlined infrastructure facilitates performance of clinical studies and responds to the needs of investigators in terms of methodology/statistical analysis and of logistics and management of trials and other multicentre studies." --- (PFE, press release, 2024/07/23)

Sector Analysis: Technology

Technology companies are demonstrating resilience during market volatility by investing in infrastructure and innovation. Amazon focuses on enhancing customer experience and efficiency, Intel emphasizes the transition to a digital economy, Avant Technologies invests in AI supercomputers, Google balances growth and margins, and Apple sees continued enterprise investment driving productivity and innovation.

"We seek to invest efficiently in numerous areas of technology and infrastructure so we may continue to enhance the customer experience and improve our process efficiency through rapid technology developments, while operating at an ever increasing scale." --- (AMZN, sec filing, 2024/Q1)

"for employees, businesses and investors. A fluid transition from an industrial economy to a digital one requires a balance of both art and science with one eye on the development and execution of the physical technology." --- (INTC, conference, 2024/06/12)

"One of the solutions being presented is being presented by Avant Technologies Inc. (OTCQB:AVAI) which recently updated its plans for state-of-the-art facilities equipped with immersible AI supercomputer servers—which not only offer superior processing power, but also allow for faster and more efficient data analysis." --- (MSFT, press release, 2024/07/30)

"I wanted to know if you could talk a little bit about both the opportunities and the challenges of operating at scale in a time like this where there's a lot of technology innovation going on and how you see the elements of trying to strike a balance towards moving the organization forward while still continuing to both invest for growth as well as balance margins. Thanks so much." --- (GOOG, earning call, 2024/Q1)

"Turning to enterprise, our customers continued to invest in Apple products to drive productivity and innovation." --- (AAPL, earning call, 2024/Q2)