The probability of a U.

3 Top Recession-Proof Stocks to Buy -- The Motley Fool

Stocks tend to perform poorly during recessions; however, stocks that are dependent on the economy tend to perform much worse than others. History shows that a recession occurs every 8 to 10 years. The last recession occurred in , or 8 years ago technically from Dec. Prior to the financial crisis, a recession occurred 7 years earlier from March to November , and prior to that, a recession occurred in Sometimes, I believe it's a good idea to play it safe and shift portfolio positions from higher-risk stocks mainly, small and mid-cap stocks that don't pay a dividend, and whose performance and dividend are dictated by the economy into safer stocks.

You generally will want to avoid luxury-type stocks, such as Prada OTCPK: PRDSY and Michael Kors NYSE: KORS , and casino stocks, such as Caesars Entertainment Corp. CZR and MGM Resorts NYSE: And I believe now is the perfect time to add some "defensive" dividend stocks to your portfolio.

The dividends can give you safe income for retirement - or you can re-invest the dividends to purchase more shares of stock. Either way, here are my top 5 recession-proof stock picks for I think these companies will continue to grow and pay a dividend or even increase dividends , as these businesses are not as sensitive to the economy as other stocks.

Even if we don't go into a recession in , these stocks will still likely pay a dividend and perform better than most bonds, money market accounts and CDs. I selected these stocks mainly based on past performance during the recession, dividend track record, and earnings prospects for and beyond. Returns do not include dividends.

Utility companies like PCG tend to perform well during recessions, because people still need its services to survive, regardless of the state of the economy.

The 10 Best Stocks to Buy for the Next 10 Years - zuwywakybobu.web.fc2.com

While the stock declined Therefore, an investor who held PCG stock and re-invested dividends throughout the recession would have done quite well. PCG Dividends Paid NYSE: TTM data by YCharts. With dividends re-invested, PCG's stock has an average annual return of 6.

New Jersey Resources is a provider of natural gas in northern and central New Jersey. The company's subsidiaries include New Jersey Natural Gas, which serves more than , customers in the state, NJR Home Services, which provides home-appliance service, sales and installations, NJR Energy Services, which provides wholesale energy services, including natural gas supply, pipeline capacity and storage management, and NJR Clean Energy Ventures, focusing mainly on renewable energy projects such as solar energy.

In addition, the company recently began investing in natural gas storage and transportation pipelines; the company owns a 5. During the recession, New Jersey Resources performed exceptionally, returning 4. As for dividends, this chart below says it all: Shares currently yield 2. NJR data by YCharts. McDonald's is a company that really needs no introduction.

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The company's all-day breakfast strategy launched in October is really paying off, as it recently reported U. You'll see in the below chart the performance of McDonald's stock during the last recession: The stock was flat, but still significantly outperformed the Dow Jones.

The stock has an impressive track record of 39 years of straight dividend increases, and boasts a 5-year dividend growth rate of MCD data by YCharts.

The stock also carries the highest yield on this list, at 3. For these reasons, I expect McDonald's stock to outperform the market going forward and it should be a great stock to own during recessions. American Water Works is the largest publicly traded U.

This is a dominant company in the water industry and AWK operates and manages more than individual water systems across the U. It's a solid business to own during a recession for obvious reasons. During the last recession, AWK lost The stock's performance over the past 5 years is much more impressive: During the time period of - , the company was able to increase its earnings per share WEC Energy is an electric and natural gas delivery company that serves 4.

WEC's performance during the last recession wasn't the best on this list, as the stock declined However, the returns over the past five years have been much better, as WEC has gained The gains get even more impressive when you go 10 years out, as WEC has returned Including dividends, WEC's annual return over the past 10 years is The last quarterly dividend declared on Jan. WEC data by YCharts. Fundamentally, the company is very solid, with operating margins of In conclusion, these are my top 5 recession-proof stocks to own in , as I feel these picks will outperform peers, mainly due to strong business earnings and dividend increases.

Other stocks to consider for this list include: T , Verizon NYSE: VZ , Altria NYSE: MO , and Dollar General NYSE: I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it other than from Seeking Alpha. I have no business relationship with any company whose stock is mentioned in this article.

This article discusses one or more securities that do not trade on a major U. Please be aware of the risks associated with these stocks.

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Top 10 Dividend Stocks to Buy Before the Next Recession - TheStreet

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