By The US nonfarm payrolls grew sharply on a month-over-month basis in August but still came in below the consensus forecast on Friday.
The US economy added 142,000 jobs last month versus 89,000 in July and 161,000 that the Dow Jones estimate had called for.
The weaker-than-expected monthly employment data suggests businesses remain wary of hiring, which may reflect concerns about future economic conditions.
If you’re scared of a possible recession in the United States ahead, here are the top three stocks you must own to shield your portfolio from the effects of a looming economic slowdown.
PepsiCo Inc (NASDAQ: PEP)
PepsiCo has a long history of reporting relatively stable sales amidst an economic slowdown.
While it may not offer upsized returns like those often realized in fast-growing tech names, PEP offers certainty in an otherwise uncertain backdrop.
Additionally, you get a 3.05% dividend yield with PepsiCo stock which positions it well in terms of total returns ahead of a potential US recession.
The multinational food and beverage giant forecasts a 4.0% annualised growth in organic revenue and at least an 8.0% increase in earnings on a core constant currency basis.
Shares of PepsiCo Inc are currently down some 10% versus their all-time high. So, rest assured, you’re not investing in this consumer staple at an unusual premium.
Source: TradingView
Johnson & Johnson (NYSE: JNJ)
Johnson & Johnson is a recession-proof healthcare giant that’s pulling out of its long-standing talc baby powder fiasco, which may breathe new life into its share price over the next 12 months.
The pharma giant offers industry-leading sales and a robust pipeline that will likely help it remain resilient in the face of a US recession.
More importantly, Johnson & Johnson stock is currently trading at a significant discount to the likes of Eli Lilly & Co. It’s going for just 15 times its forward earnings at writing versus the weight-loss drug behemoth at over 41 times.
Much like PepsiCo, JNJ shares also pay a rather healthy dividend yield of 3.01% to help lock lucrative total returns for investors during economically challenging times.
Source: TradingView
Walmart Inc (NYSE: WMT)
Economic slowdowns tend to make consumers wary of spending and that’s a strong enough investment thesis for Walmart Inc.
The big box retailer remains committed to bringing more convenience to shoppers with its eCommerce offerings that have started to help it steal middle- to upper-income consumers from the dollar store chains.
WMT recently raised its full-year guidance for sales and adjusted earnings to up to 4.75% and between $2.35 and $2.43, respectively, which confirms management’s confidence in what the future holds for Walmart.
Wall Street also has a consensus “buy” rating on Walmart stock which currently pays a dividend yield of 1.08%.
Analysts see an upside in WMT share price to about $82 on average which translates to a potential 8% gain from here.
Source: TradingView
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