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Markets are worried about a potential recession in 2023, but investors must remember that a recession doesn’t impact every sector and company equally. Market volatility is often a regular feature in the case of a downturn. Still, you can shield your portfolio from it by investing in stocks that traditionally held firm during previous downturns. Here are ten recession-proof stocks for 2023.

10. Walmart (WMT)

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The world’s biggest retailer is renowned for its affordable prices, which become even more appealing during a recession. As a result, customers are likely to flock to its approximately 10,500 stores to hunt for bargains.

The company generates a significant portion of its sales from groceries, which are expected to remain popular, particularly if they are offered at a discounted price. The company recently disclosed its financial results for Q3 2022, reporting revenue growth of 8.7% to reach $152.8 billion.

Notably, the company’s e-commerce sales increased by 16%, while its global ad sales business surged by 40%. The Q3 figures exceeded analyst expectations, even though the company posted a loss of around $1.8 billion.

Following its Q3 performance, the company has raised its full-year guidance and anticipates consolidated net sales growth of approximately 5.5%. The company has factored in a generally stable US consumer, ongoing inflationary pressures, and a mix of products and formats worldwide when issuing its guidance.

9. Costco (COST)

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Investing $1,000 in Costco stock five years ago would have yielded a return of approximately $3,099 today, with the store experiencing a Compounded Annual Growth Rate (CAGR) of 25.40%. The company recently announced its financial results for October 2022, reporting a 7.7% increase in net sales to $17.73 billion, compared to $16.47 billion in October 2021.

Over the nine-week period ending on Oct. 30, 2022, the company’s net sales reached $39.19 billion, a 9% increase from the same period last year. Costco operates 842 warehouse stores across 14 countries, including 26 new stores opened in 2022. Regardless of economic conditions, consumers will continue to shop at Costco.

8. CVS Health (CVS)

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Regardless of an economic recession, individuals will likely continue to visit CVS Health’s chain of drugstores to refill their prescriptions and purchase their medications. Although the company’s Q3 earnings report surpassed analyst estimates, the stock may encounter various challenges.

Firstly, the loss of Centene’s pharmacy-services business is expected to cost CVS Health approximately $2 billion in 2024. Secondly, the company will commence paying its $5 billion over ten years starting in 2023.

Nonetheless, CVS has increased its full-year 2022 Adjusted EPS guidance range from $8.40 to $8.60 to a range of $8.55 to $8.65. Additionally, the company has raised its cash flow guidance for 2022 by one billion dollars, falling within the range of $13.5 billion to $14.5 billion.

7. The Procter & Gamble Company (PG)

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Even during a recession, people tend to prioritize spending on essential items, and Procter & Gamble’s products are considered essential by many. The company’s range of products, including paper towels, shaving razors, diapers, tampons, detergents, and others, are available in 170 countries and generated more than $59 billion in revenue in the first three quarters of 2022.

As a result, Procter & Gamble is a resilient company that can withstand economic slowdowns. In addition, the stock offers a forward dividend yield of 2.51%.

6. Waste Management (WM)

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Although garbage collection and recycling may not seem like exciting topics, Waste Management’s financials tell a different story. The company has surpassed analysts’ EPS estimates for three consecutive quarters.

With a 25% market share in its industry, customers are unlikely to switch to a different waste management service provider. This has enabled Waste Management to increase its core prices (fees and surcharges) from 4.6% in Q3 2021 to 8.2% in Q3 2022.

As North America’s largest waste management service provider, the company is well-positioned to weather any economic downturn. Thus, despite its seemingly uninteresting business, Waste Management is a company worth paying attention to.

5. Brookefield Infrastructure Partners (BIP)

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This multinational company boasts a diverse portfolio, with ownership of utilities across the globe, including electricity transmission in Australia and Brazil, natural gas pipelines in North and South America and India, as well as data businesses and oil and natural gas transport and midstream businesses.

Recently, it entered into an agreement with Intel to construct two new fabrication factories. With a variety of businesses that are likely to remain stable even during a recession, it’s worth noting that 90% of the company’s cash flow comes from long-term contracts. Additionally, it offers a healthy dividend yield of 3.8% and a dividend payout ratio of 60-70%, providing sufficient funds to support its operations.

4. Enbridge (ENB)

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Enbridge is a pipeline company that operates throughout Canada and the United States, transporting crude oil, natural gas, and natural gas liquids. With the most comprehensive pipeline system in North America, Enbridge’s stock has performed well, rising 6.4% compared to the Dow Jones’ -6.12% as of Nov. 25, 2022.

It offers a significant source of passive income, boasting a forward dividend yield of 6.25%. Even during the height of the pandemic, Enbridge continued to pay out dividends, demonstrating its resilience. While primarily an old-energy business player, the company’s portfolio has shifted towards renewable energy, accounting for 4% of its holdings. This strategic move acknowledges the global trend towards renewable energy sources.

3. McDonald’s (MCD)

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There is a reason why McDonald’s is often seen trading at or near its all-time highs. It is one of the most recession-proof stocks out there. Its franchisees operate globally, and its food is affordable. This is one of the few restaurants where no one qualms about entering. Its audience cuts across age groups and socio-economic status.

Global comparable sales for Q3 2022 increased by nearly 10%, with growth across all segments. It’s a Dividend Aristocrat, and it declared a 10% increase in its quarterly cash dividend to $1.52 per share.

2. Lowe’s (LOW)

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Lowe’s is among the largest home improvement companies in the United States. Concerns are looming in the real estate sector regarding the potential negative impact of increased interest rates on the housing industry. Home sales during October 2022 experienced a 5.9% decline, reaching a seasonally adjusted annual rate of 4.43 million, marking the lowest level since December 2011, excluding the beginning of the COVID-19 pandemic.

During Lowe’s recent earnings call, CEO Marvin Ellison stated that due to low housing supply and high interest rates, homeowners are opting to renovate their current homes to suit their needs rather than move, which is a significant reason why the home improvement industry can thrive during both strong and slow housing markets.

Lowe’s also boasts a long-standing dividend history dating back to 1961 when it went public, paying out an annual dividend of $4.2 or 2%.

1. Coca-Cola (KO)

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Coca-Cola is one of the most reputable blue chip companies, sustained by the sales of its diverse beverage offerings including sodas, juices, and more, which generated a staggering $42 billion in revenue over the past 12 months. In 2022, Coca-Cola’s shares exhibited a 5.14% increase in value on Nov. 23, whereas the S&P 500 index suffered a loss of 16.5% over the same timeframe.

Notably, this company is the longest-held investment in Warren Buffett’s portfolio, and it boasts a forward dividend yield of 2.84%, along with a consistent dividend streak extending six decades. Despite enduring numerous economic downturns, Coca-Cola has always managed to thrive, making it an excellent choice for investors seeking a recession-proof stock.

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