Which stocks are least likely to drop in a recession

Symbols

Which stocks are least likely to drop in a recession?

4/17/2025 02:27pm

Aime

The deep research logic is organized as follows: 

Okay, let's tackle this question: "Which stocks are least likely to drop in a recession?" The user is looking for stocks that are considered recession-proof. From the references provided, several industries are highlighted as resilient during economic downturns. Let me start by recalling the key points from the references.

First, the top industries mentioned include Healthcare, Utilities, Groceries, Cleaning products/sanitation services, and Discount Stores . These sectors are essential, so demand remains stable even when the economy is struggling. For example, people still need healthcare, utilities like water and gas, groceries, and cleaning products regardless of the economic situation.

Looking at the specific stocks from Reference 6, there's a list of companies in these sectors with low P/E and P/B ratios. Companies like Seneca Foods (SENEA), Avantor (AVTR), Icon (ICLR), National Healthcare (NHC.A), Consolidated Water (CWCO), UGI (UGI), Kraft Heinz (KHC), NewGenIVF (NIVF), Archer-Daniels-Midland (ADM), and Utah Medical Products (UTMD) are all in the Healthcare, Utilities, or Consumer Staples sectors and meet the valuation criteria. These seem like strong candidates because their low valuation ratios suggest they might be undervalued and have room to grow even in a recession.

The user is interested in the NASDAQ Composite, which is a diversified index. The stocks mentioned above include some NASDAQ-listed companies like AVTR, ICLR, NIVF, UTMD. However, the user's profile indicates a preference for a diversified approach and a moderate to high risk tolerance. So, including a mix of sectors and ensuring the stocks are part of the NASDAQ or have significant exposure there would be beneficial.

Reference 7 and 8 discuss the Consumer Staples Select Sector SPDR Fund (XLP) and Utilities Select Sector SPDR Fund (XLU), which have been performing well in 2025. These ETFs are part of the defensive sectors and could be recommended as a diversified option. However, the user might prefer individual stocks, so highlighting the components of these ETFs that are on NASDAQ would be useful.

References 19 and 20 mention companies like Laser Photonics (LASE) and NVIDIA (NVDA). While NVIDIA is in the tech sector, which is typically cyclical, Reference 20 argues that NVIDIA might be tariff-resistant due to its strong financials and growth in AI. However, given the user's focus on recession-proof stocks, tech might be riskier. Laser Photonics, on the other hand, is in the healthcare sector and has a strategic focus on vertical integration, making it more resilient.

References 21 and 22 highlight Dollar General (DG) and Dollar Tree (DLTR) as discount retailers that are performing well. These are part of the Consumer Staples sector and have shown resilience during economic downturns. They are also listed on NASDAQ (DG is on NYSE, but DLTR is on NASDAQ), so they fit the user's preference.

Reference 34 specifically mentions Dollar General (DG) and Dollar Tree (DLTR) as stocks that analysts are upgrading amid tariff-driven selloffs. This aligns with the user's interest in recent analyst actions and potential short-term gains.

Additionally, Reference 17 points out Local Bounti (LOCL) as a Consumer Staples stock that's outperforming the sector. It's important to check if LOCL is on NASDAQ, but given the ticker (LOCL), it's likely a NASDAQ listing.

The user's investment horizon is short to medium-term, so including stocks with recent positive performance and analyst upgrades would be relevant. For example, Church & Dwight (CHD) was highlighted in Reference 9 as a standout in Consumer Staples, and it's on NASDAQ.

In terms of visualization, the user requires that any query from the references be visualized. Reference 6 has a query that needs to be visualized, so I need to include that table after mentioning the stocks from that reference.

I should structure the answer by first stating the conclusion, then breaking down the sectors, providing specific stock examples with relevant data from the references, and including the visualization. Also, considering the user's interest in NASDAQ, I'll note which stocks are listed there.

Potential risks to mention include the impact of tariffs (as per References 33 and 34) and the importance of low debt-to-equity ratios (Reference 18), which some of the mentioned companies have, like Phreesia (PHR) and Mama's Creations (MAMA).

Finally, summarizing the key takeaways and emphasizing the sectors and specific stocks that align with the user's profile, such as those in defensive sectors with strong fundamentals and NASDAQ listings.

Conclusion: During economic downturns, Healthcare, Utilities, Consumer Staples, and Discount Retail sectors consistently demonstrate resilience due to their inelastic demand profiles. Below is a detailed analysis of specific stocks and ETFs least likely to drop in a recession, supported by proprietary data and market trends.

1. Top Recession-Proof Sectors & Stocks

The following industries and companies are historically least affected by recessions, backed by valuation metrics (P/E < 15, P/B < 2) and recent performance:

Sector	Key Companies	Why They Thrive
Healthcare	Seneca Foods (SENEA), Avantor (AVTR), Icon (ICLR), National Healthcare (NHC.A)	Essential medical services and stable government funding.
Utilities	Consolidated Water (CWCO), UGI (UGI)	Inelastic demand for water and gas utilities.
Consumer Staples	Kraft Heinz (KHC), Archer-Daniels-Midland (ADM)	Grocery staples remain non-discretionary.
Discount Retail	Dollar General (DG), Dollar Tree (DLTR)	Low-cost essentials appeal during economic uncertainty.

sector is healthcare or utilities or groceries or cleaning products and sanitation services or discount stores; p/e ratio < 15; p/b ratio < 2(75)

Last Price($)	Last Change%	GICS Sector	GICS Industry	GICS Sub-Industry	P/E(TTM)2025.04.17	Price to Book Ratio2025.04.17
82.85	0.10%	Consumer Staples	Food Products	Packaged Foods & Meats	14.85	0.93
15.15	-0.69%	Health Care	Life Sciences Tools & Services	Life Sciences Tools & Services	14.54	1.74
139.28	-2.97%	Health Care	Life Sciences Tools & Services	Life Sciences Tools & Services	14.16	1.18
91.98	0.45%	Health Care	Health Care Providers & Services	Health Care Services	13.95	1.45
24.07	0.99%	Utilities	Water Utilities	Water Utilities	13.52	1.82
33.39	1.80%	Utilities	Gas Utilities	Gas Utilities	12.99	1.56
29.24	1.48%	Consumer Staples	Food Products	Packaged Foods & Meats	12.74	0.71
0.30	-14.61%	Health Care	Biotechnology	Biotechnology	12.71	1.85
47	1.89%	Consumer Staples	Food Products	Agricultural Products & Services	12.54	1.02
52.27	-0.25%	Health Care	Health Care Equipment & Supplies	Health Care Equipment	12.36	1.46

Ticker
SENEASeneca Foods A
AVTRAvantor
ICLRIcon
NHCNational Healthcare
CWCOConsolidated Water
UGIUGI
KHCThe Kraft Heinz
NIVFNewGenIVF Group
ADMArcher-Daniels-Midland
UTMDUtah Medical Products

View 75 results more

2. Undervalued, Recession-Resistant Stocks

Several companies in defensive sectors trade below historical averages, offering margin of safety:

Ticker	Company	P/E	P/B	Sector	Recent Performance
AVTR	Avantor	14.56	1.74	Health Care	+2.02% YTD, focuses on critical lab supplies.
KHC	Kraft Heinz	12.75	0.71	Consumer Staples	+1.58% YTD, dominant in packaged foods.
DG	Dollar General	17.65	2.68	Consumer Staples	+2.97% YTD, outperforms peers in discount retail.
DLTR	Dollar Tree	N/A	N/A	Consumer Staples	Upgraded by analysts for tariff resilience; expects +14% upside.

3. ETFs for Diversified Exposure

For investors seeking broader exposure, these ETFs track defensive sectors:

Ticker	Fund	2025 YTD Performance	Key Holdings
XLP	Consumer Staples Select Sector	+4%	Kraft Heinz, Procter & Gamble, Coca-Cola.
XLU	Utilities Select Sector	+2.6%	Duke Energy, Consolidated Edison, American Electric Power.

4. Analyst Upgrades & Tariff Resilience

Recent upgrades highlight companies navigating tariff risks:

Dollar General (DG): Analysts cite its "recession-resistant" model, with 20,000+ stores focused on essentials ¹.
Laser Photonics (LASE): Acquired recession-resistant assets in pharmaceuticals, reducing exposure to cyclical markets ².
Church & Dwight (CHD): A consumer staples leader with +13% YTD, benefiting from stable demand for cleaning products ³.

5. Risks to Monitor

Tariff Impacts: Utilities (e.g., Dominion Energy) face risks from steel tariffs, but regulated rate structures mitigate losses ⁴.
Debt Levels: Companies like Kroger (KR) (Debt/Equity = 2.16) are more vulnerable to credit tightening ⁵.

Key Takeaways for NASDAQ Investors

Focus on Defensive Sectors: Healthcare (AVTR, ICLR), Utilities (CWCO), and Consumer Staples (KHC, DG) align with the NASDAQ’s tech-heavy but diversified profile.
Short-Term Opportunities: Dollar Tree (DLTR) and Local Bounti (LOCL) offer undervalued entry points in discount retail and agriculture ⁶¹.
Avoid Cyclical Stocks: Tech (e.g., NVDA) remains volatile, despite its tariff-resistant narrative ⁷.

By prioritizing these stocks and ETFs, investors can mitigate recession risks while capitalizing on defensive sector momentum.

Source:

1. These 2 Stocks Just Caught Rare Upgrades Amid the Tariff-Driven Selloff. Here’s What Analysts Recommend Buying Now.