3 Consumer Stocks to Buy in a Bear Market

  • Investors looking to find protection in a bear market may be able to profit by finding consumer stocks to buy.
  • Walmart (WMT): Resisted both the 2008 and 2020 recession and is on a strong uptrend.
  • McDonald’s (MCD): Stable uptrend since 2003, and a revenue turnaround makes it a safe and profitable investment.
  • Dollar General (DG): DG manages to profit during recessions as seen by its spike in revenue growth in 2020 and 2008.
bear market on stock exchange
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Consumer stocks are among the safest and the most profitable to hold during a bear market or a recession. As seen in past bear markets, these stocks have been surprisingly resilient.

In an economic decline, consumers certainly cut back on spending. However, consumer companies are less affected as consumers will continue to spend on necessities such as food and clothing.

Of course, these stocks are unlikely to give you crazy returns in a booming market. However, they will undoubtedly be one of the most stable during a bear market.

It is still essential to keep in mind that there’s no guarantee of safety in any industry, but consumer stocks are one of your safest bets if you’re looking to avoid huge losses. Therefore, I have found three stocks that are unlikely to take significant losses in a bear market while retaining satisfactory long-term profitability.

Ticker Company Current Price
WMT Walmart Inc. $149.56
MCD McDonald’s Corporation $250.78
DG Dollar General Corporation $233.56

Stocks to Buy: Walmart (WMT)

Image of Walmart (WMT) logo on Walmart store with clear blue sky in the background
Source: Jonathan Weiss / Shutterstock.com

Walmart (NYSE:WMT) is a discount retailer and is likely among the safest stocks in the current market. The company is very well known, and its stocks are unlikely to be battered by a recession.

In 2008, WMT stock kept stable and even profited from the recession, as Walmart’s sales continued to grow despite a declining economy. By the end of the year, Walmart stocks were up 15%-plus compared to the S&P 500’s 40% loss. Walmart stocks were almost unaffected even in the more recent 2020 coronavirus recession.

Walmart has consistently resisted economic volatility, and therefore I believe it is a good stock to hold in the current bear market.

McDonald’s (MCD)

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The last time McDonald’s (NYSE:MCD) stock had a prolonged decline started in 1999. The stock declined for four years, more than 71% from its peak. However, even if you bought at the peak before the decline mentioned above, you’d still be up 415% today as the stock has been consistently gaining value.

Moreover, the stock managed to gain 7% in value during the great recession and has managed to keep steady since. In addition, the stock managed to resist the coronavirus pandemic relatively well despite it being a restaurant chain, which was among the worst affected.

In addition, McDonald’s revenue has also reversed. Since 2013, the company had been in a long-term revenue decline, and the quarterly revenue declined from $7.3 billion to a low of $3.7 billion at the height of the pandemic. However, the revenues have returned to pre-pandemic figures in the latest quarter.

Stocks to Buy: Dollar General (DG)

Dollar General (DG) store front with yellow store sign, midday
Source: Jonathan Weiss / Shutterstock.com

Dollar General (NYSE:DG) had its initial public offering in 2009, after the great recession. However, in 2008, Dollar General’s sales rose by 10.1%. Thus looking at the company’s sales during the recession, the stock would’ve likely been resistant to the recession if DG had been publicly traded.

Nevertheless, DG stock was publicly traded in the coronavirus recession, and the company thrived in that period. Revenue growth increased from 7.6% to 27.5% in the first quarter of the pandemic and continued to grow well above double digits until the pandemic became less severe.

Although the company’s growth has now declined, the company’s performance in the coronavirus recession could be a sign that DG could thrive in the next downturn.

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Omor Ibne Ehsan is a writer at InvestorPlace. He is also an active contributor to a variety of finance and crypto-related websites. He has a strong background in economics and finance and is an advocate of blockchain technology. You can follow him on LinkedIn.


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