The Fed’s intention to raise interest rates through 2023 has raised recession fears. Despite the uncertain macroeconomic environment, some sectors have remained resilient due to the inelastic demand for their products.

With the economy expected to enter a recession later this year, investing in the defensive sector could add cushion to one portfolio.

To that end, The Procter & Gamble Company (PG) and Bridgestone Corporation (BRDCY) could be solid choices, given their strong fundamentals, reliable dividend payouts, and inelastic demand for their products.

The Procter & Gamble Company (PG)

PG provides branded consumer packaged goods worldwide. It operates through five segments: Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care.

Over the last three years, PG’s dividend payouts have grown at a 6.9% CAGR. Its four-year average dividend yield is 2.46%, and its forward annual dividend of $3.65 per share translates to a 2.41% yield. It paid a quarterly dividend of $0.91 per share on November 15, 2022.

PG’s net sales for the first quarter ended September 30, 2022, increased 1.3% year-over-year to $20.61 billion. Its current assets came in at $22.52 billion, compared to $21.65 billion as of June 30, 2022. Moreover, the company’s net EPS came in at $1.57.

Analysts expect PG’s EPS for the quarter ending March 31, 2023, to increase 1.8% year-over-year to $1.35. Its revenue for fiscal 2024 is expected to increase 3.6% year-over-year to $82.81 billion. It has an impressive earnings surprise history, surpassing the consensus EPS estimates in three of the trailing four quarters.

Over the past three months, the stock has gained 17.9% to close the last trading session at $151.57.

PG’s positive outlook is reflected in its POWR Ratings. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Within the Consumer Goods industry, it is ranked #14 out of 59 stocks. It has an A grade for Stability and a B for Sentiment and Quality.

Click here to see the additional PG ratings for Growth, Value, and Momentum.

Bridgestone Corporation (BRDCY)

Headquartered in Tokyo, Japan, BRDCY manufactures and sells tires and rubber products worldwide. It operates through two segments, Tires, and Diversified Products.

BRDCY’s four-year average dividend yield is 3.56%, and its trailing-12-month dividend of $0.65 per share translates to a 3.44% yield.

BRDCY’s revenue for the nine months ended September 30, 2022, increased 28.4% year-over-year to ¥2.98 trillion ($22.83 billion). The company’s gross profit increased 21.2% year-over-year to ¥1.15 trillion ($8.81 billion). Moreover, its operating profit increased 11% from the prior-year quarter to ¥307.23 billion ($2.35 billion).

BRDCY’s revenue for the fiscal quarter ended December 31, 2022, is expected to increase 7.3% year-over-year to $7.83 billion. Its EPS for fiscal 2023 is expected to increase 31.7% year-over-year to $1.81. Over the past three months, the stock has gained 6% to close the last trading session at $17.71.

BRDCY’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall rating of A, which equates to a Strong Buy in our proprietary rating system. It is ranked #5 out of 62 stocks in the A-rated Auto Parts industry. In addition, it has an A grade for Stability and Quality and a B for Growth.

We have also given BRDCY grades for Value, Momentum, and Sentiment. Get all BRDCY ratings here.

PG shares were trading at $151.87 per share on Wednesday afternoon, up $0.30 (+0.20%). Year-to-date, PG has gained 0.20%, versus a 0.34% rise in the benchmark S&P 500 index during the same period.

About the Author: Malaika Alphonsus

Malaika's passion for writing and interest in financial markets led her to pursue a career in investment research. With a degree in Economics and Psychology, she intends to assist investors in making informed investment decisions. More...

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