2 Beaten-Down Stocks That Benefit From Recessions

NYSE: PG | Procter & Gamble Co. News, Ratings, and Charts

PG – The red-hot inflation and the Fed’s aggressive rate hikes are raising the odds of the economy tipping into a recession. However, consumer goods and grocery stocks usually withstand the market turbulence because of stable demand for their products irrespective of the overall economic condition. And we think beaten-down consumer goods and grocery stocks, Procter & Gamble (PG) and Walmart (WMT), are well-positioned to survive the recession, given their fundamental strength. Read on to find out more…

The Fed has launched a 75-basis points rate hike this month, the most aggressive rate hike in decades. Moreover, it is expected to deliver another 75-basis-point interest rate hike next month and a half-percentage-point rise in September. The aggressive rate hikes are raising recession concerns, leading to a steep sell-off in the market.

According to Morgan Stanley analysts, “At this point, a recession is no longer just a tail risk given the Fed’s predicament with inflation.” However, consumer staples and grocery stocks usually hold up well in times of recession, as they enjoy a steady demand for their products.

Given this backdrop, we think it could be wise to buy beaten-down consumer goods and grocery stocks, The Procter & Gamble Company (PG) and Walmart Inc. (WMT), which are well-positioned to survive the recession.

The Procter & Gamble Company (PG)

PG provides branded consumer packaged goods to consumers in North and Latin America, Europe, the Asia Pacific, Greater China, India, the Middle East, and Africa. It operates in five segments- Beauty; Grooming; Health Care; Fabric & Home Care; and Baby, Feminine & Family Care.

On June 8, 2022, PG and Microsoft Corp. (MSFT) announced their new multi-year collaboration, whereby MSFT will help enhance digital manufacturing at PG. The companies expect this to be a game-changer in automated manufacturing.

For the third quarter ended March 31, 2022, PG’s net sales increased 7% year-over-year to $19.38 billion. The company’s net earnings came in at $3.35 billion, up 2.6% year-over-year, while its EPS came in at $1.33, up 5.6% year-over-year. Also, its operating income rose 6.3% year-over-year to $4.02 billion.

PG’s revenue is expected to increase 5.3% year-over-year to $80.14 billion in 2022. Its EPS is expected to grow 5.3% per annum for the next five years. It surpassed EPS estimates in each of the trailing four quarters.

The stock has lost 15.3% year-to-date to close the last trading session at $138.50.

PG’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which indicates a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

PG has a B grade for Growth, Stability, and Quality. Within the Consumer Goods industry, it is ranked #5 out of 61 stocks. Click here for the additional POWR Ratings for Value, Momentum, and Sentiment for PG.

Walmart Inc. (WMT)

WMT engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments- Walmart U.S.; Walmart International; and Sam’s Club. 

On June 16, 2022, WMT and Roku, Inc. (ROKU) announced their partnership to make TV streaming the next e-commerce shopping destination. This pioneer collaboration of streaming commerce aims to serve consumers better and has already grabbed many eyeballs.

For the first quarter ended April 30, 2022, WMT’s total revenues came in at $141.57 billion, up 2.4% year-over-year. Its total current assets came in at $83.22 billion, up 8.7% year-over-year. Also, its long-term debt decreased 20.1% year-over-year to $32.17 billion.

Analysts expect WMT’s revenue to be $595.67 billion in fiscal 2023, representing a 4% year-over-year increase. The company’s EPS is expected to rise 9.5% per annum for the next five years. In addition, it has surpassed the consensus EPS estimates in three of the trailing four quarters.

The stock has lost 16.6% year-to-date to close the last trading session at $120.69.

WMT’s overall B rating equates to a Buy in our proprietary POWR Ratings system. In addition, it has a B grade for Stability.

WMT is ranked #13 out of 38 stocks in the A-rated Grocery/Big Box Retailers industry. Click here to see the additional POWR Ratings for WMT (Growth, Value, Momentum, Sentiment, and Quality).


PG shares were trading at $141.95 per share on Thursday afternoon, up $3.45 (+2.49%). Year-to-date, PG has declined -12.26%, versus a -19.83% rise in the benchmark S&P 500 index during the same period.


About the Author: Riddhima Chakraborty


Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
PGGet RatingGet RatingGet Rating
WMTGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Bear Market Game Plan Revealed!

The bear market has been firmly in place all year long. Just some folks didn’t get the memo til 6/13 when the S&P 500 (SPY) finally broke below the 20% decline level at 3,855 to appreciate just how bad things had become. That is the past. We need to focus on the future like how low the stocks will go...and the best trades to stay on the right side of the market action. All that and more is in Steve Reitmeister “Bear Market Game Plan”. Read on below for more...

:  |  News, Ratings, and Charts

Insiders Are Making Big Buys In Carvana – Should You?

Used car retailer Carvana (CVNA) has seen significant insider buying recently, reflecting bullish sentiments. However, given its bleak bottom-line positioning, should you invest in the stock now? Read on to find out...

:  |  News, Ratings, and Charts

Don’t Get Fooled by the Recent Market Rally

The S&P 500 (SPY) has bounced with gusto this week. Maybe the bear market is not here to stay? Ha! Don't make me laugh. This is just one in a long line of "suckers rallies" before the next leg lower. The reasons why are spelled out below in this week's market commentary...

:  |  News, Ratings, and Charts

3 Top-Rated High-Dividend Stocks Under $20

The Fed’s aggressive interest rate hikes in the face of the rising inflation are raising the possibility of the economy tipping into a recession. Given the market uncertainties, high-dividend stocks Sisecam Resources (SIRE), Grindrod Shipping (GRIN), and Alliance Resource (ARLP), which are currently trading under $20, could be an ideal investment to ensure a stable income stream. These stocks are rated Strong Buy or Buy in our proprietary rating system. Keep reading…

:  |  News, Ratings, and Charts

Don’t Get Fooled by the Recent Market Rally

The S&P 500 (SPY) has bounced with gusto this week. Maybe the bear market is not here to stay? Ha! Don't make me laugh. This is just one in a long line of "suckers rallies" before the next leg lower. The reasons why are spelled out below in this week's market commentary...

Read More Stories

More Procter & Gamble Co. (PG) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All PG News