The economy often moves in cycles of expansion and contraction. Contracting markets are also known as recession. During these times regular portfolios may not work well and risky plays like tech stocks and crypto are likely to suffer the most.

To balance your portfolio, it’s prudent to consider adding stocks that aren’t as negatively affected in a recession as most are.

PepsiCo Inc.

PepsiCo, Inc. (NASDAQ: PEP) is one of the largest beverage and snack companies in the world. Its product portfolio includes Pepsi, Gatorade, Lay’s, Doritos, Tropicana, Quaker Oats and many more. The company currently has a 2.74% annual dividend yield.

In its Q2 earnings report, Pepsi beat analyst expectations and set guidance for strong growth throughout 2023. Pepsi projects organic revenue growth at 10% and growth in earnings per share at 12%.

Chairman and CEO Ramon Laguarta said:

“Moving forward, we will look to elevate our focus on productivity initiatives to further support investments in innovation, brand building, digitalization, and sustainability to win in the marketplace and fortify our businesses for the long-term.”

Analyst consensus at TipRanks is a ‘moderate buy’ for the stock with an average target price of $204 for the next 12 months. That’s 10% higher than the current price of $184 per share.

TipRanks analyst ratings. Source: Interactive Brokers Fundamentals Explorer

Johnson & Johnson

Johnson & Johnson (NYSE: JNJ) is a multinational healthcare company engaged in research and development, as well as manufacturing and sale of healthcare products. The company pays out a 2.75% dividend yield.

Its Q2 earnings report beat analyst expectations, with revenue up 3.2% from the previous quarter and 5.5% up from the same quarter last year. This shows demand for some of its innovative drugs. The company has several promising drugs in its pipeline as well, which should help increase revenue and growth.

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Despite that, analyst consensus remains a ‘moderate buy’ with an average price target of $182, a 5% gain from the current price of $173.

TipRanks analyst ratings. Source: Interactive Brokers Fundamentals Explorer

Both Pepsi and Johnson & Johnson share prices have underperformed S&P 500’s 17% return year to date with 2.8% return and a -2.8% respectively. These numbers could easily change if we enter a recession.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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Dennis is a business and financial writer, who had spent almost his entire life independently reporting on different business ventures with major impact on the US and global economy. Dennis places a special focus on examining tech stocks, biotech stocks all while investing a great part of his early hours to researching and writing on the companies in the US markets. Dennis has 15+ years of experience in financial markets.