3 Recession-Proof Stocks to Buy With $3,000

With the earliest doses of a vaccine being distributed to frontline workers and other vulnerable populations, investors are increasingly bullish about what the 2021 stock market may have in store. But, some experts aren’t convinced. For example, at a virtual summit for the Financial Times in November, legendary hedge funder Bill Ackman expressed his concern that…

the prospect of a light at the end of the tunnel would cause the general public to revert to laxity, promoting a surge in coronavirus cases and another market downturn.

Whether or not the market will dip again before a COVID-19 vaccine becomes widely available is anyone’s guess. The good news is, the way you structure your basket of stocks and investing approach is entirely up to you. If you’re concerned about another recession putting a dent in your portfolio, consider these three companies that can bring you growth and value for years to come.

West Pharmaceutical

West Pharmaceutical Services (NYSE:WST) certainly isn’t the most glamorous of stocks, but this company that makes drug packaging and delivery products has had a remarkable year even as other healthcare companies struggle against pandemic headwinds. The company qualifies as a large-cap stock, with a current market capitalization of nearly $21 billion. Shares have risen 83% since the beginning of the year, a sign that investors are increasingly paying attention to this lesser-known stock. West Pharmaceutical also pays a dividend, albeit a modest 0.24%.

The primary reason West Pharmaceutical has fared so well during the pandemic is the nature of its product portfolio. As a “a leading manufacturer of packaging components and delivery systems for injectable drugs and healthcare products”, the company’s products are always going to be in demand, regardless of market conditions. This makes it an attractive buy and a solid choice to counterbalance riskier stocks in your portfolio.

During the first, second, and third quarters of 2020 (ended March 31, June 30, and Sep. 30), the company recorded 10.8%, 12.2%, and 20.1% net sales growth, respectively, from the same quarters in 2019. West Pharmaceutical also reported double-digit increases to its adjusted diluted and reported diluted earnings per share during each of these quarters. Between January and September, the company grew its operating cash flow by more than 24% compared to the corresponding stretch in 2019, the result of which was it closing the third quarter with $519 million in cash and cash equivalents and only $256 million in debt on its balance sheet.

Management has said that it expects West Pharmaceutical’s full-year organic sales to grow between 14% and 15% from last year. Previously, management had estimated 12% organic sales growth for 2020, so this guidance boost is a testament to the company’s stellar performance in the worst-hit economy since the Great Depression. With analysts forecasting more than 20% annual earnings growth for West Pharmaceutical over the next five years alone, this stock is an ideal candidate for buy-and-hold investors.

Apple

If ever there was a recession-proof stock to buy, Apple (NASDAQ:AAPL) is unequivocally it. Apple’s sales growth can’t be characterized as above average, but it is consistent. During fiscal 2020 (ended Sep. 26), Apple grew its total net sales 6% from fiscal 2019. The company also posted…

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