Five consumer stocks show history of resilience in market downturns

Investors are asking whether a market crash is coming as the S&P 500 approaches a fourth consecutive year of double-digit gains. While a crash affects most portfolios, certain defensive and value stocks have a history of holding up or even thriving under adverse circumstances. The Motley Fool identifies Costco Wholesale, TJX Companies, Coca-Cola, Procter & Gamble, and Walmart as stocks with this track record, noting that all five pay dividends. Coca-Cola, Procter & Gamble, and Walmart are classified as Dividend Kings, having raised their dividends for at least 50 consecutive years.

Costco's low prices become more valuable during economic pressure. The company reported sales growth of 13% year over year in September, a period when inflation rose another 3.7%. Costco stock is up 14% year to date. The article notes that while Costco underperformed the S&P 500 in 2022, it gained 49% the following year, nearly double the index's gain.

TJX Companies operates as an off-price retail chain, buying overstock and off-season merchandise from 21,000 vendors. It sells products at 20% to 60% off retail prices in its 5,200 global stores. In the fiscal 2027 second quarter ended August 1, sales increased 4% year over year, and earnings per share rose 24%. The stock barely beat the market in 2008 but gained 81% in 2009, triple the market's rebound.

Coca-Cola is the world's largest beverage company with brands that maintain sticking power regardless of economic conditions. The company has raised its dividend for the past 64 years. In the second quarter, sales increased 7% year over year, and earnings per share rose 16%. The stock is up 40% this year, outperforming many tech stocks.

Procter & Gamble produces household and hygiene essentials such as Tide laundry detergent, Oral-B oral care, and Bounty paper towels. The company has one of the longest dividend-raise track records at 70 years. The publication cites the early pandemic period, when the stock soared as consumers stocked up on Charmin brand toilet paper, as an example of its resilience.

Walmart is the largest retailer in the world with almost 11,000 stores, reaching 90% of the U.S. population within 10 miles. In the fiscal 2027 second quarter ended July 31, e-commerce sales increased 23% year over year, driving total sales growth of 5.9%. Walmart has raised its dividend annually for the past 53 years.