It’s frightening to see the value of your portfolio decline. That’s why, in a market crash, it’s a good idea to have stocks that have both competitive advantages and resilient business models. Strong and well-known brands help businesses when things are tough. And if they’re dependable dividend payers, all the better. That shows healthy, constant cash flow generation, which can help investors weather market storms.
As investors we’ve been dealing with a lot of economic uncertainty, between the Russia-Ukraine war, the highest inflation in 40 years, and ongoing supply chain issues.
Furthermore, the Federal Reserve will likely raise interest rates to prevent price inflation. However, it will have to walk a tightrope not to induce a recession. Meanwhile, specific sectors like technology stocks, have sold off significantly, and the Nasdaq Composite Index (^IXIC) has recently gone into bear-market territory.
With all this uncertainty and resulting volatility, what better time to visit three stocks we like for a market crash.
Visa (NYSE:V) is one of the world’s largest digital payment companies, allowing consumers, banks, and merchants to make transactions in more than 200 countries. During the pandemic, the firm has demonstrated its mettle by recording net revenue of $24.1 billion in its fiscal 2021. That net revenue is up from $23 billion in the previous year. In addition, operating and net income were both running ahead of their pre-pandemic levels at $15.8 billion and $12.3 billion, respectively, during FY 2021.
The pandemic caused a massive shift in the financial infrastructure. Payments volumes increased from $8.8 trillion to $10.4 trillion from 2019 to 2021, and transaction numbers rose from 138.3 billion to 164.7 billion during the same time frame. Visa’s payments volume has been growing at a rate of 20%, with net revenue growing 24% annually as of 2021, according to first-quarter results for 2022.
Billionaires love to buy Visa stock. It’s a tech stock that pays a dividend; Visa has a long history of dividend increases, having raised its payout every year since it went public in 2008. Visa’s most recent quarterly payout was $0.375 per share, for an annual payout of $1.50 per share. At current stock prices, that yields approximately 0.8%. Moreover, there might be more good news on the way for investors, as Visa recently announced that consumer spending momentum has returned following COVID-19 case count lows from omicron-wave peaks.
Visa has also recently completed its acquisition of Tink. Tink is an open banking platform that allows financial institutions and fintech firms to develop financial products and services. That deal should enable Visa to expand its reach while gaining a more extensive customer base.
Procter & Gamble
Look no farther than Procter & Gamble (NYSE:PG) if you’re looking for a dependable investment in the consumer goods sector. Procter & Gamble, which owns 60+ well-known brands including Pantene, Gillette, and Oral-B and sells its items in over 180 countries, has been in operation since 1837
Despite the pandemic, the firm has consistently increased sales over the previous five years, from $65.1 billion in fiscal 2017 to $76.1 billion in fiscal 2021, which ended on June 30. Over the same period, operating cash flow rose from $12.8 billion to $18.4 billion. Furthermore, per-share dividend payouts increased from $2.70 per share to $3.24 per share during the same period. It also holds the rare distinction of being a Dividend King. It has successfully increased its dividends for 65 consecutive years.
The firm’s financial performance has remained healthy. Net sales increased 6% to $20.9 billion for the fiscal 2022 second quarter, which ended December 31, according to Procter & Gamble. In addition, the first half of its fiscal 2022 produced $8 billion in free cash flow, more than enough to cover the dividend hikes. As another technique of increasing shareholder value, the firm has committed between $9 billion and $10 billion to stock buybacks. Because of this, PG is a solid stock for a market crash.
Nike (NYSE:NKE) has a long history of success, providing investors with the confidence that their money will be well spent. Moreover, investors may count on Nike to bring the goods. Nike is known for its cutting-edge sports shoes, which help players perform at their best.
On the commercial front, its successful shift to a more focused model on direct online sales helped to minimize the influence of physical store closures during the pandemic. Revenue grew strongly in its fiscal 2021, which ended May 31, returning to $44.5 billion. In comparison to $37.4 billion in fiscal 2020. While net income increased to $5.7 billion, surpassing the pre-pandemic level of $4 billion from FY 2019.
Nike’s sales keep growing. Digital sales increased 12% year over year in the company’s most recent quarter, ending November 30, 2022 (Q2). Meanwhile, gross margin rose by 2.8 percentage points to 45.9%. Revenue climbed 8% year over year during the first half of fiscal 2022, while earnings climbed 16% to $3.2 billion. The firm continued to produce a healthy free cash flow of $3.5 billion. In addition, it increased its quarterly payout to $0.305 per share.
Nike is ready to speed up its digital transformation with the acquisition of RTFKT. RTFKT is a company that creates virtual sneakers and crypto-collectibles. The goal is to exploit this business to create and market NFTs of Nike shoes and other Nike-branded collectibles. This, allowing the firm to access a new source of income.