If a Recession Is Coming, You'll Want to Own These 2 Stocks

While no business is recession-proof, specific sectors offer investors recession-resistant stocks whose products and services are inelastic in demand—even during market or economic downturns. With weakening macro data continuing to suggest the economy is on the brink of a recession, shoring up your portfolio with some companies operating in consumer staples could prove to be prescient.

Of course, in a market news cycle dominated by AI advances and small-scale nuclear startups, the big-and-boring stocks that call consumer staples home aren’t considered sexy investments. The sector’s YTD gain of 2.18% hasn’t been inspiring.  

But what these stocks lack in dramatic price swings, they make up for as hedges. When economies sour, households continue allocating funds for food, personal care products and cleaning supplies. And for companies that have established economic moats, they are the go-to options when budgets are stretched thin. 

Walmart: A Dividend and Grocery King

Founded in 1962 by Sam Walton, Walmart (NYSE: WMT) has increased its dividend for 53 consecutive years, making it a member of the elite Dividend Kings club. It currently yields 0.91%, or 24 cents per quarter. Beyond paying investors to endure market downturns or recessions, the stock is the ideal defensive position. 

Walmart consistently ranks as America’s largest grocer, both in sales and market share. With 4,700 stores and clubs, the grocery sales produced $276 billion in revenue in its fiscal 2025—good for roughly 60% of Walmart’s total net sales. 

Starting at just $50 per year, the company’s Sam’s Club business line offers consumers a more affordable membership alternative to Costco (NASDAQ: COST). That segment saw year-over-year (YOY) net sales, excluding fuel, increase by 6% from FY 2025. The company specifically attributed that growth to strong sales in groceries as well as health and wellness. Sam’s Club membership income increased 7.5% YOY, underscoring its role as a legitimate Costco competitor. 

Walmart+ Is an E-Commerce Disruptor

Beyond its traditional consumer staples role, Walmart has diversified its service offerings while emerging as a top competitor of Amazon (NASDAQ: AMZN) in the e-commerce space. Its Walmart+ subscription provides members with benefits including free shipping with no minimum orders, free grocery delivery on orders over $35 and a Paramount+ subscription, among others. 

In its Q2 2026 earnings report, the company announced 20% YOY e-commerce growth from its Walmart U.S., Sam’s Club, and Walmart International business segments. Walmart U.S. and Walmart International saw an increase in e-commerce by 26% and 25% respectively.   

WMT’s been particularly resilient in downturns. Looking at the last bear market from Jan. 3, 2022, to Oct. 12, 2022, shares slid ~10%. A loss isn’t ideal, but at the same time, high-flyers like Microsoft (NASDAQ: MSFT) fell by more than 22%, while Alphabet (NASDAQ: GOOGL) and Amazon fell by more than 29% and 34%, respectively.

Whether the smart money is anticipating a recession is yet to be seen, but institutional inflows over the past 12 months of $51.36 billion have outpaced outflows of $21.66 billion. Meanwhile, short interest stands at a miniscule 0.49%.

Dollar General: The 86-Year-Old Budget Behemoth

Founded in 1939, Tennessee-based Dollar General (NYSE: DG) might not have the market share of Walmart, but with more than 20,000 locations, the small-format budget retailer boasts more locations across the United States. During the last bear market, the stock managed to fall by less than 1% while paying a dividend that currently yields 2.26%, or 59 cents per quarter.  

Known for its budget offerings, Dollar General is seeing higher-income households shop at its stores as inflation and tariffs continue driving up consumer prices. That was reflected in Dollar General’s Q2 earnings call, during which it reported that same-store sales increased by 2.8%. 

Much of that is due to the bargain chain offering 2,000 SKUs at or below the $1 price point. Those budget goods have been a major driver of the company’s recent sales growth.

CEO Todd Vasos noted during his remarks that $1 and below products were “one of [Dollar General’s] strongest performing areas in the quarter,” which contributed to “same store sales growth more than twice the rate of the overall company.” 

In an era of runaway valuations, Dollar General’s forward P/E of 18.50 seems like as good of a bargain as the items on its shelves. The company’s operating income has increased from $9.34 billion in Q1 2023 to over $10.4 billion in Q1 2025, reflecting steady top-line growth.

If following the money is any suggestion of how Wall Street feels about this stock, institutional ownership stands at a noteworthy 91.77%, with short interest of 3.78% of the float.

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