3 Stocks To Depression Proof Your Portfolio

We’re already in a recession. But in the coming months I don’t think we’re looking at another bad recession… I think we’re looking at a depression type scenario.

As of this writing there are already more than 30.5 million Americans unemployed and getting state or federal government assistance.

50 million jobs have been lost since March.

Millions of Americans can no longer pay their bills.

Businesses are going bankrupt rapidly.

Banks and hospitals are having major financial issues.

This was from the first set of lockdowns. And we’re dealing with the worst economy since The Great Depression.

Now with new coronavirus cases exploding nationwide cities and states are locking things down again.

And things are poised to get even worse economically for us all because of the horrific things above.

These first coronavirus lockdowns crippled the US economy like nothing we’ve seen in our lifetimes.

I think analysts, politicians, and officials who talk about us going through a recession are delusional.

We’re not heading toward a recession.

We’re headed toward a depression type of economy.

And few in the mainstream media and financial news are talking about this.

A month ago I showed you 3 Stocks That Will Earn You High Returns In The Coming Depression .

Today I begin showing you 3 Stocks To Depression Proof Your Portfolio.

These stocks will help you earn safe and solid investment returns no matter whether we’re in a prolonged depression. Or whether we recover and go back to normal life tomorrow.

Let’s get to Stock #1…

Depression Proof Stock #1 – Procter & Gamble (PG)

No matter what kind of financial situation the next few months or years brings people won’t stop using basic necessary items we all use every day like toilet paper, kids’ diapers, toothpaste, shaving razors, shampoo, etc.

And Procter & Gamble (PG) is the largest provider of these kinds of products in the world.

Many of its brands are recognized and used worldwide. And some are likely in your house right now.

Pampers – diapers
Bounty – paper towels
Charmin – toilet paper
Gillette – shaving products
Head & Shoulders – Shampoo
Old Spice – deodorant, hair, and skin care.
Febreze – deodorizing your house
Crest – toothpaste

And on and on.

PG owns many of the largest brand names in the world that not only you and I use every day. But that many of us have used our entire lives.

This won’t stop because of any pandemic.

Plus, its also a solid company as well.

Its operating profit margin averaged 19.4% every year over the last 10 years. I look for any company to produce above 10% margins on a consistent basis to consider as an investment.

And its FCF/Sales margin averaged 14.6% per year… I look for anything above 5% on a consistent basis to consider an investment.

Why do I use both these metrics and why are they so important?

Because they show how profitable a company truly is from its operations… And how much cash flow a company produces from each sale.

PG meets my threshold on both important metrics… These are important because they show it produces more than enough profits and cash to continue funding operations and growth.

Plus, PG also pays you a 2.7% dividend just to own their shares. This is another benefit of huge profits and cash flow.

On top of this its selling at a reasonable price to cash flow (P/CF) ratio of 17.9 as of this writing.

I want to own companies that are profitable and at least fairly valued. And I look to research stocks further that have a P/CF of 25 or lower… If I can buy at cheaper prices even better.

PG will be around for decades to come – no matter what the economic situation becomes. And its priced at a reasonable level today.

Because of this, you should look at them if you’re looking for Depression resistant stocks.

Conclusion

As I said above, I think we’re heading not for an average recession… Or even a bad recession like we saw from 2007 to 2009.

I think we’re heading for a Depression type of economy in the coming months. And the best thing to do is prepare yourself and your investments.

The list above should give you great ideas on stocks that will not only survive whatever downturn is still to come. But also thrive in the coming years and decades no matter what our economic situation looks like.

Use the links below to learn other ways to protect yourself in these uncertain times.

Tomorrow, I’ll show you the 2^nd stock in our series 3 Depression Proof Stocks To Buy that will help you Depression proof your portfolio.

Disclosure – Jason Rivera is a 13+ year veteran value investor who now spends much of his time helping other investors earn higher than average investment returns safely. He does not have any holdings in any securities mentioned above and the article expresses his own opinions. He has no business relationship with any company mentioned above.