Initially, the March jobs report seemingly boded well for the economy, thus negating the urgency tied to recession-resistant stocks. However, the latest consumer price index (CPI) reading suggested that not all may be well, forcing a portfolio reassessment.
Primarily, inflation is coming in hotter than anticipated due to soaring energy prices. Unfortunately, the strong labor market happens to be exacerbating this dynamic. After all, a lower unemployment rate implies more dollars are chasing after fewer goods.
Given this framework, investors may want to play into present realities. Here are relevant recession-resistant stocks to consider.
Essential Utilities (WTRG)
Operating under the namesake industry, Essential Utilities (NYSE:WTRG) focuses on the regulated water space. Through its subsidiaries, Essential provides water, wastewater and natural gas services in the U.S. Per its public profile, the company serves approximately 5.5 million customers, which include the full spectrum of residential and commercial/industrial customers.
Fundamentally, it’s one of the best ideas for recession-resistant stocks because of the permanent relevance. Basically, people can’t live without water management and services. Its earnings performance last fiscal year reflects that, with the company generating consistent profitability.
For the current fiscal year, experts believe that earnings per share will land at $1.98, above last year’s print of $1.86. Also, revenue could hit $2.37 billion, shooting up 15.5% from last year’s haul of $2.05 billion. For fiscal 2025, EPS could hit $2.13 on revenue of $2.53 billion.
Notably, analysts rate shares a unanimous strong buy with a $41.50 price target, implying 19% upside potential.
Cheniere Energy (LNG)
On the surface, Cheniere Energy (NYSE:LNG) might not seem a compelling idea for recession-resistant stocks. While hydrocarbon specialists are known for their tremendous relevance, they can also be volatile. If economic conditions don’t align favorably, companies like Cheniere could suffer demand headwinds. Still, the current geopolitical backdrop suggests LNG may have a surprisingly bright future.
Essentially, Russia has demonstrated zero signs of slowing its military belligerence in Ukraine. Further, European nations are slowly waking up to the reality that the conflict could drag on for years. In addition, flashpoints in other parts of the world present high potential for energy disruptions. Key commodities will likely be in huge demand, making Cheniere a cynically bullish play.
One look at the earnings history for fiscal 2023 gives you a sense of what’s happening: the average positive earnings surprise came out to 174.5%. That’s just stunning. Yet experts are suggesting that both earnings and growth could slow dramatically in fiscal 2024.
In my opinion, that’s hard to believe. Indeed, the unanimous strong buy rating tells you everything you need to know.
Barrick Gold (GOLD)
Falling under the basic materials industry, Barrick Gold (NYSE:GOLD) engages in the exploration, mine development, production and sale of gold and copper properties in Canada and internationally. It also explores and sells silver and energy materials. Therefore, GOLD ranks among the recession-resistant stocks for the underlying myriad relevancies.
Of course, one of the main cynical catalysts for GOLD stock is the namesake asset’s response to inflation. With the March jobs report coming in so hot, it’s likely that inflation will rise so long as employers keep hiring. It’s also anathema for a central bank to cause unemployment to shoot higher just to curb high prices. So, inflation could be sticky for a while.
What does that mean for the yellow metal? Quite frankly, I’m thinking up, up and away. Last fiscal year, Barrick’s average positive earnings surprise clocked in at 20.38%. For the current fiscal year, analysts are anticipating EPS growth of 15.5% to 97 cents.
On the top line, sales could rise to $12.42 billion, up almost 9%. It’s one of the recession-resistant stocks to consider.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.