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There’s not much that investors can know in advance, except that stock market crashes always catch Wall Street by surprise. This “shock” factor can be said to be a characteristic of the market crash. In fact, a crash only occurs when short-term earnings expectations change significantly downward.
Of course, no stock price is immune to overall market declines. However, there are some companies that tend to perform better no matter what tough sales environment comes our way. Take a look at two of these solid stocks that are worth adding to your portfolio.
1. McDonald’s
mcdonalds (MCD -0.35%) has been selling its signature Big Mac sandwich for more than 50 years, and its dividend has been increasing for almost as long. In fact, the fast food giant has raised its dividend every year for the past 47 years.
Such a streak would not be possible without some significant competitive advantage, which McDonald’s clearly enjoys right now. Examples include overwhelming market share in the global industry, pricing power, and ownership of one of the most valuable brands on the planet. It also helps that Mickey D’s is able to meet the needs of a wide range of fast food fans through affordable menus and more indulgent snacks, drinks and meals.
McDonald’s has been good at reinventing itself in line with changing consumer tastes, recently improving the quality of its food and increasing the speed of delivery and takeout. You can see evidence of the company’s success in his impressive same-store sales growth of 9% in the past quarter.
The chain’s operating margin is close to 50% of sales, giving it even more impressive profit metrics. Investors should be happy to have such a successful business in their portfolios during market ups and downs alike.
2. Procter & Gamble
Don’t look now. But you probably have some products in your home made by the companies below. procter and gamble (PG -0.69%). The company dominates consumer categories used by millions of people every day, including paper towels, laundry detergent, diapers, skin creams and health care products. Demand for these consumer staples typically doesn’t plummet during a recession, and shoppers tend to stick with brands they’ve trusted for years.
None of this is to say that P&G is a recession-proof stock. For example, the business has recently seen a decline in sales volumes as shoppers cut back on the frequency of their purchases while prices are expected to rise in 2023.
Still, P&G is gaining market share in a difficult sales environment. Its profitability significantly exceeds its peers, including: kimberly clark In the same way.
The company is likely to announce a sizable dividend increase in April, marking its 68th consecutive increase, on expectations for strong earnings growth in the just-ended fiscal year. Remember that P&G has been paying dividends since the 1890s, that is, since the 1890s. This impressive record reflects one of the great benefits of maintaining a leading market position in the consumer staples industry. It also suggests that shareholders will be happy to own this stock through a bull market or the next market surprise.
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