After the March crash and the ongoing discussion about whether the stock market is linked to macroeconomic fundamentals, savvy investors have the right to plan for a future downturn. Buying any of these three shares during a market crash or recession helps protect the overall value of your portfolio while ensuring that you take advantage of the market’s recovery afterwards.
Johnson & Johnson
Johnson & Johnson (NYSE: JNJ) is one of the world’s largest companies with a market value of $ 377 billion and $ 83 billion in trailing twelve-month revenue. Thanks to its cornucopia of healthcare products, dozens of different drugs under development and a massive list of consumer products with steady demand, Johnson & Johnson is positioned to maintain its value – and dividend yield of 2.66% – even as the market crashes.
As demonstrated by its profit margin of almost 21%, the company succeeds in the massive, highly competitive markets where it operates – markets where growth is very difficult to obtain. This means that, following a crash, Johnson & Johnson is prepared to bounce back as soon as possible, although consumer demand is declining. It also means that the company’s normal operations have left it with more than $ 18 billion in the bank, which it can later use to weather a decline more gracefully than its competitors.
However, potential investors should note that due to their previous activity during crashes, this stock price is likely to go completely against the trend, so it is probably preferable to wait for the steepest market losses to decrease before investing.
Thermo Fisher Scientific
Thermo Fisher Scientific (NYSE: TMO) does not have the broad base of consumer goods that Johnson & Johnson has, but it has a reliable presence in the pharmaceutical, chemical and biotechnology industries.
Because Thermo Fisher sells products in each segment of the value chain in each of these industries, it is remarkably resilient: Thirty-nine percent of the company’s revenue last year came from laboratory products and services, which means that, even if the market thinking, the ongoing efforts to contain The pandemic will guarantee Thermo Fisher a steady revenue stream.
In addition, only half of Thermo Fisher’s revenue is from sales in North America, and the company’s Chinese market grew by 13% in 2019, making it geographically more diversified. This means that if a market crash disproportionately affects a regional market, Thermo Fisher’s international operations can spare it from a total route.
As a mature company, Thermo Fisher has a respectable profit margin of 14.3% and revenues of $ 25.7 billion, providing the difficulty it needs to adapt to changing conditions. Even if its dividend is less than half a percent, a market crash would be the perfect time to take the Thermo Fisher stock at a discount – something that investors may have to wait a lot for, given the stock’s price-to-earnings ratio of about 42 suggests that it may currently be overvalued.
Bristol Myers Squibb
Bristol Myers Squibb (NYSE: BMY) is one of the world’s leading pharmaceutical companies and perhaps the single strongest competitor in the markets for oncology, immunology and hematology drugs, making it a relatively innovative stock to buy during a downturn. While its profit margins are narrow at 3%, the company has dozens of different drugs under development or because of regulatory approval, which should guarantee its future viability as well as future revenues.
The company’s pipeline is so filled with late-stage projects that even during a serious crash, its stock could be repeatedly flexed by a stream of positive news about newly approved indications or advances through clinical trials.
In addition, with a future dividend of 3% and a leadership with a history of increasing the dividend and repurchasing shares, Bristol Myers Squibb is a favorite among healthcare investors. As with Thermo, the company’s price-to-profit ratio of 94 indicates that it is overvalued, which means that a market crash would be a good time to buy it at a discount.