5 Companies and Industries That Make Money During A Recession

In this article, we will be taking a look at 5 companies and industries that make money during a recession. To read our detailed analysis of inflation-resistant companies and sectors, you can go directly to see the 10 Companies and Industries That Make Money During A Recession.

5. AutoZone, Inc. (NYSE:AZO)

Industry: Automotive Retail

S&P 500 Outperformance in 2008: 27.12%

AutoZone, Inc. (NYSE:AZO) is a retailer and distributor of automotive replacement parts and accessories. The company is based in Memphis, Tennessee.

On December 7, David Bellinger at MKM Partners reiterated a Buy rating on AutoZone, Inc. (NYSE:AZO)  shares while raising his price target to $2,650.

Vehicle part retailers like AutoZone, Inc. (NYSE:AZO) tend to perform well in a weak economy, as more people choose to repair their cars instead of buying new ones. This was proven by the returns generated by the company between October 9, 2007, and March 9, 2009, which stood at 22%. The company also grew its sales by 5.7% in 2008.

Carillon Tower Advisers, an investment management company, mentioned AutoZone, Inc. (NYSE:AZO) in its second-quarter 2022 investor letter. Here’s what the firm said:

“AutoZone, Inc. (NYSE:AZO) sells automotive replacement parts and accessories. The company reported another solid quarterly update that highlighted particularly robust growth in its commercial segment, market share gains, and stable gross margins. Additionally, investors have appreciated the company’s historically stable business model that is positioned to perform well in periods of economic stress.”

4. Accenture Plc (NYSE:ACN)

Industry: Information Technology

S&P 500 Outperformance in 2008: 29.5%

Accenture Plc (NYSE:ACN) is a professional services company that provides strategy and consulting, technology, and operation services globally. It is based in Dublin, Ireland.

Wells Fargo’s Jeff Cantwell initiated coverage of Accenture Plc (NYSE:ACN) shares with an Equal Weight rating and a $289 price target on January 30.

In 2008, Accenture Plc (NYSE:ACN) outperformed the S&P 500 by 29.5% because of its diversified consulting and services business. The company also performed well during the 2020 economic downturn, outperforming the benchmark by 7.8%.

3. Ross Stores, Inc. (NASDAQ:ROST)

Industry: Apparel Retail

S&P 500 Outperformance in 2008: 33.15%

Ross Stores, Inc. (NASDAQ:ROST) operates off-price retail apparel and home fashion stores. The company’s brands include Dress for Less and dd’s Discounts.

An Overweight rating was reiterated on Ross Stores, Inc. (NASDAQ:ROST) shares on January 13 by analyst Adrienne Yih at Barclays.

Between 2007 and 2009, Ross Stores, Inc. (NASDAQ:ROST) generated a total return of 10.1%. The company strives to offer 20%-60% savings on branded clothes compared to department stores. As such, during recessions the company has managed to perform well since it offers consumers a much cheaper alternative for quality clothing when money is tight.

Madison Funds, managed by Madison Investment Management, mentioned Ross Stores, Inc. (NASDAQ:ROST) in its fourth-quarter 2022 investor letter. Here’s what the firm said:

“The top five contributors for the quarter were Arch Capital Group, Ross Stores, Inc. (NASDAQ:ROST), Gartner, Markel, and PACCAR. Ross Stores is experiencing a difficult retail environment for the low-end consumer. However, results held up better than expected and the outlook appears to be improving.”

2. Abbott Laboratories (NYSE:ABT)

Industry: Healthcare Equipment

S&P 500 Outperformance in 2008: 33.6%

Abbott Laboratories (NYSE:ABT) is a company that discovers, develops, and sells healthcare products globally. It operates through its Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices segments.

An Overweight rating was reiterated on Abbott Laboratories (NYSE:ABT) shares on January 27. The analyst also placed a $125 price target on the stock.

Abbott Laboratories (NYSE:ABT) has a highly diversified business that helped it outperform the S&P 500 by 33.6% in 2008. The company also fared better than the benchmark in 2020, with its 9.8% beat.

Stewart Asset Management, an investment management firm, mentioned Abbott Laboratories (NYSE:ABT) in its third-quarter 2022 investor letter. Here’s what the firm said:

“We also need to point out one global consequence of the rapid rise in interest rates: an irrepressibly strong dollar. This hurts the reported earnings of U.S. companies who sell their goods and services overseas. Foreign currency earnings translate into fewer dollars and thus lower earnings. Most of the companies in your portfolios gain a notable amount of earnings from their international operations. While the strength or weakness of a currency doesn’t change the quality of a business or its longer-term earnings power, it can change the reported earnings of a company over short periods of time. It is difficult to forecast this effect accurately because many of our companies manufacture where they sell, which to some extent dulls the sharp negative effect of a surging dollar. Abbott (NYSE:ABT), among others, is a good example.”

1. Walmart Inc. (NYSE:WMT)

Industry: Hypermarkets and Super Centers

S&P 500 Outperformance in 2008: 56.3%

Walmart Inc. (NYSE:WMT) is a consumer staples company that operates retail, wholesale, and other units globally. It is based in Bentonville, Arkansas.

Ivan Feinseth at Tigress Financial upgraded Walmart Inc. (NYSE:WMT) shares from Neutral to Buy on January 26, with a $176 price target.

Walmart Inc. (NYSE:WMT) falls under the category of discount stores that sell general merchandise. Consumers will limited purchasing power during a recession thus find value in such companies. The company generated a total return of 7.4% between 2007 and 2009. Its stock also outperformed the S&P 500 by 56.3% and 5.1% in 2008 and 2020, respectively.

See also 10 Best Recession Proof Stocks To Invest In and 10 Best Money Making Stocks To Invest In.