Another down week for the U.S. stock market has fueled fears that the country is on the precipice of its first economic recession since dark days of the Financial Crisis. While many shareholders are asking themselves just how bad the economic downturn could get, investors in Ross Stores, Inc. (ROST), Dollar Tree, Inc. (DLTR) and H & R Block Inc (HRB) are asking a completely different question: Who cares?
Certain groups of investments, such as consumer staples stocks, healthcare stocks and apartment REITS, are typically considered defensive plays in times of economic weakness. However, despite relative outperformance, the iShares FTSE NAREIT Resi Index Fund (REZ), the Health Care SPDR (XLV) and the Consumer Staples SPDR (XLP) all generated negative returns in 2008 when the S&P 500 declined 37% on the year.
If you’re looking to do a bit better than limiting your losses during the next recession, here’s a closer look at three stocks — ROST, DLTR, and HRB — that are well-positioned to thrive during a hypothetical 2016 recession.
Sure, if we don’t learn from history we can be doomed to repeat it. And if we do learn from history, we can actively seek to repeat it: Each of these stocks soared during the last market collapse.
H & R Block (HRB)
There’s an old saying about death and taxes, and the IRS doesn’t have much sympathy for taxpayers during a recession. In 2008, H&R Block gained 22.0% during the market collapse, and the stock is basically trading sideways so far in 2016, while the S&P is down a whopping 11%. HRB stock pays a 2.4% dividend and currently sports a reasonable 14.5 forward P/E ratio.
Rivals Intuit Inc. (INTU) and Liberty Tax Inc (TAX) are also dividend-paying stock options for a recession, but HRB is the only one of the three without long-term debt on its books.
Dollar Tree (DLTR)
It should come as no surprise that discount retailer Dollar Tree thrives…
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