10 Recession-Proof Stocks That Actually Gained During the Last 3 Crashes - UBS 93% Warning
With UBS warning of 93% recession risk, these 10 stocks gained during the last 3 market crashes. Complete analysis of recession-proof sectors and exact tickers.
by Admin
Published Nov 06, 2025 | Updated Nov 06, 2025 | 📖 5 min read
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UBS just raised recession probability to 93% for 2026, and history shows most portfolios lose 30-50% during recessions. But 10 stocks across defensive sectors have consistently gained during the last three major crashes (2008, 2020, 2022).
Here's my analysis of these recession-proof companies, their performance during past downturns, and why they outperform when the economy tanks.
What Makes a Stock "Recession-Proof"?
Recession-proof stocks share four characteristics:
- Essential products/services: People buy them regardless of economic conditions (healthcare, utilities, food)
- Pricing power: Can raise prices without losing customers
- Low debt: Strong balance sheets survive credit crunches
- Dividend history: 10+ years of consistent or growing dividends
Let's examine the 10 stocks that meet all four criteria and outperformed during past recessions.
Stock #1: Johnson & Johnson (JNJ) - Healthcare
Sector: Healthcare (pharmaceuticals, medical devices, consumer health)
Dividend Yield: 3.1%
Dividend Growth Streak: 61 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | JNJ Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis (Oct 2007 - Mar 2009) | -56.8% | -8.4% | +48.4% |
| 2020 COVID Crash (Feb - Mar 2020) | -33.9% | -13.2% | +20.7% |
| 2022 Bear Market (Jan - Oct 2022) | -25.4% | -4.1% | +21.3% |
Why It Works: People need prescription drugs, band-aids, and medical devices regardless of the economy. JNJ owns Tylenol, Johnson's Baby, Neutrogena, and critical pharmaceutical patents.
Stock #2: Procter & Gamble (PG) - Consumer Staples
Sector: Consumer staples (household products, personal care)
Dividend Yield: 2.4%
Dividend Growth Streak: 67 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | PG Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis | -56.8% | -11.7% | +45.1% |
| 2020 COVID Crash | -33.9% | -17.5% | +16.4% |
| 2022 Bear Market | -25.4% | +0.8% | +26.2% |
Why It Works: You don't stop buying toilet paper, toothpaste, or laundry detergent during a recession. PG owns Tide, Crest, Pampers, Gillette, and Bounty—brands with 90%+ household penetration.
Stock #3: Walmart (WMT) - Discount Retail
Sector: Discount retail
Dividend Yield: 1.3%
Dividend Growth Streak: 50 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | WMT Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis | -56.8% | +18.1% | +74.9% |
| 2020 COVID Crash | -33.9% | -3.2% | +30.7% |
| 2022 Bear Market | -25.4% | +3.6% | +29.0% |
Why It Works: During recessions, consumers trade down from Target, Whole Foods, and specialty retailers to Walmart for lower prices. Same-store sales actually increase during downturns.
Stock #4: Coca-Cola (KO) - Beverages
Sector: Beverages
Dividend Yield: 3.0%
Dividend Growth Streak: 61 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | KO Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis | -56.8% | -15.3% | +41.5% |
| 2020 COVID Crash | -33.9% | -24.1% | +9.8% |
| 2022 Bear Market | -25.4% | +5.2% | +30.6% |
Why It Works: Coca-Cola is an affordable luxury—people don't cut $2 sodas from their budgets during recessions. The company operates in 200+ countries with massive pricing power.
Stock #5: NextEra Energy (NEE) - Utilities
Sector: Utilities (electric power, renewable energy)
Dividend Yield: 2.8%
Dividend Growth Streak: 28 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | NEE Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis | -56.8% | -28.5% | +28.3% |
| 2020 COVID Crash | -33.9% | -11.8% | +22.1% |
| 2022 Bear Market | -25.4% | -2.7% | +22.7% |
Why It Works: You can't turn off your electricity during a recession. NextEra has regulated revenue (guaranteed profits approved by state commissions) and is the world's largest renewable energy producer.
Stock #6: Costco (COST) - Warehouse Retail
Sector: Warehouse retail
Dividend Yield: 0.6%
Dividend Growth Streak: 20 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | COST Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis | -56.8% | -28.1% | +28.7% |
| 2020 COVID Crash | -33.9% | -12.4% | +21.5% |
| 2022 Bear Market | -25.4% | -17.8% | +7.6% |
Why It Works: Costco's membership model ($65/year basic, $130/year executive) creates recurring revenue. Members shop more during recessions to save money buying in bulk.
Stock #7: Waste Management (WM) - Waste Services
Sector: Waste management
Dividend Yield: 1.6%
Dividend Growth Streak: 20 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | WM Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis | -56.8% | -32.4% | +24.4% |
| 2020 COVID Crash | -33.9% | -22.7% | +11.2% |
| 2022 Bear Market | -25.4% | -4.9% | +20.5% |
Why It Works: Garbage collection is essential regardless of economic conditions. WM has long-term municipal contracts with guaranteed price escalators (typically 3-5% annual increases).
Stock #8: AbbVie (ABBV) - Pharmaceuticals
Sector: Pharmaceuticals
Dividend Yield: 3.5%
Dividend Growth Streak: 52 consecutive years (including Abbott history)
Performance During Recessions:
| Recession Period | S&P 500 Return | ABBV Return | Outperformance |
|---|---|---|---|
| 2020 COVID Crash | -33.9% | -15.8% | +18.1% |
| 2022 Bear Market | -25.4% | +11.2% | +36.6% |
Why It Works: AbbVie owns Humira (world's top-selling drug), Skyrizi, and Rinvoq. People don't skip critical medications during recessions. The company has a 3.5% dividend yield and strong pipeline.
Stock #9: Verizon (VZ) - Telecommunications
Sector: Telecommunications
Dividend Yield: 6.4%
Dividend Growth Streak: 17 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | VZ Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis | -56.8% | +3.2% | +60.0% |
| 2020 COVID Crash | -33.9% | -21.4% | +12.5% |
| 2022 Bear Market | -25.4% | -8.7% | +16.7% |
Why It Works: Cell phone and internet service are essential utilities in 2025. Verizon has 115+ million subscribers paying $50-$100/month—recurring revenue immune to recession. The 6.4% dividend yield is a bonus.
Stock #10: McDonald's (MCD) - Fast Food
Sector: Fast food
Dividend Yield: 2.2%
Dividend Growth Streak: 47 consecutive years
Performance During Recessions:
| Recession Period | S&P 500 Return | MCD Return | Outperformance |
|---|---|---|---|
| 2008 Financial Crisis | -56.8% | +6.1% | +62.9% |
| 2020 COVID Crash | -33.9% | -25.7% | +8.2% |
| 2022 Bear Market | -25.4% | +7.8% | +33.2% |
Why It Works: During recessions, consumers trade down from casual dining (Chipotle, Panera) to fast food. McDonald's $5 meal deals and value menu attract budget-conscious customers. Franchising model (95% of locations) means low capital requirements and high margins.
How to Build a Recession-Proof Portfolio
I wouldn't put 100% of my portfolio in defensive stocks—they underperform during bull markets. Instead, use this allocation:
| Portfolio Component | Allocation | Purpose |
|---|---|---|
| Recession-Proof Stocks (above 10) | 30-40% | Stability, dividends, downside protection |
| S&P 500 Index Fund (VOO, SPY) | 40-50% | Broad market exposure, lower fees |
| Growth Stocks (Tech, Innovation) | 10-20% | Upside potential during bull markets |
| Bonds (BND, AGG) | 10-20% | Income, capital preservation |
This 30-40% allocation to defensive stocks cuts your portfolio drawdown by 15-25% during recessions while still capturing 80-90% of bull market gains.
Final Thoughts: Don't Panic, Rebalance
With UBS warning of 93% recession risk, now is the time to review your portfolio allocation. If you're 100% in tech stocks or speculative growth, you could lose 50%+ when the recession hits.
These 10 recession-proof stocks have proven downside protection during the last three crashes. Start shifting 10-15% of your portfolio into 2-3 of these stocks now, before the recession arrives. Your future self will thank you when everyone else is panicking.
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FAQs - Recession-Proof Stocks 2025
. What are the best recession-proof stocks to buy in 2025?
The best recession-proof stocks for 2025 are Johnson & Johnson (JNJ), Procter & Gamble (PG), Walmart (WMT), Coca-Cola (KO), NextEra Energy (NEE), Costco (COST), Waste Management (WM), AbbVie (ABBV), Verizon (VZ), and McDonald's (MCD). These companies operate in defensive sectors (healthcare, consumer staples, utilities) with essential products/services, strong pricing power, low debt, and 10+ year dividend growth streaks. They outperformed the S&P 500 by 15-60% during the 2008, 2020, and 2022 market crashes.
. Do recession-proof stocks actually go up during recessions?
Most recession-proof stocks still decline during recessions, but they fall far less than the overall market. For example, during the 2008 financial crisis when the S&P 500 dropped -56.8%, Johnson & Johnson only fell -8.4% and Walmart actually gained +18.1%. The key is relative outperformance—defensive stocks protect capital and recover faster. Some recession-proof stocks like Walmart and McDonald's have posted positive returns during past recessions because consumers trade down to cheaper alternatives, boosting their sales.
. What sectors are recession-proof?
Recession-proof sectors include healthcare (pharmaceuticals, medical devices), consumer staples (food, household products, personal care), utilities (electricity, water, gas), discount retail (Walmart, Costco, Dollar General), telecommunications (cell phone and internet service), waste management, and fast food. These sectors provide essential goods and services people can't eliminate during economic downturns. Avoid cyclical sectors like travel, luxury goods, automotive, real estate, and discretionary retail during recessions.
. How much of my portfolio should be in defensive stocks?
Allocate 30-40% of your portfolio to defensive/recession-proof stocks, 40-50% to broad market index funds (S&P 500), 10-20% to growth stocks, and 10-20% to bonds. This balanced approach provides downside protection during recessions while still capturing 80-90% of bull market gains. If you're within 5 years of retirement, increase defensive stocks to 50-60%. If you're under 35 with decades until retirement, you can reduce defensive stocks to 20-30% and accept higher volatility for long-term growth.
. Should I sell my growth stocks and buy defensive stocks before a recession?
Don't sell all your growth stocks—timing the market is extremely difficult. Instead, gradually rebalance your portfolio over 3-6 months to increase defensive stock allocation from your current level to 30-40%. For example, if you're 90% growth stocks and 10% defensive, shift to 50% growth, 30-40% defensive, and 10-20% bonds/cash. Continue dollar-cost averaging—don't stop buying growth stocks entirely, just reduce new contributions and redirect some to defensive positions. This strategy captures upside if recession predictions are wrong while reducing risk if they're correct.
. What is a dividend aristocrat?
A dividend aristocrat is an S&P 500 company that has increased its dividend for 25+ consecutive years. These companies have proven business models, strong cash flow, and management commitment to shareholders. Examples include Johnson & Johnson (61-year streak), Procter & Gamble (67 years), Coca-Cola (61 years), and Walmart (50 years). Dividend aristocrats typically outperform during recessions because reliable dividend income attracts investors during market volatility. The S&P 500 Dividend Aristocrats Index has historically delivered similar returns to the S&P 500 with 15-20% lower volatility.
. How do I buy recession-proof stocks?
Open a brokerage account with Fidelity, Charles Schwab, Vanguard, or any major broker offering commission-free stock trades. Fund your account via bank transfer, then search for the stock ticker (e.g., JNJ for Johnson & Johnson) and place a market order or limit order. For diversification, consider buying 1 share each of the 10 recession-proof stocks ($1,500-$3,000 total depending on prices), or invest in a defensive stock ETF like Vanguard Consumer Staples ETF (VDC), iShares U.S. Healthcare ETF (IYH), or Utilities Select Sector SPDR (XLU) for instant diversification.
. Are dividend stocks recession-proof?
Not all dividend stocks are recession-proof, but many recession-proof stocks pay dividends. High-yield dividend stocks in cyclical sectors (energy, real estate, financials) often cut dividends during recessions. Focus on dividend aristocrats (25+ years of consecutive dividend increases) in defensive sectors like healthcare, consumer staples, and utilities. These companies have proven they can maintain and grow dividends through multiple recessions. Johnson & Johnson, Procter & Gamble, and Coca-Cola have paid uninterrupted dividends for 60+ years, including through 2008-2009 financial crisis.
. What is the UBS 93% recession warning?
In October 2025, UBS economists raised their recession probability forecast to 93% for 2026, citing inverted yield curves (10-year Treasury yield below 2-year yield), slowing GDP growth, rising unemployment, and corporate earnings declines. This is one of the highest recession probability forecasts from a major bank since 2007. While no recession prediction is guaranteed, UBS has accurately predicted 3 of the last 4 recessions. Investors should prepare portfolios with increased cash reserves, defensive stock allocation, and reduced exposure to high-risk/high-leverage investments.
. Can I lose money in recession-proof stocks?
Yes, recession-proof stocks can still decline during market crashes—they just fall less than the overall market. For example, Procter & Gamble dropped -17.5% during the 2020 COVID crash while the S&P 500 fell -33.9%. The term 'recession-proof' means relative protection, not absolute immunity. However, these stocks recover faster—JNJ and PG both hit new all-time highs within 6 months of the 2020 bottom, while many growth stocks took 12-18 months. The key is lower volatility and faster recovery, not zero risk.
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