Colgate-Palmolive (CL)

It’s easy to see why Colgate-Palmolive belongs to a recession-resistant portfolio.

The company is deeply entrenched in its operating markets, including oral care, personal care, pet nutrition and home care.

Notably, its leading brand Colgate has by far the largest share in the toothpaste market worldwide. And thanks to brands like Softsoap and Palmolive, the company is also a dominant player in the liquid soap market.

No one is going to stop buying soap or toothpaste in tough times. That simple truth has led to a long and consistent track record of returning cash to investors.

The company has increased its payout for 60 consecutive years.

Business is still growing: In Q1, organic sales at Colgate-Palmolive increased 4% year-over-year.

Paying quarterly dividends of 47 cents per share, CL stock offers an annual yield of 2.5%.

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WM (WM)

Formerly known as Waste Management, WM brands itself the largest comprehensive waste management environmental solutions provider in North America. It says it provides collection, recycling and disposal services to more than 20 million residential, commercial, industrial and municipal customers.

Waste management is not an exciting business, but it is an essential one: Whether the economy is booming or in a recession, people still need someone to come and collect their garbage.

The company was founded in 1968 and is still cleaning up today.

In Q1, WM’s revenue grew 13% year over year to $4.66 billion. Adjusted earnings per share came in at $1.29 for the quarter, up 22% from the year-ago period.

WM currently pays quarterly dividends of 65 cents per share — 13% higher compared to what it was paying a year ago. That makes 2022 the 19th consecutive year that the company has raised its payout.

The stock offers an annual yield of 1.9%.

Johnson & Johnson (JNJ)

With established positions in consumer health, pharmaceuticals and the medical devices markets, health-care giant Johnson & Johnson has delivered regular returns to investors throughout economic cycles.

Many of the company’s consumer health brands — such as Tylenol, Band-Aid and Listerine — are so ubiquitous they’re used as shorthand for their entire product category. In total, JNJ has 29 products each capable of generating over $1 billion in annual sales.

Not only does Johnson & Johnson post recurring annual profits, but it also grows them consistently: Over the past 20 years, Johnson & Johnson’s adjusted earnings have increased at an average annual rate of 8%.

The stock has been trending up for decades. And it is demonstrating its resilience again in 2022: While the broad market has entered bear territory, JNJ is down just 1.2% year to date.

JNJ also announced its 60th consecutive annual dividend increase in April and now yields 2.7%.

Fine art as an investment

Stocks can be volatile, cryptos make big swings to either side, and even gold is not immune to the market’s ups and downs.

That’s why if you are looking for the ultimate hedge, it could be worthwhile to check out a real, but overlooked asset: fine art.

Contemporary artwork has outperformed the S&P 500 by a commanding 174% over the past 25 years, according to the Citi Global Art Market chart.

And it’s becoming a popular way to diversify because it’s a real physical asset with little correlation to the stock market.

On a scale of -1 to +1, with 0 representing no link at all, Citi found the correlation between contemporary art and the S&P 500 was just 0.12 during the past 25 years.

Earlier this year, Bank of America investment chief Michael Harnett singled out artwork as a sharp way to outperform over the next decade — due largely to the asset’s track record as an inflation hedge.

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About the Author

Jing Pan

Jing Pan

Investment Reporter

Jing is an investment reporter for MoneyWise. Prior to joining the team, he was a research analyst and editor at one of the leading financial publishing companies in North America. An avid advocate of investing for passive income, he wrote a monthly dividend stock newsletter for the better half of the past decade. Jing holds a Master’s Degree in Economics and an Honours Bachelor of Science Degree, both from the University of Toronto.

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