3 stocks you can confidently buy after a market downturn

This year has not been good for many blue chip stocks and major stock indexes. With a bear market With stocks falling across the board, many investors may be wondering which stocks will bounce back strongly after a downturn. If you’re one of those investors, look no further than these three companies.

Procter & Gamble

vocation Procter & Gamble (PG -0.61%) a household item would be an understatement. It’s in a league with only a handful of other companies and is one of the flagship defensive stocks. Defensive stocks have great balance sheets, stable earnings, and products that sell regardless of economic conditions. Investors typically look to defensive stocks during market downturns because they offer more stability.

A stock like Procter & Gamble can be great after a market downturn because there’s no knowing whether other economic factors — chief among them inflation that hasn’t been seen in decades — will improve at the same pace as stock prices. In times of high inflationPeople are reducing things like entertainment, shopping, and other services, but they still need to buy household goods.

With a portfolio of brands such as Tide, Crest, Pampers, Gillette, Tampax and Bounty, the company offers everything from a single source. Procter & Gamble is also a Dividend King, having increased its annual dividend for 66 straight years. And with 132 years of paying dividends, investors can rest assured that they will be rewarded despite developments in the broader economy.

Apple

Even after a decline of over 18% year to date (as of November 11) Apple (AAPL 1.30%) is still the most valuable company in the world, with a market capitalization of over $2.36 trillion. With a drop like the one we’ve seen in 2022, Apple is essentially trading at a discount right now and is poised to make a run if the market starts trending higher. In fact, on Nov. 10 alone, Apple saw its shares rise nearly 10%, largely due to good news about a slowdown in inflation.

In a year when the economy had a major impact on consumer spending, Apple was still posting a 7.8% increase in revenue at the time of this writing. With a company of this size, it might be hard for some to imagine a lot of room for growth, but I believe there is. While Apple is known for its hardware products (the iPhone may be its most successful commercial product of all time), I believe its services will allow the company to continue growing.

As Apple expands and invests more in its service offerings, and as the economy eventually improves and inflation eases, its shareholders will inevitably reap the benefits. It’s weathered many severe storms and recessions since going public, and there’s no reason to think that’s about to change.

Honeywell

Honeywell (HON 0.24%) is a multinational industrial giant that has been in existence for over 116 years. In a year when even the strongest companies took a hit, Honeywell is up nearly 3%. Even with a company of this size, it differentiates itself from similarly sized competitors by having a hand in the game growth company.

Once most companies reach a certain size, they can easily grow at the same pace as US GDP — which, all things considered, isn’t much. However, Honeywell has done a great job investing in new technology geared for high growth. These include quantum computing (Quantinuum), sustainable technology (green initiatives, advanced recycling) and air mobility (drone technology) to name just a few.

Honeywell’s sustainable technology solutions business generated revenue of around $200 million in 2021, and the company expects that to grow to $700 million by 2024, at a compound annual growth rate of more than 50% . As the world becomes more focused on environmental protection, Honeywell’s investments and position in this space may pay off for investors as the days brighten in the stock markets.

Stephen Walters has positions at Apple. The Motley Fool has positions in and recommends Apple. The Motley Fool recommends the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool has one confidentiality policy.

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