3 stocks you can buy with confidence after a market downturn | The Motley Fool

This year has not been kind to many blue chip stocks and major stock indices. With a bear market that has seen stocks fall across the board, many investors may be wondering which stocks are likely to rebound from a downturn. If you are one of those investors, look no further than these three companies.

Procter & Gamble

Call Procter & Gamble (PG -0.61%) a staple would be an understatement. It’s in a league with only a handful of other companies and one of the poster children for defensive stocks. Defensive stocks have good balance sheets, stable earnings, and products that sell regardless of economic conditions. Investors generally rely more on defensive stocks during market declines because they provide more stability.

A stock like Procter & Gamble may be attractive after a market downturn because there is no way of knowing whether other economic factors – primarily inflation at levels not seen in decades – will improve at the same pace as stock prices. During times of high inflation, people cut back on expenses like entertainment, shopping, and other services, but they still have to buy household goods.

With a portfolio of brands including Tide, Crest, Pampers, Gillette, Tampax, and Bounty, the company is a one-stop-shop. Procter & Gamble is also a dividend king, having raised its annual dividend for 66 consecutive years. And with its 132 years of total dividend payouts, investors can be sure they’ll be rewarded despite what’s going on in the broader economy.

Apple

Even after a decline of more than 18% since the start of the year (as of November 11), Apple (AAPL 1.30%) is still the most valuable company in the world, with a market cap of over $2.36 trillion. With a drop like the one we witnessed in 2022, Apple is essentially trading at a discount right now and is poised for a run when the market starts to rise. In fact, Apple saw its stock rise nearly 10% on November 10 alone, largely on good news about slowing inflation.

In a year where the economy took a heavy toll on consumer spending, Apple still saw revenue rise 7.8% at the time of this writing. With a company of this size, some may find it hard to imagine much room for growth, but I believe there is. Although Apple is known for its hardware products (the iPhone is perhaps the most successful commercial product of all time), I believe that its services will allow it to continue to grow.

As Apple grows and invests more in its service offerings, and as the economy eventually improves and inflation slows, its shareholders are sure to reap the benefits. Since going public, it has weathered many storms and recessions, and there’s no reason to believe that will change.

Honeywell

Honeywell (HON 0.24%) is a multinational industrial giant that has been in existence for over 116 years. In a year where even the strongest companies were beaten, Honeywell rose just under 3%. Even with a company of its size, one thing that sets it apart from competitors of similar size is that it has its share in growing businesses.

Once most companies reach a certain size, they’re comfortable growing at roughly the same rate as US GDP — which isn’t much, after all. However, Honeywell has done a great job investing in new technologies poised for strong growth. This includes quantum computing (Quantinuum), sustainable technologies (green initiatives, advanced recycling) and air mobility (drone technology), to name a few examples.

Honeywell’s Sustainable Technology Solutions business achieved approximately $200 million in revenue in 2021, and the company expects that figure to grow to $700 million by 2024, a compound annual growth rate of more than 50%. As the world shifts its focus more towards environmentalism, Honeywell’s investments and position in space can pay off big for investors when days improve in the stock market.