Safe Bets In A Downturn: 3 Recession-Proof Stocks For 2025

In early April, analysts at JP Morgan Research put the probability of a global recession in 2025 at 60%. Their view was that tariffs are likely to negatively impact business sentiment and create a substantial drag on economic growth. Looking for recession-proof stocks to buy for portfolio protection? Here are three names to consider.

1) Affordable Products – Coca-Cola

One stock that has historically demonstrated resilience during recessions is Coca-Cola (KO:NYSE). A global beverage company, it owns many well-known brands including the likes of Coke, Fanta, Powerade, and Smartwater.

While consumers tend to cut back on large purchases during recessions, they often continue to spend on affordable products. This is especially true of familiar products like Coke (no one wants to switch to supermarket brand cola), so Coca-Cola’s revenues are unlikely to suddenly fall off a cliff if economic conditions deteriorate.

Coke also operates in more than 200 countries and sells its products via a range of different channels (supermarkets, restaurants, bars, vending machines, etc.). This extensive reach means that it is well insulated from economic weakness in one specific geographic location or demographic.

It’s worth pointing out that Coke isn’t a cheap stock. Currently, the P/E ratio here is about 24 (the stock is in high demand given the elevated level of economic uncertainty).

This earnings multiple could be warranted given its recession-proof attributes, however. The fact that the company pays a solid dividend (the yield is about 2.8%) and has increased its annual payout for over 60 years adds weight to the investment case.

2) Cheap Entertainment – Netflix

If we see a recession, consumers will most likely cut back on a lot of entertainment services. But one service that is probably not at risk of being cut is Netflix (NFLX:NASDAQ).

Think about it. The cost of a standard monthly Netflix subscription is only $17.99 – that’s far less than the cost of a night out with friends at a bar, a dinner out at a restaurant, a ticket to a live sporting event, or a music concert.

It gets better though. If consumers decide to ‘trade down’ to Netflix’s cheaper ad-based service to save money, Netflix will actually benefit as it makes more money from this service than it does from its regular service.

Now, this stock has had a strong run recently as investors have become aware of its defensive attributes. As a result, it’s quite expensive today (the P/E ratio is about 43).

I don’t see this valuation as a deal breaker. But it does add risk to the investment case.

3) An Essential Service – Fortinet

While business spending on technology is likely to fall if we see a recession, one area of tech that will most likely not see a decrease in investment is cybersecurity. This brings me to Fortinet (FTNT:NASDAQ).

As one of the world’s leading cybersecurity companies, it should be relatively insulated from an economic downturn. In today’s digital world, it offers services that are absolutely essential for corporations.

One thing I like about this cybersecurity company is that it has been profitable for many years now (unlike a lot of other players in this industry). It also generates a very high return on capital (34% last year).

So, it’s a little higher up on the ‘quality’ spectrum than many other other cybersecurity companies. In a recession, quality is important – investing in low-quality/unprofitable businesses during periods of economic weakness can be risky.

Of course, cybersecurity is a dynamic industry. And while the industry is expected to get much bigger over the next decade, there are no guarantees that Fortinet will continue to have success.

This company has an impressive growth track record, however (revenues have nearly tripled over the last five years). So, I think it’s worth a look.

Edward Sheldon owns shares in Coca-Cola.