Why CVS Health Could Outperform the S&P in a Recession
Fears of a looming recession are frequently on the minds of investors these days as soaring inflation rates continue to cause problems for the economy. And it's hard to call any stock "recession-proof," since one way or another, a decline in employment levels and consumer spending has the potential to disrupt every business in the country.
There are, however, some stocks that can be safer buys than others if a recession hits. One stock that risk-averse investors may want to consider is CVS Health (NYSE: CVS). The top healthcare company has solid fundamentals, a diverse business, and a relatively high-yielding dividend.
A good test of a stock's endurance is to check how it performed during the largest prolonged downturn, the Great Recession, which took place more than a decade ago. Although CVS Health's stock declined during the period of December 2007 through June 2009, it outperformed the S&P 500. During that time frame, CVS' total returns (including dividends) were negative 23%. While that's not great, it's better than the S&P's negative total returns of 34%.
Source Fool.com
