Best Depression Stocks

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Contributor, Benzinga
February 26, 2024

VAALCO Energy (NYSE:EGY)

Founded in 1985, VAALCO Energy Inc. is an independent energy company. Based in Houston, Texas, the company is engaged in the acquisition, development and production of crude oil. Its strategy is to increase reserves and production through development of international oil and natural gas properties.

EGY has a market cap of $389.6 million and a 52-week range of 2.06 – 8.77. The stock trades an average of 285.4K shares daily and its quarterly revenue sits at $68.7M. 

$4.23
0[0.00%]
Last update: 7:00PM (Delayed 15-Minutes)
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Open4.190Close4.230
Vol / Avg.382.610K / 706.736KMkt Cap444.822M
Day Range4.165 - 4.25052 Wk Range3.510 - 5.220

Synopsys (NASDAQ:SNPS)

Synopsys is a provider of electronic design automation (EDA) software, intellectual property (IP), and software integrity (SI) products. EDA software automates the chip design process, enhancing design accuracy, productivity, and complexity in a full-flow end-to-end solution. The firm’s growing SI business allows customers to continuously manage and test the code base for security and quality. Synopsys’ comprehensive portfolio is benefiting from a mutual convergence of semiconductor companies moving up-stack toward systems-like companies, and systems companies moving down-stack toward in-house chip design. The resulting expansion in EDA customers alongside secular digitalization of various end markets benefits EDA vendors like Synopsys.

$575.70
0.05[0.01%]
Last update: 4:23PM (Delayed 15-Minutes)
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Open579.680Close575.700
Vol / Avg.1.034M / 1.350MMkt Cap87.819B
Day Range571.010 - 581.49052 Wk Range350.580 - 629.380

Netflix (NASDAQ:NFLX)

Netflix’s primary business is a streaming video on demand service now available in almost every country worldwide except China. Netflix delivers original and third-party digital video content to PCs, Internet-connected TVs, and consumer electronic devices, including tablets, video game consoles, Apple TV, Roku, and Chromecast. In 2011, Netflix introduced DVD-only plans and separated the combined streaming and DVD plans, making it necessary for subscribers who want both to have separate plans.

$587.64
4.08[0.70%]
Last update: 5:51PM (Delayed 15-Minutes)
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Open583.560Close587.650
Vol / Avg.2.394M / 4.807MMkt Cap254.307B
Day Range583.270 - 590.75052 Wk Range285.330 - 597.000

Campbell Soup (NYSE:CPB)

With a history that dates back around 150 years, Campbell Soup is now a leading manufacturer and marketer of branded convenience food products, most notably soup. The firm’s product assortment includes well-known brands like Campbell’s, Pace, Prego, Swanson, V8, and Pepperidge Farm. Following the sale of its international snacking operations, the firm derives nearly all of its sales from its home turf. Campbell has made a handful of acquisitions to reshape its product mix the past few years, including the tie-up with Snyder’s-Lance (completed in March 2018), which stands to enhance its exposure to the faster-growing on-trend snack food aisle, complementing its Pepperidge Farm lineup.

$42.00
-0.45[-1.06%]
Last update: 4:14PM (Delayed 15-Minutes)
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Open42.370Close42.180
Vol / Avg.3.038M / 2.948MMkt Cap12.520B
Day Range42.055 - 42.59052 Wk Range37.940 - 56.040

IBM (NYSE:IBM)

IBM looks to be a part of every aspect of an enterprise’s IT needs. The company primarily sells software, IT services, consulting, and hardware. IBM operates in 175 countries and employs approximately 350,000 people. The company has a robust roster of 80,000 business partners to service 5,200 clients–which includes 95% of all Fortune 500. While IBM is a B2B company, IBM’s outward impact is substantial. For example, IBM manages 90% of all credit card transactions globally and is responsible for 50% of all wireless connections in the world.

$184.00
-1.72[-0.93%]
Last update: 7:59PM (Delayed 15-Minutes)
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Open185.600Close184.130
Vol / Avg.4.621M / 4.926MMkt Cap168.014B
Day Range184.060 - 186.12552 Wk Range120.550 - 196.900

Investing during a period of economic depression or recession can be daunting. However, choosing the right depression stocks can help you weather a period of uncertainty and protect your financial interests. Today, we’ll be taking a look at a few stocks you may want to consider investing in if you believe that the market will take another downturn. 

Quick Look at the Best Depression Stocks:

Overview: Depression Stocks

A depression is a period of extreme economic downturn that often lasts for several years. During a depression, prices and world trade fall, unemployment rates rise and the economy sees a consistent negative gross domestic product (GDP) growth. Many economists define depression as a drop in real GDP that exceeds 10%. A depression is a more severe form of a “recession,” which is usually defined as 2 consecutive quarters of decline in quarterly real GDP. A recession may lead to a depression if the recession goes on for at least 2 years.

Though the U.S. has experienced several recessions, there has only been 1 major depression. Often referred to as “the Great Depression,” the stock market crash of October 29, 1929, caused the GDP of both the United States and foreign countries to decline sharply. GDP fell by an estimated 15%, crop prices plummeted over 60% and unemployment rates rose to 25.6% during the peak. 

While the depression caused many companies to go out of business as layoffs were made and consumers tightened their belts, some stocks survived — and a few even increased in value. Many of the stocks that rose during the Great Depression were defense stocks like Electric Boat, now a defense subsidiary of General Dynamics (NASDAQ: GD). This was because the U.S. was gearing up to enter World War II and drastically increased its defense budget. 

We can learn from the innovation and commitment to versatility that these companies showed to predict which stocks will best survive through future economic downturns. 

Best Online Brokers for Depression Stocks

No matter if you’re searching for long-standing stocks to protect your investment during the next depression or you’re only interested in stocks under $5 to day trade, the most important tool at your disposal is a reputable brokerage account. If you aren’t sure where to open an account, consider a few of our top choices below. 

Features to Look for in Depression Stocks

Not every stock is equally as equipped to handle a depression or recession. By examining the aftermath of the stock market crash of 1929, we can identify a few key characteristics of companies that survive periods of economic uncertainty. If you’re looking for investments for the next depression, you might want to consider stocks that exhibit these fundamental qualities.

  • A long history that spans multiple markets: You won’t find many stocks under $20 on our list of the best stocks to survive a recession. Companies with long histories that have withstood both bull and bear markets are more adequately equipped to handle a new period of depression when compared with new companies and those with a negative earnings per share value.    
  • Innovation and quality: During the depression that began in 1929, companies like Electric Boat and Bulova Watch were able to stay afloat in part due to their reputation for creating quality products and devoting a large percentage of their budgets to cutting-edge innovations. Search for companies with large research and development budgets and that make efforts to keep up with the changing tastes of the modern consumer. These companies are more likely to have the tenacity needed to make it through a depression.
  • Wholesale and discount retailers: Another sector that tends to do well during recessions and depressions is the discount and wholesale industry. During an economic downturn, unemployment rates and consumer confidence both have a tendency to plummet. This means that discount retailers are at a unique advantage as families cut back and save as much money as possible. 

Preparing for Economic Uncertainty 

Though many companies lose value during economic depressions, downturn can also present a great opportunity to pick up stocks below their fair value. Some of the world’s most successful investors (including Warren Buffet and John Templeton) used periods of economic downturn to enhance their portfolios and bring their investments to new heights. The key to successfully investing through a depression is to choose stocks with rock-solid company fundamentals. From providing a unique value to customers to continuous innovation, the companies that survive depressions know how to adapt to a changing market. 

Frequently Asked Questions

Q

Why do people buy stocks in a recession?

A

Stock prices in a recession often fall, which can create a good buying opportunity for long term investors.

Q

What are depression stocks?

A

Depression stocks are shares in companies that do well during bad economic times.

Q

What are the best depression stocks?

A

Benzinga offers a list of the best deprssion stocks above.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.