3 Resilient Growth Stocks to Hold in the 2023 Economy

Recession-resilient stocks tend to recover faster than others after the economy stabilizes and sometimes even before the broad market starts recovering.

| More on:
protect, safe, trust

Image source: Getty Images

Even though the past performance of any given stock is no guarantee that the stock will perform in the future, you can derive a lot of insights from the way a stock has performed at a specific time (or during a specific economic crisis). But there are conditions. For example, if you go too far back in time, the comparison might not be so accurate.

So, if you are looking for stocks that may perform well or at least recover fast if there is a recession in 2023, it would be a good idea to choose the stocks that performed well in the last five years and showed resilience during the pandemic.

There are three such stocks that you may consider holding for the upcoming recession (if it’s coming).

A utility stock

Utility stocks are inherently more resilient to economic crises compared to businesses that rely upon discretionary spending. This makes Hydro One (TSX:H) a solid choice by itself, but it becomes an even more compelling option when you consider its performance in the last five years. The stock has risen roughly 63%, which is more than enough to double your capital in a decade.

More importantly, the stock barely budged during the pandemic. It kept going up almost consistently, and even though it saw a few dips along the way, the stock was quick to recover. The dividends add to the stock’s allure and are currently available at a 3% yield. It’s also one of the large-cap stocks if that’s a factor you take into account when choosing stable and resilient growth stocks.

A food and pharmacy stock

If you are looking for consistent growth and stability during a market crash, Metro (TSX:MRU) is another excellent option to consider.

It didn’t fall too hard during the pandemic and was relatively quick to recover and has returned 89% to its investors in the last five years through price appreciation alone. And even though its yield is not that great at 1.4%, the fact that it’s an established Dividend Aristocrat enhances its appeal.

If the stock keeps growing at the current pace, it may double your capital every six years. Its resilience and strong performance in weak markets come from its business — food and medicine. It has an impressive network of groceries and pharmacies, primarily in Ontario and Quebec, and just like utility bills, these two are the necessities people never stop spending money on, regardless of the economic condition.

A tech stock

Tech stocks took a beating after the brief post-pandemic boom, and Descartes Systems Group (TSX:DSG) is one of the few stocks that remained relatively safe. Even though it’s down from its November peak, the 17.3% decline is nothing compared to the 45% slump of the capped IT index.

The five-year performance has been quite impressive as well. The stock has risen over 160% in the last half-decade, and even if underdelivers by a significant margin, it may still be able to double your capital twice in a decade.

Like most companies, Descartes doesn’t offer dividends. But the robust growth potential easily makes up for this, especially if you consider its resilience, not just compared to the market but the sector as well.

Foolish takeaway

The three stocks have proven their mettle in the last market crash. Metro and Hydro One also represent green businesses capable of surviving harsh markets thanks to their business model. As for Descartes Systems, it has been a robust growth stock since 2009 and may prove to be a good asset in your portfolio, assuming you hold it long enough.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends Descartes Systems Group. The Motley Fool has a disclosure policy.

More on Investing

Doctor talking to a patient in the corridor of a hospital.
Investing

TFSA: Healthcare Dividend Stocks Are Perfect for Passive Income

Top healthcare dividend stocks like Extendicare Inc. (TSX:EXE) and others can provide huge passive income in your TFSA.

Read more »

TFSA and coins
Tech Stocks

TFSA: Invest in These 2 Stocks for a Legit Chance at $1 Million

Are you interested in building a $1 million portfolio? Invest $20,000 in these two stocks!

Read more »

edit Person using calculator next to charts and graphs
Investing

The Top TSX Stock on My Watch List Right Now

Here's why Alimentation Couche-Tard (TSX:ATD) remains a top TSX stock that long-term investors seeking growth and yield will want to…

Read more »

Hourglass projecting a dollar sign as shadow
Investing

3 Stocks to Add to Your TFSA ASAP

Given their stable cash flows and solid underlying businesses, these three stocks are excellent additions to your TFSA in this…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

Better Buy: Fortis Stock vs Enbridge

Fortis stock and Enbridge are top dividend stocks on the TSX today. Which stock is better buy for safe dividend…

Read more »

Canadian Dollars
Dividend Stocks

How to Make $1,500 in Passive Income 4 Times a Year

Blue-chip TSX stocks such as Enbridge can enable investors to create game-changing wealth over the long term.

Read more »

Woman has an idea
Investing

5 Stocks You Can Confidently Invest $500 in Right Now

Consider putting your surplus cash in these stocks for stellar capital gains.

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

TFSA: How to Easily Turn $10,000 Into $500/Year of Passive Income

You don't need to be a stock market expert to turn $10,000 into a $500 of tax-free passive income. Here's…

Read more »