If a Stock Market Crash Is Coming, These 5 Stocks Have a History of Holding Up

Is a market crash coming? That's the question investors are asking as the S&P 500 (SNPINDEX: ^GSPC) gets closer to ending its fourth year in a row with double-digit gains.

Understandably, a market crash is a scary thought. However, it's part of investing. When you set up your portfolio, keep that in mind and create your stock mix accordingly. When you do your annual review, swap out different stocks based on where you see gaps. And if you haven't done that yet and anticipate a market crash on the horizon, you should make your move now.

Although a market crash can affect even defensive and value stocks, some manage through better than others, and some actually thrive under adverse circumstances. Costco Wholesale (NASDAQ: COST), TJX Companies (NYSE: TJX), Coca-Cola (NYSE: KO), Procter & Gamble (NYSE: PG), and Walmart (NASDAQ: WMT) all have a history of holding up through market crashes.

What's more, they all pay dividends, and Coca-Cola, Procter & Gamble, and Walmart are Dividend Kings, meaning they've raised their dividends for at least 50 consecutive years. That's reliability under pressure. Here's how they performed in 2008, 2018, and 2022, when the S&P 500 lost value:

^SPX data by YCharts

^SPX data by YCharts

^SPX data by YCharts

1. Costco

Costco's low prices are a draw all the time, but they become even more valuable under pressure, and that's why the market loves it during a downturn. As inflation persists, rising another 3.7% in September, Costco's sales growth has accelerated, reaching 13% year over year in September.

Image source: Getty Images.

That's great news for Costco investors. Costco stock is neck and neck with the market, up 14% year to date, and if there's a correction or crash, it's likely to manage through.

Notice that in the last chart, Costco underperformed the S&P 500. However, it gained 49% the next year, nearly double the index's gain. Often, the resilience is in how quickly the stock bounces back after a downturn.

2. TJX

TJX is an off-price retail chain that buys overstock and off-season merchandise from designer brands. It works with 21,000 vendors and therefore can be very selective about what it buys.

The company sells products at 20% to 60% off retail prices in its 5,200 global stores, and it becomes a magnet for shoppers during periods of inflation or economic distress. Sales increased 4% year over year in the fiscal 2027 second quarter (ended Aug. 1), and earnings per share were up 24%.

TJX barely beat the market in 2008, and that's another example of a lag period -- it gained 81% in 2009, triple the market's rebound.

3. Coca-Cola

Coca-Cola is the world's largest beverage company, and the company has developed brands that people love and are willing to pay for. That gives it sticking power despite whatever's happening in the economy. It generally outperforms when the market's having a tough time, because investors know it has a resilient business, and because of its storied dividend, which it has raised for the past 64 years straight.

Coca-Cola stock has been outperforming this year despite the market's rise for similar reasons, and it's up a fantastic 40%, outperforming many hot tech stocks. Sales increased 7% year over year in the second quarter, and EPS rose 16%.

4. Procter & Gamble

Procter & Gamble makes many of the world's leading household and hygiene brands, such as Tide laundry detergent, Oral-B oral care, and Bounty paper towels. People are willing to pay extra for these products because they feel they're getting good value, and they're essentials people buy no matter what. Procter & Gamble stock soared early in the pandemic, for example, when people were loading up on toilet paper (it makes the Charmin brand).

Procter & Gamble has one of the longest dividend-raise track records, at 70 years, another reason it's valuable in a downturn.

5. Walmart

Finally, Walmart is the largest retailer in the world, with almost 11,000 stores, and it reaches 90% of the U.S. population within 10 miles. Its discount prices are even more attractive when people are penny-pinching.

Image source: Walmart.

Today, it's also reaching more people with its e-commerce channels. E-commerce sales increased 23% year over year in the 2027 fiscal second quarter (ended July 31), driving total sales growth of 5.9%.

Walmart is also a Dividend King, having raised its dividend annually for the past 53 years.

Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Costco Wholesale, TJX Companies, and Walmart. The Motley Fool has a disclosure policy.