3 Stocks to Buy if You Think the Economy Is Heading for a Recession

Although broader equities have performed pretty well this year, recession fears are lingering. After all, we are still dealing with macroeconomic problems and rising inflation. For those especially worried that the economy will eventually succumb to these headwinds and enter a recession, it helps to buy shares of companies that can perform well even in the most challenging environments. Here are three of them: Abbott Laboratories (NYSE: ABT), Coca-Cola (NYSE: KO), and Walmart (NASDAQ: WMT). Read on to find out why these three stocks are excellent buys if there is a recession on the way.

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1. Abbott Laboratories

There are several reasons Abbott Laboratories is an excellent stock to buy ahead of a recession. First, it has a large portfolio of healthcare products across four categories: Pharmaceuticals, medical devices, nutrition, and diagnostics. Many of the products it offers remain in high demand regardless of economic conditions. For instance, in nutrition, it is a market leader in baby formula, something parents aren't going to want to stop buying, no matter what happens. Within its core medical device business, Abbott Laboratories markets a range of products that help treat serious, sometimes life-threatening conditions.

Those, too, should experience resilient demand even during recessions. Second, Abbott Laboratories has several growth drivers that could help it deliver solid financial results for a long time. The company's FreeStyle Libre franchise -- a family of continuous glucose monitoring devices for diabetes patients -- has been its main growth driver for a while and still boasts plenty of white space.

Abbott Laboratories also now has a stronger presence in the cancer screening market, another promising niche, thanks to a recent acquisition. Third, Abbott Laboratories is a fantastic dividend stock. With 54 straight years of payout increases, the healthcare giant is a Dividend King, or a corporation with at least 50 consecutive years of dividend raises. Regular payouts can help buffer market losses if a recession drags broader equities down. Abbott Laboratories hasn't performed well this year, partly due to slowing top-line growth, especially within its diagnostic and nutrition businesses.

However, recent developments (including an acquisition that boosted its diagnostics segment) can help it address these problems. The stock should remain a reliable dividend payer through the next recession and beyond.

2. Coca-Cola

Coca-Cola is a consumer staples giant with a large portfolio of beverages across practically every category known to man, including water, alcohol, sports drinks, coffee, tea, and more. The company boasts a strong brand name that allows it to command shelf space in grocery stores while nearly effortlessly attracting customers. The consumer staples industry is a highly defensive one. So, even in a recession, Coca-Cola's business should perform relatively well, as the company has demonstrated many times before.

Coca-Cola is also an innovative beverage maker that routinely launches new products (or twists on existing ones) that help it stay ahead of changing consumer demands. That can, for instance, mean introducing cheaper versions of some of its well-known brands to attract price-sensitive customers during tough economic times. All these factors -- and more -- make Coca-Cola a recession-resistant stock. And to top it all off, the company is also a Dividend King with 64 consecutive years of payout increases.

3. Walmart

Walmart, a leading U.S. retailer, is known for its Every Day Low Price (EDLP) strategy. Thanks to the company's large scale and extensive customer base, it can negotiate favorable deals with suppliers and pass those cost savings onto its customers, whether they shop directly in its stores or through online channels. Walmart is a leading e-commerce retailer, and its online retail business has been growing much faster in recent years.

We can also mention Walmart's vast footprint in the U.S.: 90% of the country's population lives within 10 miles of one of its stores. In other words, Walmart is conveniently located and offers attractive prices, making it a great place to shop, especially during a recession. That's why the company can perform relatively well even amid economic problems. Lastly, Walmart is a Dividend King, too, with 53 consecutive years of payout increases. The retail giant might suffer a bit if we head into a recession, but it should emerge in one piece and continue performing well long after.

Prosper Junior Bakiny has positions in Walmart. The Motley Fool has positions in and recommends Abbott Laboratories and Walmart. The Motley Fool has a disclosure policy.