Are these the best UK stocks to buy in a recession?

Zaven Boyrazian explores which recession stocks are primed to thrive in 2022, even if an economic catastrophe materialises.

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UK inflation just hit 9%, sending plenty of stocks down the toilet as fears of a recession mount. While recession is an increasing possibility, there’s no guarantee it will actually come to pass. But let’s assume the worst. What stocks should I be looking to buy for my portfolio during a recession? Let’s explore.

UK Recession stocks to buy

Throughout history, there has been a recurring theme of which some industries outperform the market during periods of economic catastrophe. And near the top of this list is consumer staples. That’s not too surprising, given everyone still needs to eat and drink, even if prices are high. And it’s why Britvic (LSE:BVIC) is first on my recession stocks to buy list.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

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The beverage company’s products can be found in almost every supermarket under 37 top-rated brands, including Robinsons, J2O, and Teisseire. It’s also responsible for the distribution of Pepsi products.

When consumers start looking to cut spending, branded products are usually high on the list of sacrifices. Yet looking at Brtivic’s latest results, that doesn’t seem to be happening. Over the last six months, revenue shot up by 18.5% on a constant currency basis. And with pandemic-related costs evaporating, the bottom line has surged by 48.7%. So it’s hardly surprising to hear that management has just announced a £75m share buyback programme.

As inflation climbs higher, Britvic’s immunity to its adverse effects may begin to weaken. In such a scenario, passing on the rise of raw material costs to consumers will be challenging. In other words, profit margins may shrink depending on the severity of the economic downturn many investors are fearing.

But with a track record of maintaining popularity among consumers during market downturns, I am confident Britvic is one of the best recession stocks to add to my portfolio today.

Another leader in consumer staples

Unilever (LSE:ULVR) is another example of a business with a vast product portfolio. Just like Britvic, the firm’s brands, such as Ben & Jerry’s ice creams, Dove shampoo, and Hellmann’s mayonnaise, can be found in almost every British supermarket. And despite raising prices to maintain profit margins, demand for Unilever’s products continues to remain steady.

Looking at the latest trading update, underlying volume growth has slowed by 1%. That does indicate fewer of the firm’s items are making it into the shopping basket. But the total revenue is still up 11.8%, courtesy of the aforementioned price increases.

Subsequently, management has maintained dividends while executing the first €750m chunk of its previously-announced €3bn share buyback programme. To me, that’s a strong sign of confidence coming from the leadership team.

Having said that, the falling product volumes could indicate Unilever is exhausting its pricing power. And management expects margins to suffer slightly in the second half of 2022, due to the volatility of raw material products.

Needless to say, that’s not a great sign. But in the long term, Unilever expects margins to make a full recovery. Therefore, I feel this is another fine addition to my recession stocks to ‘buy now’ list.

Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices

Make no mistake… inflation is coming.

Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing.

Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question.

That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation…

…because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not!

Best of all, we’re giving this report away completely FREE today!

Simply click here, enter your email address, and we’ll send it to you right away.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Britvic and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Should you invest the value of your investment may rise or fall and your Capital is at Risk. Before investing your individual circumstances should be considered, so you should consider taking independent financial advice.

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