The Motley Fool

Never mind the Cash ISA. I think these stock market stalwarts will help you beat a recession

Image source: Getty Images.

Having some cash in the bank is never a bad idea and with more than a few analysts predicting that the UK could slip into recession following Brexit, it’s particularly prudent at the current time.  

Many of us will be using a Cash ISA for this purpose. The fact that these accounts pay interest way below inflation, however, means it’s vital not to leave any surplus funds in there — that is, anything beyond roughly six months of living expenses.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

As such, here are three resilient companies I’d consider buying for my portfolio with what’s left over. 


People will always need medicine, regardless of what the economy is doing. As such, my first port of call is the pharmaceutical industry and, more specifically, GlaxoSmithKline (LSE: GSK)

Despite the fact that it’s not been increased since 2014, one of the biggest attractions to Glaxo, aside from its defensive qualities, is its dividend. The 80p per share total payout for the current financial year means a yield of almost 4.8%. Perhaps most importantly, the extent to which this cash return is covered by profits is starting to look more stable after a rocky few years. 

Unsurprisingly given the Brexit stand-off, Glaxo’s shares have been steadily growing in popularity, rising 11% since the beginning of 2019. Assuming analysts are correct in their predictions, the shares currently change hands for just over 14 times earnings — far below FTSE 100 peer Astrazeneca’s frothy-looking P/E of 24. 

Another stock that should hold its own in the aftermath of Brexit, if it happens at all, is waste management and recycling firm Biffa (LSE: BIFF).

Last week’s trading update was as no-nonsense as you can get with the company stating that trading over H1 had been in line with management expectations with no change to the outlook for the full year. 

Of course, a business like this will never generate the same level of excitement as your average tech company. On a little less than 10 times earnings, however, I’m tempted to say that Biffa looks cheap.

At its current price, the forecast dividend yield sits close to 3.6% and is easily covered by earnings. There’s quite a bit of debt on the balance sheet (something I usually steer clear of), but the predictability of its line of work arguably makes this less of a red flag.

My last pick is a retailer. That might sound strange considering that consumer confidence is usually battered during economic wobbles, but stick with me.

Here I’m talking about discount retailers — the sort that offer people the most bang for their buck. FTSE 250 member B&M European Value (LSE: BME) is the standout candidate here, especially when recent trading is considered.

In late July, the company stated that it had made a “solid start” to FY20 with group revenue climbing 21.4% over Q1 (31 March-29 June). In sharp contrast to high street peers, 12 new stores were opened over the period with lots more planned over the entire year.

This optimistic outlook goes some way to explaining why B&M’s shares trade on almost 18 times forecast earnings. The 2.4% yield is also the lowest of the three in focus today (although it’s been hiked by double-digits in three of the last four years). With signs that consumers are continuing to tighten the purse strings, however, I think this is still a reasonable price to pay. 

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

Paul Summers has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. The Motley Fool UK owns shares of B&M European Value. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.