Bear market kings: These stocks hold up the best when a market downturn hits

Published Tue, May 10 20222:12 PM EDT

With the S & P 500 eyeing a bear market, certain stocks that fared well in previous market downturns could be poised to outperform again. The benchmark stock index is about 16% below its record, close to the bear market territory of a 20% or more drawdown from highs. U.S. stocks have been under pressure this year amid persistent inflation, the Federal Reserve's rate-hiking cycle , recession risks, the war in Ukraine and global Covid outbreaks. There have been 14 bear markets since World War II, according to Bespoke Investment Group. At the median, the S & P 500 has pulled back about 30% and the downturn has lasted 359 days, Bespoke found. To find the companies that have held up in previous periods of market turmoil, CNBC Pro looked at the last three bear markets: 2020, 2009 and 2007-2008. We screened for stocks that did not lose more than 20% during any of the last three bear markets and so far this year. We then ranked the remaining stocks by the best median returns of the four periods. Take a look at our list of bear market winners. (Source: FactSet. As of market close May 9, 2022.) Most names on the list are consumer staples with resilient businesses that hold up during economic downturns. Walmart had a positive median return, rising 1.5% typically in the past four downturn periods. The stock has returned 5.3% this year, as of Monday's close. The retail giant is well liked on Wall Street now, with 57.1% of analysts calling it a buy. Dollar Tree is another discount retailer that a majority of analysts like. The stock has a buy rating from 52% of Wall Street analysts covering it. Shares had a median decline of 8.1% during market pullback periods. Dollar Tree is on a tear in 2022, up nearly 15% based on its closing price Monday. Campbell Soup is the best year-to-date performer on the list, up roughly 20% through Monday's close. The stock has a median move of a 4.7% decline in the four downturn periods. To be sure, nearly every analyst covering the stock has given it a hold rating, according to FactSet. Other names on the list include General Mills , Clorox and Gilead Science .

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With the S&P 500 eyeing a bear market, certain stocks that fared well in previous market downturns could be poised to outperform again.