In this article, we will take a look at the 10 Best Stocks to Invest in During a Recession.
Geopolitical tensions are once again having a severe impact on the economic conditions and on investors’ decisions in the market as well. CNBC reported on February 28, 2026, that a joint U.S. and Israeli attack on Iran is raising significant concerns about global energy security and economic stability.
According to Bob McNally, a former White House energy advisor, a prolonged closure of the Strait of Hormuz is guaranteed to cause a global recession. Based on data from the energy consulting firm Kpler, over 60% of the world’s seaborne crude exports flowed through the Strait in 2025. At this point, Tehran’s possession of large stockpiles of mines and missiles has the potential to make the commercial route unsafe. With these threats, McNally warns that oil prices could spike above $100 per barrel, triggering a bidding war and an economic downturn.
While this looming shadow of a downturn is generally viewed as a danger to capital, some seasoned investors have historically perceived these periods as windows of opportunity. Howard Marks, Co-Chairman of Oaktree Capital Management, has made the following observation in his book Mastering the Market Cycle.
The safest (and most rewarding) time to buy usually comes when everyone is convinced there’s no hope.
Given this backdrop, we will examine the 10 best stocks that could strengthen the portfolio during a recession.
Our Methodology
To identify the 10 best stocks to invest in during a recession, we analyzed the S&P 500 index. We prioritized stocks from the defensive sector with the lowest historic drawdowns over the past decade, spanning from January 2016 to January 2026. By considering defensive stocks and potential drawdowns from the last decade, we ensured our list included stocks that showed relative price stability despite market stresses such as COVID. We then ranked the stocks by the number of hedge funds holding a stake in each. We limited our final selection to companies that have recently reported noteworthy developments likely to impact investor sentiment. All the pricing data are current as of market close on March 5, 2026.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
10. Alliant Energy Corporation (NASDAQ:LNT)
Number of Hedge Fund Holders: 42
Alliant Energy Corporation (NASDAQ:LNT) is one of the 10 best stocks to invest in during a recession.
On February 23, 2026, BMO Capital raised its price target on Alliant Energy Corporation (NASDAQ:LNT) from $72 to $78 while maintaining an Outperform rating. The update comes after the company posted its Q4 results. The firm noted that the company has signed a new agreement, moving the QTS Madison project to Iowa without changing its consolidated capital plan. For the rating, the firm cited the regulatory calendar’s timing and the potential for upward revisions to earnings per share.
Separately, on February 22, 2026, Wells Fargo raised the price target on Alliant Energy Corporation (NASDAQ:LNT) from $71 to $75 and maintained an Overweight rating on its stock. According to the firm, the company’s updates have been solid. It finds the company’s data center growth attractive and further cites the lack of major rate cases during an election period.
CNN recorded a Buy rating on Alliant Energy Corporation (NASDAQ:LNT) from 7 of 14 analysts covering the stock. The 1-year average price target currently indicates a 3.73% upside potential as of March 5, 2026.
Founded in 1917, Alliant Energy Corporation (NASDAQ:LNT) is a public utility holding company serving the American Midwest. The company operates from its headquarters in Wisconsin.
