The 3 best stocks to buy to survive another S&P 500 crash

Everything seemed to be canceled last week. As recession fears gripped the market, S&P 500 fell 3% in one day. The Nasdaq 100 lost more than 1,000 points at one point, its biggest loss ever, before regaining some of its lost ground.

Although the situation improved significantly by Tuesday and continued to improve as the week progressed, the whipsaw event still attracts cautious investors. Wild swing trades can often signal a new, more severe crash. That’s why it’s important to prepare for the worst and hope for the best.

Finding the best stocks to buy to protect your portfolio from another crash by the benchmark is essential to peace of mind during the downtrend. Buying solid companies with good long-term growth prospects ensures that you will emerge from any correction relatively unscathed.

The three stocks below are some of the best stocks to buy for long-term wealth creation.

Best stock to buy no. 1: AbbVie (ABBV)

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The pharmaceutical giant AbbVie (NYSE:ABBV) is best known for the rheumatoid arthritis drug Humira, but after the patent expired, the therapy lost sales. Although Humira’s second-quarter sales were $2.8 billion, that’s down 30% year-over-year. Fortunately, the pharma stock has a portfolio of powerful drugs to take its place. Skyrizi sales rose 44% year-over-year to $2.7 billion, and Rinvoq grew 55% to $1.4 billion. AbbVie also has powerful drugs marketed and in development that may replace Humira.

However, ABBV shares are still attractively valued. The stock trades at just 10 times next year’s earnings estimates and 18 times free cash flow (FCF) produces. The pharma stock also pays a dividend that yields 3.2% annually and has increased its payout every year since it was spun off from Abbott Laboratories (NYSE:ABT) in 2013.

Because of Humira’s declining contribution, analysts expect sales to fall 6% this year to $50 billion before rebounding in 2025 to nearly $54 billion.

Income from real estate (O)

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Real Estate Investment Trust (REIT) Real estate income (NYSE:A) is the second stock to buy to protect your portfolio from the next S&P 500 crash. It has over 15,450 properties with over 272 million square feet of commercial space. Its tenants are all top retail stocks, including Walmart (NYSE:WMT), Costco (NASDAQ:COST) and general dollar (NYSE:DG).

As it operates on a triple net lease, its tenants are responsible for paying taxes, insurance and maintenance costs. This results in significant cost savings for O stock. The REIT pays a monthly dividend that has a yield of 5.2% annually and has made the payment for 649 consecutive months. It has also increased its dividend 126 times since listing NYSE in 1994.

The promise of a rate cut lifts Realty Income shares. It is up 27% from its lows and is 5% higher year to date. Wall Street expects earnings to rise 8% this year, followed by a 21% rise next year, to $1.65 a share.

Visa (V)

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Premier Payment Processor Visa (NYSE:V) is the third stock to buy on a crash. With more than 4.3 billion Visa cards in circulation, Visa generated $14.5 trillion in total payments and cash volume in its last fiscal year. Tax revenue in the third quarter rose 10% to $8.9 billion on an 8% increase in payment volume. Cross-border volumes increased by 14%.

However, Visa stock is flat for the year. High interest rates and inflation weighed on its performance, but the stock is back 14% from its lows. While a recession could hurt growth as consumers cut back on spending, the next uptick would wipe out any declines. A $10,000 investment in V stock during the 2008 financial crisis would be worth more than $207,000 today.

And don’t buy Visa just for the capital appreciation. Although its dividend yield is less than 1% annually, the payments processor has grown payouts at double-digit rates for over a decade. This makes V one of the best stocks to buy regardless of what the market is doing.

At the time of publication, Rich Duprey held a LONG position in ABBV and O. The opinions expressed in this article are those of the writer, subject to InvestorPlace.com Publishing Guidelines.

At the time of publication, the responsible editor had (either directly or indirectly) no position in the securities mentioned in this article.