While the economy currently appears to be on firm footing, investors should always be prepared for the next, inevitable recession.  Indeed it’s wise to have some portfolio exposure to companies that can actually thrive during downturns.

#-ad_banner-#Case in point: Dorman Products (Nasdaq: DORM), a leading supplier of replacement automotive parts. The company’s counter-cyclical business model enables it to weather recessions better than most companies. 

Why should you consider such a stock right now? Although sales of new cars and trucks are currently quite strong, history suggests that such momentum won’t last.  In nearly every recession going back to 1980, sales of vehicles have dropped sharply from cyclical peaks. When a recession hits, consumers tend to repair rather than replace their aging cars and trucks.

Dorman’s strength throughout all phases of the business cycle is perfectly illustrated in its consistent sales growth. The company managed to increase sales, even during the economic downturn of 2008 and 2009. 

According to the Institute for Highway Safety, the average age of all cars on the road is still a record 11.5 years and is expected to stay in near there for the next several years. The relatively high age of the current national fleet suggests that demand for auto parts at repair shops will remain strong. Indeed analysts expect Dorman’s sales and profits to grow at a double-digit pace in 2016. That should still be the case, even if the pace of new car sales sharply slows. 

The Retail Titan’s Comeback

Wal-Mart Stores, Inc. (NYSE: WMT) needs no introduction. The ubiquitous retailer is famous for its low prices and giant stores that sell everything under the sun. Its importance to consumers makes it nearly recession-proof. As was the case with Dorman Products, the most recent recession (of 2008 and 2009) didn’t stop Wal-Mart from boosting sales every year. 

Wal-Mart focuses on necessities, not discretionary items, and its hugely efficient supply chain gives it a sustainable pricing advantage. That leads to a very sticky customer base. 

Shares of this retailer have fallen 25% from the all-time high and are trading near the 52-week low. Investor sentiment has turned negative due to flat revenue and higher costs, leading to lower operating profits in its most recent quarter. 

However, the extreme pessimism isn’t warranted. Wal-Mart has been making heavy investments in its e-commerce platform to more effectively compete with Amazon.com (Nasdaq: AMZN) and other online sales platforms. Long-term investments in the company’s sales platform will lower operating costs down the road and add to the value proposition that Wal-Mart can offer consumers in a recession. 

By offering products that are in demand throughout the economic cycles, both of these companies look to deliver market-beating returns for years to come 

Risks To Consider: Recessions are by nature unpredictable, and there’s no way to truly gauge how a downturn will impact a specific business model. 

Action To Take: Regardless of your investment style, both Dorman and Wal-Mart are solid values. Dorman’s growth will likely far exceed Wal-Mart’s, but for investors looking for a blue-chip dividend payer, Wal-Mart’s 2.8% dividend yield and mid-teens earnings multiple make it an attractive low-risk play.  

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