2021 has started off as a confusing time for investors. The vaccine rollout has led to hope of an economic recovery and the markets have closed at new records. A second pandemic stimulus/relief package will help millions of Americans.

However, the emergence of a new coronavirus strain in the UK and the persistence of COVID-19 cases in the US are making market players wary of a crash that is just around the corner. What does one do when this is the case?

One looks at stocks that will be able to withstand a market crash. When the going is good, it is time to take a relook at one’s portfolio and identify recession-proof stocks. Here are three stocks that should be able to withstand a recession in 2021:

Amazon (AMZN):

Amazon stock is trading at $3,160 levels currently but don’t let the high stock price throw you off. The e-commerce behemoth is on its way to becoming even bigger in 2021. It has benefited a lot from the pandemic and, according to reports, will end 2020 with 410 million sq feet of fulfillment centers, up 80% from 2019. It announced five new fulfillment centers in the last two weeks of December 2020.

These centers are key to Amazon’s expansion in the grocery delivery space. The grocery market in the US is worth around $700 billion. If there is a market crash and a recession in 2021, grocery and discretionary items will be in demand and Amazon will be in the perfect position to fulfill these customer needs.

Its Prime membership is a huge point of focus for Amazon. The company has grown its prime membership by around 12.5% in 2020. These members across the world will all depend on Amazon in 2021 to fulfill a lot of their e-commerce spends.

Amazon’s move into the e-medicine space with the launch of Amazon Pharmacy will see it disrupt yet another market. It is likely that Amazon will cut into the market share of companies like Walgreens and CVS.

Analysts have given the stock a target of $3,819, an upside of almost 20% from current levels. This stock is an easy buy in a bad market. If the stock price is too much for you to invest at one shot, you could consider going in for a fractional ownership system that would help you pick up the stock over an extended period of time.

Costco Wholesale Corporation (COST):

Costco is a company that has stood the test of time. It is an all-weather stock and Costco members fawn over the company. The retailer has grown the number of paid memberships from 47.6 million to 58.1 million over the last five years, with a 90% renewal rate across all markets it operates in. It’s no surprise that the company announced double-digit growth for the five weeks ended January 3, 2021.  

Costco reported sales of $19.14 billion for December 2020, an increase of 12.3 percent from $17.04 billion last year. And this was a slow month thanks to people staying indoors and having smaller family gatherings for the holidays.

Costco’s dividend payout is not huge with a forward yield of just 0.76% but the company does like to surprise its investors. In December, it announced a $10 special cash dividend. How’s that for a Happy New Year!

And Costco hasn’t let the pandemic let it get lazy. It leaned into its e-commerce business and increased revenues by 62.5% in December 2020 compared to December 2019 and by 75.2% for a year-on-year comparison for an 18-week period.

The stock trades at $368 right now and analysts have given it a target of $400. Good times or bad, Costco is a safe haven for investors.

AT&T (T):

AT&T is a dividend investor’s dream stock. The stock trades at $30 and has a forward yield of 6.95%. The company has tons of cash to distribute to its investors and doesn’t hesitate to do so. AT&T expects to generate free cash flow in the $26 billion range in 2021 (exclusive of proceeds from potential asset divestitures).

The stock had a bad 2020 thanks to the pandemic. Its major media plays HBO Max and the Warner Media acquisition couldn’t contribute much as shooting almost ground to a halt during the lockdowns. Multiplexes were shut through the year and the media business suffered.

 As 2021 sees the economy opening up, its media and advertising businesses should get a solid shot in the arm and the numbers should start adding to the bottom line. The company has slid 21% in 2020 and the company is taking measures to reverse the trend.

It has announced that it will release all 2021 movies on its HBO Max at the same time giving subscribers a very good incentive to get the service. HBO Max’s subscribers at the end of October 2020 were 57 million (global) which is well ahead of the company’s expectations. AT&T also added 1 million subscribers to for its wireless services.

AT&T stock is a good addition to a portfolio that wants passive income. The management has laid out a plan for continued dividend payouts and the company is confident that it can continue to generate similar levels of free cash flow. A market crash in 2021 could make this stock very attractive.