However, as we move into a post-pandemic world, stimulative measures are being reduced to combat rising inflation and repay government debts. To put it simply, consumer and investment spending is likely to slow down or even fall, which will negatively affect businesses and therefore stocks.

Therefore, in the event of a stock market crash, I focus my attention on defensive, non-cyclical stocks, also known as blue chips. These are stocks of nationally recognised companies with stable earnings during good and bad times. Some non-cyclical industry examples include utilities, consumer staples, and healthcare. If the economy or stock market is down, the sick still need medicine and no one wants to shower with cold water – at least I hope not…

Cash flow is king

SSE is a multinational energy company headquartered in the UK. Though the stock experiences frequent variations in prices and has outperformed the FTSE 100 so far in 2021, the stock is ideal for me as I’m after passive income with my shares. SSE shares yield 4.98 % in dividends as of October 22^nd, 2021, and dividend payouts have increased since the start of the pandemic. Comparing this to Apple shares, which yield a dividend of just over 0.6%.

Can’t go without medicine

Johnson & Johnson is a global holding company that engages in the research and development, manufacture, and sale of products in the healthcare field. It is arguably most known for its Covid-19 vaccine or its iconic baby shampoo that promise no tears. For more than 50 years, Johnson & Johnson has raised its dividend payments, qualifying the company as a dividend king!

During bad times, I look at stocks from a consumer point of view. Will consumers continue to demand pharmaceutical products? How about consumer health products? I’d say yes and therefore consider Johnson & Johnson a stock worth adding to my portfolio after a stock market crash.

Don’t forget household essentials

Unilever is a British multinational consumer goods company. The company owns companies that produce everyday household essentials thatconsumers require no matter the state of the economy or stock market. Like Johnson & Johnson and SSE, Unilever pays a relatively high dividend, which makes it an ideal asset for me as a passive-income investor. Furthermore, the case for Unilever is strengthened as the company achieved a stable increase in profits of €6,073 billion in 2020, up 0.78% year on year. However, the price of Unilever stock is yet to recover from the shock caused by the pandemic in 2020 and is down over 12% for the year at the time of writing.

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Alexander Fazel has no position in any of the shares mentioned. The Motley Fool UK has recommended Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

What do the professionals think?

AstraZeneca received a Composite Rating of 77 out of 99 in September 2021 by Investor’s Business Daily, which places the equity ahead of two-thirds of all stocks. Composite Rating is an overall score based on earnings-per-share, sales growth, profit margin growth, return on equity, S&P 500 performance, and institutional buying and selling.

Further, surveys from 14 analysts offering 12-month price forecasts for AstraZeneca had a median target of £94.60 with a high of £105 and £69.50, suggesting that based on this consensus AstraZeneca is trading 6.4% below its price target. The lower price targets are predominantly due to controversy around the efficacy of the AstraZeneca vaccine.

Never undermine the value of debt

Large accumulations of debt can be an indicator of bad operational efficiency within a company, as seen recently via Evergrande, but for biotech and pharmaceutical companies, debt is necessary. As of June 2021, AstraZeneca’s net debt stands at US $29.2 billion. However, research and development are core to biotechnology and pharmaceutical companies because innovation is financed by debt.

Though it can take on average 10 years to get develop a drug and take it to market, AstraZeneca has recently developed an asthma treatment, which has now received priority review in the US. If approved, AstraZeneca will generate a large revenue source through a key solution in the fight against asthma which affects 300 million people worldwide.

Strong revenue growth and diversification

More recently, the Oxford/AstraZeneca vaccine has proven to be a strong weapon in the fight against the Covid-19 pandemic as well as a strong revenue source for the multinational pharmaceutical company. 2020 annual revenues rose to US$26.62 billion, up 9.2% year on year, and Q1 2021 revenues were up 11% from Q1 2020, with 4% of quarterly revenue from the Oxford/AstraZeneca vaccine.

AstraZeneca is also one of the most diversified medical companies with operations in several fields of study. Diversification is a key indicator of resilient profitability despite variations in product demand. As we move into a post-pandemic world, demand for Covid-19 vaccines will inevitably decline, hence a diversified product portfolio means that AstraZeneca does not rely on its Covid-19 vaccine as a source of revenue.

Insider activity can give insights on company outlook

Company insiders at AstraZeneca own roughly 0.08% of stock amounting to around £90 million of the company’s market capitalisation. Over the past year, insider share buying has surged whilst sell-offs are non-existent. Notably, non-executive director Philip John Broadley bought £100k worth of shares at a price of £76.25 per share. Considering significant internal purchases of company equity and no recorded selling of AstraZeneca shares, this can inform investors that their long-term objectives are aligned with management. As a result, I’m strongly considering adding AstraZeneca shares to my portfolio!

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Alexander Fazel has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.