There is a lot of talk of a recession amongst investors at the moment.
The bushfires were bad for the east coast Australian states, but the economic fallout of the coronavirus effects could be more damaging. Indeed, economists think it already has been worse.
No share is completely safe from price falls. Share prices are decided by buyers and sellers each day. However, there are some businesses which will be affected more than others.
These are 3 ASX shares that I think could be more protected than most other ASX shares in a coronavirus downturn:
Duxton Water Ltd (ASX: D2O)
Duxton Water is the only business on the ASX that purely owns water entitlements and leases them out to agricultural businesses.
Whether there's a coronavirus or not, people still need to keep eating food. Water is something that all farms need, so water security will remain very important, particularly with Australia's ongoing dry conditions.
Water values don't have much to do with economic cycles, it's related more to annual rainfall and the price of the food that the water is being used for.
It currently has a projected grossed-up dividend yield of 6.2%, which should be a helpful mitigator of lower share prices.
APA Group (ASX: APA)
APA Group is one of the biggest infrastructure businesses on the ASX.
APA Group owns a vast network of 15,000km of natural gas pipelines around Australia with a presence in every mainland state and the Northern Territory. It also owns or has interests in gas storage facilities, gas-fired power stations and renewable energy generation (wind and solar farms). It owns, or manages and operates, a portfolio of assets worth more than $21 billion and delivers half the nation's natural gas usage.
Gas will still be in demand during 2020 and energy will still need to be generated. There could be a lot more electricity usage at homes in the coming months if people decide to stay home more.
APA has grown its distribution every year over the past 15 years and currently has a distribution yield of 4.4%.
Rural Funds Group (ASX: RFF)
Rural Funds is another business that we can say the phrase "everyone needs to eat food". It doesn't grow the food itself, it's just the owner of the farmland that farming businesses use to grow almonds, macadamias, cattle, vineyards and cattle as well as cotton.
The cashflow produced by Rural Funds is unlikely to be affected much because of its long weighted average lease expiry (WALE) and its contracted rental income. Indeed, the cost of debt has gone even lower due to a lower RBA interest rate.
Management recently forecast that the FY21 distribution will be 11.28 cents per unit, which translates to a 6% distribution yield.
Foolish takeaway
I think the share prices of my above three ideas will hold up better than the broader share market, as they already have so far. Of the three I think I'd be most inclined to go for Rural Funds for the solid yield and fairly predictable growth of rental profit and distributions.
