While there are many different views about what will happen to S&P/ASX 200 Index (ASX: XJO) shares in 2023, most experts agree on one thing — the global economy will have a rough year.
Interest rates rose rapidly through the developed world last year, and that is starting to bite consumers and businesses alike. The full impact will be felt in 2023, with some countries even plunging into recession.
During such times, it's not a bad idea to search for ASX shares to buy that represent businesses that have resilient earnings. Some companies produce goods or services that people simply can't do without, even in tough economic times.
Here are two stocks exactly in this position that have been rated as buys this week:
Image source: Getty Images
'A bright outlook'
Endeavour Group Ltd (ASX: EDV) is both an alcohol retailer and an operator of hotels and pubs.
Ord Minnett senior investment advisor Tony Paterno reckons it's a stock worth buying at the moment.
"Endeavour operates liquor outlets, hotels and gaming facilities. Recent electronic machine gaming has been strong in Victoria, Queensland and South Australia," Paterno told The Bull.
Buying Endeavour stocks now would be backing the idea that Australians will still have a drink through the tougher part of the economic cycle.
Paterno is pleased with the direction the business is heading.
"Group sales in the first quarter of fiscal year 2023 were up 3.1% on the prior corresponding period," he said.
"The company offers diversified revenue streams and a bright outlook."
The Endeavour share price has been up and down over the past year but is now 3.8% up. The stock pays out a dividend yield of 2.36%.
Paterno's peers are somewhat divided on the alcohol retail giant though. According to CMC Markets, five of nine analysts are rating it as a buy but three others are urging investors to sell.
Demand for decades
If you want evidence of how the world can change rapidly in just one year, you just need to take a look at coal mining stocks.
Only 12 months ago, ASX shares related to coal were untouchables. The theory was that, sooner or later, environmental imperatives would catch up with these companies, so avoid them like the plague.
But after a war in Ukraine and energy prices spiking up like this generation has never experienced, coal producers have gained remarkable popularity.
Paterno's current pick, New Hope Corporation Limited (ASX: NHC), has seen its share price gain a whopping 160.8% over the past year.
The party will continue, as far as Paterno is concerned.
"Asia is expected to remain a relative bright spot for coal demand in coming decades," he said.
"Near-term thermal coal prices remain high on supply concerns, as the war in Ukraine reinforces the need for energy security."
High coal prices have allowed New Hope to "generate strong free cash flow and return cash to shareholders via fully franked dividends", said Pateno.
"We expect an attractive dividend yield this financial year based on the current share price."
