Resilient Investing: 3 Stocks Built to Weather Market Volatility

Key Points

• Diversified revenue streams across multiple business segments and industries help insulate companies from sector-specific economic downturns.
• Strong balance sheets provide a crucial financial cushion for navigating challenging economic climates.
• Consistent profitability and a commitment to innovation can position companies, despite market fluctuations, for long-term success and growth.

As inflationary pressures persist and the specter of a potential recession looms, investors are understandably seeking stability. While predicting market movements is always challenging, focusing on companies with inherent resilience offers a sound strategy for navigating uncertain economic waters. Resilience investing prioritizes businesses that demonstrate financial health, diversified income streams, and a proven capability to manage economic fluctuations. This approach emphasizes long-term value creation and the ability to withstand market downturns rather than chasing short-term, speculative gains.

Johnson & Johnson: A Healthcare Cornerstone

Johnson & Johnson NYSE: JNJ embodies the classic "defensive" investment, finding strength and resilience in the traditionally stable healthcare sector. More than just a maker of consumer health products, JNJ boasts a diversified business model spanning Innovative Medicine (pharmaceuticals) and MedTech (medical devices). This breadth of operations provides a crucial buffer against downturns that might affect any single area. Johnson & Johnson’s exceptional financial health is underscored by its diversification and impeccable AAA credit rating, a distinction shared by only one other US-based company, Microsoft. 

The company's status as a dividend aristocrat, with 63 consecutive years of dividend increases, further solidifies its reputation for reliability. Investors seeking consistent income streams, even during periods of market turmoil, often turn to such established dividend payers. In 2024, JNJ reported revenue of $88.821 billion, a 4.3% increase from the previous year, while adjusted net earnings reached $24.242 billion. Looking ahead, the company provided 2025 operational sales growth guidance in the range of 2.5% to 3.5%. This steady growth is characteristic of resilient companies that prioritize consistent performance over dramatic but potentially unsustainable gains. 

The Innovative Medicine segment saw operational growth of 5.7% in 2024 (7.5% excluding the COVID-19 vaccine), driven by key drugs like DARZALEX (for multiple myeloma) and ERLEADA (for prostate cancer). The MedTech segment, meanwhile, achieved 6.2% operational growth, fueled by electrophysiology products and the Abiomed cardiovascular business. While JNJ faces ongoing litigation risks related to talc products and the ever-present pressure on drug pricing, its diversified portfolio and financial strength position it to weather these challenges. As of March 13, 2025, JNJ stock traded at around $163.00. Analyst consensus rates the stock a Moderate Buy, with an average price target of $171.33, reflecting a potential upside. 

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Microsoft: Recurring Revenue and AI Leadership

Microsoft NASDAQ: MSFT demonstrates that resilience isn't confined to traditionally defensive sectors. While the tech industry can experience significant volatility, Microsoft has successfully transitioned to a business model that prioritizes recurring revenue streams, primarily through its cloud services. This strategic shift has created a foundation of stability that allows Microsoft to navigate economic headwinds more effectively. The company isn't just surviving; it's thriving, driven by leadership in its artificial intelligence (AI) programs.

Microsoft's second quarter of the fiscal year 2025 showcased the power of this transformation. Total revenue reached $69.6 billion, a 12% increase year-over-year. Crucially, Microsoft Cloud revenue surged to $40.9 billion, representing a 21% increase. This growth was fueled by a remarkable 31% increase in revenue from Azure and other cloud services. CEO Satya Nadella emphasized the company's commitment to helping customers "unlock the full ROI of AI," noting that Microsoft's AI business has already surpassed an annual revenue run rate of $13 billion, representing a staggering 175% year-over-year growth. 

The Productivity and Business Processes segment, which includes Office 365, also contributed significantly, with revenue up 14%. While the More Personal Computing segment, encompassing Windows and Xbox, saw more modest growth, the overall picture is one of a diversified and healthy business. As of March 13, 2025, MSFT traded around $380.23. The analyst consensus is a Moderate Buy, with an average price target of $510.43. It is worth noting again that, like JNJ, Microsoft holds a coveted AAA credit rating, demonstrating exceptional financial strength.

Waste Management: Turning Trash Into Resilience

Waste Management NYSE: WM offers a compelling example of resilience rooted in the essential nature of its services. Regardless of economic conditions, waste generation continues, providing WM with a remarkably stable revenue base. This inherent stability, combined with the company's dominant market position in North America and a large number of long-term contracts, makes it a standout performer in uncertain times.

Waste Management's 2024 financial results provide tangible data showing this resilience. The company reported a revenue of $22.063 billion, an 8.0% increase over the previous year, and an adjusted operating EBITDA of $6.563 billion. The company is projecting continued strong growth in 2025, with revenue expected to increase by 16.4% and adjusted operating EBITDA by 15.0%. This consistent performance is a testament to WM's effective management and its ability to leverage its extensive network of landfills, transfer stations, and recycling facilities. 

Beyond its core waste collection and disposal services, WM is increasingly focused on sustainability initiatives. The company is investing heavily in renewable natural gas projects, leveraging the gas produced by its landfills, as well as in advanced recycling facilities. These investments are driven by a clear strategic direction to provide essential services, no matter the market. As of March 13, 2025, WM stock traded around $223.72. Analysts rate the stock as a Moderate Buy, with an average price target of $236.65. The consistent financial performance and positive outlook reflect the enduring value of this essential service provider.

Resilience: A Strategy for All Seasons

Johnson & Johnson, Microsoft, and Waste Management demonstrate that resilience investing isn't about a single industry or approach. The goal is to identify companies with a variety of positive characteristics, such as strong financials, diversified revenue streams, proven leadership, and adaptability to market changes.

While past performance is never a guarantee of future returns, these companies have demonstrated a capacity to navigate economic turbulence. In a time of persistent market volatility and economic uncertainty, focusing on these fundamentals offers investors a compelling path toward long-term stability and growth.