Both the Dow Jones Industrial Average and S&P 500 indexes ran out of steam in August. Having rallied the month before, both popular market indexes are falling just as rapidly on recession fears as the Federal Reserve indicates it is intent on maintaining a hawkish position on inflation.

Consumers are getting squeezed just as the central bank is committed to cooling off the economy, which will result in even more hardship for people. Amid such gloomy scenarios, it's difficult to determine which stocks might be able to buck this downward trend. As such, many investors may decide to just sit on the sidelines. However, that could be a mistake.

An adult and child on a ship pointing out to the sea.

Image source: Getty Images.

Popular investing wisdom that says "it's not about timing the market, but your time in the market that matters." This idea is never more true than now. Looking back over the past 20 years, the stock market has returned about 10% on average, but if you missed the 10 best days in the market, your returns would be nearly cut in half to just 5.3% a year. 

That's why choosing stocks that will be able to thrive -- not just survive -- any potential downturn is critical to your future wealth. It's also why I think cruise line operator Carnival (CCL -0.27%) -- a growth stock that I believe will beat the market in the years to come -- is worth considering today.

Carnival carries a heavy anchor

Carnival is performing much worse than the broad market index. In fact, Carnival stock is down 58% year to date compared to the 18% decline in the S&P 500.

The cruise industry has yet to recover from the crushing blow the coronavirus pandemic landed, and Carnival has so far only managed to stop its business from sinking. There's plenty more work for Carnival to do if it plans to set sail again on the high seas.

One element bogging down cruise ship operators like Carnival is the heavy debt load they were required to assume just to remain solvent during the extended period they were prevented from operating. Many businesses were allowed to reopen after a few months of forced closures, but cruise ships were prohibited from sailing for over a year.

Carnival has over $35 billion in debt on its books at the end of the second quarter, or almost four times the $9 billion it carried at the end of the same period in 2019. Meanwhile, Norwegian Cruise Line has $12 billion in debt now versus less than $6 billion three years ago. Royal Caribbean Cruises has almost $18 billion in debt compared to nearly $9 billion in 2019.

Although cruise ships are sailing again, boats are not quite as full as they used to be because of protocols adopted to meet Centers for Disease Control and Prevention strictures. Demand is up and bookings are strong, but revenues are nowhere near pre-pandemic levels. Carnival, for instance, reported $4.8 billion in revenue in 2019 but just $2.4 billion in the second quarter this year.

Ready to set sail

Yet that's all the more reason to be hopeful about the cruise industry and Carnival in particular.

As the largest cruise ship company, Carnival is the bellwether of the high seas, and it is starting to cruise along again -- albeit slowly -- because business is returning. Although revenue was down last quarter compared to three years ago, it jumped 50% compared to the first quarter. Furthermore, occupancy rates were at 69% versus 54% three months prior.

It also just reported that its bookings were "nearly double the level" for the same day in 2019 after it removed pre-cruise testing requirements and no longer required unvaccinated passengers to show proof of an exemption. 

There has been a steady build up in demand for taking cruises, and with more than 90% of its capacity sailing again, Carnival ought to see an equally steady return to normalcy.

Full steam ahead

Although Carnival has more debt than it did before the pandemic, it also has sufficient assets available to allow it survive and ultimately grow in the future. Cash and equivalents total $7.1 billion compared to $1.2 billion in 2019.

It's true that Carnival is still recording losses, but they narrowed considerably from a year ago. With the company forecasting revenue to grow over 6% annually for the next four years, Carnival should turn profitable again in 2023. A year after, it's anticipated to grow earnings per share by 43%.

With its stock shattered by the burden placed on it and the rest of the cruise industry, Carnival is a growth stock set to outshine the market in the years ahead.