It's been a tough 11 months for growth stocks. High inflation and the Federal Reserve's efforts to fight it by boosting interest rates are to blame -- valuations have tumbled across the board. This market downturn may feel terrible right now, but it's important to remember that tough times don't last. As investors, the crucial thing to do now is not to lament over your unrealized bear market losses, but instead, to position yourself to benefit from the recovery that is likely to follow.

Downturns don't affect all companies the same way, and those that are dominant in their respective industries and can retain customer loyalty even as they raise prices can prove resistant to their effects. Investors who want to capitalize on the current conditions should keep their eyes peeled for well-run, strong businesses that have been unjustifiably pushed into bargain-stock territory.

Here are three stocks you can add to your portfolio that will not only let you sleep soundly now, but are positioned to deliver upside for years to come.

Man Riding on Lawn Mower

Image source: Getty Images.

Tractor Supply Company

As a rural lifestyle retailer supplying a wide variety of products to farmers and ranchers, Tractor Supply Company (TSCO -2.12%) has built up a loyal following over the years. The chain includes more than 2,000 stores in 49 states, and the company also owns and operates pet supply retailer Petsense.

Tractor Supply boasts an impressive financial profile. Its net sales increased every year from 2017 to 2021, going from $7.3 billion to $12.7 billion. Comparable-store sales also rose during those five years, with notable surges in 2020 and 2021 due to the pandemic. Net income per share more than doubled from $3.30 to $8.61 from 2017 to 2021. The boost in the last two years came about from a shift in consumer behavior as more people focused on their homes and farms, and was also accompanied by a relaunch of the retailer's loyalty program, Neighbor's Club. Income investors will also be smiling as the company's quarterly dividend has grown more than 22-fold since it paid out a $0.04 dividend back in 2010.

Thus far in 2022, the positive momentum on revenue and earnings has continued. For the first three quarters, Tractor Supply reported net sales of $10.2 billion, up 8.4% year over year, while net income rose 5.4% year over year to $817.8 million. Management also boosted the dividend from $0.52 per quarter last year to $0.92 per quarter this year. The better performance was followed by a 5.7% increase in comparable-store sales for the third quarter, with Neighbor's Club membership rising by 23% to more than 27 million members.

Last month, Tractor Supply completed the acquisition of 81 stores from Orscheln Farm and Home that will be rebranded to Tractor Supply stores by the end of next year. With that successful acquisition, management increased its outlook for the company's total store opportunity to 2,800 locations. Investors can feel assured of continued steady growth from the rural retailer.

Mattel

Not many toy companies can match Mattel's (MAT -0.70%) scale and reputation. It owns beloved brands such as Barbie, Fisher-Price, and Hot Wheels that have been around for decades, and many middle-aged investors probably played with these toys in their younger days and are now letting their children experience them. Mattel has done a great job in improving its financial numbers over the past five years. Constant-currency net sales went from declining by 10% in 2017 to rising 18% last year, while its adjusted gross margin has improved significantly from 37.8% to 48.2% over the same period. What's more, the company has generated increasing amounts of free cash flow annually since 2019 -- and that metric doubled year over year to $334 million in 2021. 

In the first nine months of 2022, Mattel has achieved an impressive financial performance despite the macroeconomic headwinds. Net sales increased by 10% year over year to $4 billion while operating income jumped 26% to $596.5 million. Earnings before income taxes nearly doubled year over year to $489.9 million, but net profit was down year over year due to a tax benefit that the company enjoyed in the prior-year period. Trailing 12-month free cash flow dipped by just 5% year over year as of Sept. 30 to $303 million. Mattel is gearing up to provide guidance for 2023 when it delivers its fourth-quarter results, but has already said it expects to achieve both earnings and revenue growth next year.

Rollins

When it comes to pest control, Rollins (ROL -0.65%) is a market leader that has served millions of households over the decades. It sports a resilient business model that has seen it post two decades of consistent revenue growth an at average rate of 7% a year. Rollins even posted growth through periods of economic turmoil such as the financial crisis and the pandemic, and its revenue has climbed steadily from $2 billion in 2019 to $2.42 billion in 2021. Net profit rose in tandem from $203.3 million to $350.7 million.

Not only have Rollins' profits increased, but its business model generates copious amounts of free cash flow that have allowed it to raise its dividend payouts. For the three quarters of 2022, the pest control company reported an 11% year-over-year increase in revenue to $2 billion and a 5.7% rise in operating income to $368.3 million. Stripping out a large influx it booked in the "other income" category (most of which came from sale-leaseback transactions), Rollins would have once again reported a year-over-year jump in net income. Free cash flow improved by 14.6% to $319.6 million, and the company declared a 30% increase in its quarterly dividend to $0.13 per share. Based on its consistent track record, you can be fairly sure that Rollins can continue its steady growth.