After a year's worth of market turmoil, it can be tough to pick stocks you can feel good about buying. The technology-heavy Nasdaq Composite index lost a third of its value in 2022 while the broader S&P 500 index is down by close to 20% from its peak. The widespread declines in share prices have dented investors' confidence, and it's natural to feel uncertain about how businesses will fare in the coming months.
With such worries lingering as we head into 2023, one solid strategy is to stick with tried-and-tested companies that have proven track records of weathering crises. When a company is armed with a strong brand and decades of management experience, you can expect it to buoy your portfolio through economic storms. While their businesses chug along, you won't have to lose sleep over what the market is doing. Falling share prices could even open up splendid opportunities to accumulate these shares at attractive valuations.
Here are three solid stocks you can consider accumulating that should help to boost your portfolio's resilience.
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Caterpillar
Caterpillar (CAT 0.13%) holds a reputation as the world's leading manufacturer of mining and industrial equipment. Founded nearly a century ago in 1925, its machines are used in the construction, resource extraction, and infrastructure sectors, and the company has a strong track record of financial strength. Caterpillar's results over the past three years demonstrate how well the business has held up through the pandemic. Sales hit $53.8 billion in 2019, dipped to $41.7 billion in 2020, then rebounded strongly to $51 billion in 2021. Net profit, however, did much better, recovering from a low of $3 billion in 2020 to hit $6.5 billion in 2021.
Caterpillar's net income may have fluctuated over those three years, but its free cash flow generation was fairly consistent and averaged $4.4 billion per year. It's this type of consistency that has allowed the industrial giant to raise its dividend for 28 consecutive years. Its annual payout grew nearly 38-fold from $0.11 in 1994 to $4.28 in 2021 -- an impressive 14.5% compound annual growth rate.
Its momentum carried on into 2022. For the first nine months of last year, revenue rose by 15.2% year over year to $42.8 billion. Net income jumped by 20.2% to $5.2 billion. And with the mining and resource extraction sectors experiencing a recovery, Caterpillar looks poised to continue doing well.
Restaurant Brands International
Restaurant Brands International (QSR -1.12%) operates four quick-service restaurant chains -- Burger King, Tim Hortons, Popeyes, and Firehouse Subs. And it, too, experienced a dip in revenue and net income in 2020, then a strong rebound in 2021. Revenue for 2021 came in at $5.7 billion, exceeding the $5.6 billion it chalked up in 2019, while net income hit a three-year high at $838 million in 2021. What's more, Restaurant Brands International also generated an average of $1.1 billion in free cash flow over the period.
The company's financial momentum carried on into 2022, with a near-15% year-over-year rise in revenue to $4.8 billion in the first three quarters, while net income improved by 18.2% year over year to $779 million. And with Patrick Doyle joining the company as executive chairman back in November, more growth could be in the cards. Doyle was previously the CEO of Domino's Pizza (DPZ 0.90%) and was instrumental in growing its online delivery platform.
With new leadership to steer the company along with a new "Reclaim the Flame" strategy to accelerate growth in the US, Restaurant Brands International should continue to post healthy growth. The company had also recently signed an agreement with McWin, a master franchisee, to grow the footprints of Burger King and Popeyes in Eastern European countries such as Poland, Romania, and the Czech Republic. Popeyes has also signed an agreement to bolster its presence in Kazakhstan, broadening the company's reach in Central Asia and creating more opportunities for organic growth.
Domino's Pizza
Domino's is the No. 1 player in the global quick-service restaurant pizza market with a 20% share and close to 20,000 stores worldwide. This restaurant stock has posted impressive growth from 2019 to 2021, with revenue growing each year and climbing from $3.6 billion to $4.3 billion. Net income also expanded steadily from $400.7 million to $510.5 million over that period. Domino's registered same-store sales growth from 2019 to 2021 as more people ordered in during the pandemic.
The pizza chain also grew its total store count from 17,020 in 2019 to 18,848 in 2021. Thanks to consistent share buybacks, its weighted average share count was reduced from 41.9 million to 37.7 million, enhancing its earnings per share (EPS) growth: EPS went from $9.56 in 2019 to $13.54 in 2021. Over the first three quarters of 2022, revenue inched up by 4.3% year over year to $3.1 billion, but net income tumbled 17% to $294 million as the company grappled with higher costs of sales and increased expenses. Nevertheless, Domino's continued to generate positive free cash flow and also saw net store growth of 225 in its most-recently reported quarter.
Just last month, the company further expanded its global presence by opening new stores in Uruguay and Latvia, adding to the list of countries in which it operates. With its strong presence and dominant market share, Domino's looks set to continue growing both its top and bottom lines.
