Recession resistance can come in many forms. Sometimes this advantage is derived from the industry a business operates in. Southern Company (SO -1.35%) is a regulated electric utility, and Essential Utilities (WTRG -1.18%) is a regulated water utility. Utilities benefit from higher resource consumption, which can come from economic growth and population increases. But utilities aren't nearly as vulnerable to the economic cycle as most industries.

Recession resistance can also come in the specific niche a company has in a given sector. Like utilities, healthcare is an inherently safe sector no matter the market cycle. Intuitive Surgical (ISRG 1.02%) takes that safety a step further with its wide moat and growth potential.

Here's why all three safe stocks are worth buying now.

A person wearing personal protective equipment inspects a hydroelectric power station.

Image source: Getty Images.

This robotic-assisted surgery technology company has plenty of long-term growth potential

Lee Samaha (Intuitive Surgical): Like nearly every other stock, Intuitive Surgical is subject to market sentiment and relative valuation arguments. As such, don't be surprised if it gets sold off during a broader market sell-off. 

That said, while many other companies can have their growth prospects questioned in a slowdown, Intuitive Surgical is a company investors can have a lot of confidence in to deliver on long-term growth expectations. The company developed and remains the dominant player in the robotic-assisted surgery market. 

It's a market with high barriers to entry coming from the significant expense required to develop the technology and relationships with surgical centers necessary to succeed. Surgeons must be completely comfortable and cognizant of the technology before making a high-ticket purchase or leasing agreement. 

While the surgical equipment attracts most of the attention, it's worth noting that Intuitive actually generates more than 70% of its revenue from from recurring sources, namely instruments, accessories, and services. As such, as the adoption of the technology grows worldwide -- not least because it is less invasive, more cost-efficient, and offers better patient outcomes -- so will equipment placements, leading to recurring solid revenue growth. 

Those long-term prospects are unlikely to be negatively impacted by a temporary period of economic weakness, making it a good stock to buy in a recession.

Turn to Southern Company for a reliable dividend

Daniel Foelber (Southern Company): Southern Company is one of the largest utilities in North America. It has 12.5 gigawatts of generation capacity, over half of which is through seven massive natural gas plants in Alabama, Georgia, and North Carolina. 

The company is known for being a fairly conservative utility during a time when some utilities are being ultra-aggressive with their solar and wind investments. This isn't to say Southern Company isn't investing in solar and wind (it has plenty of solar assets in Arizona and wind assets in the southern portion of the Great Plains in Texas and Oklahoma). Rather, the focus for Southern Company is on its dividend, and supporting the existing dividend and future dividend raises is something Southern Company investors have come to expect for 76 years.

Southern Company has a dividend yield of 4%, which is far higher than the yields of many other safe dividend stocks and well over double the dividend yield of the S&P 500. It's not a high-growth business by any means. However, it is a stable one. As a regulated electric utility, Southern Company works with government agencies to charge fair prices. In exchange, it gets stable cash flows and a virtual monopoly over the regions it serves.

The utility sector typically underperforms a bull market. And due to the lack of growth, it also underperforms the S&P 500 over time because it isn't really a bet on the American economy in the same way the broader market is. However, the utility sector is an excellent choice for risk-averse investors looking for a reliable passive income stream.

A stock like Southern Company is a good way to take on a little more risk than a U.S. treasury, while getting a comparable yield. Utilities may be slow growers, but they do benefit from population growth, and, in turn, increased electricity usage. So investors looking for a safe investment with a little extra risk and more growth than the risk-free rate should consider Southern Company.

Quench your thirst for safe passive income with Essential Utilities

Scott Levine (Essential Utilities): Pinching the purse strings during an economic downturn can take lots of forms. Of the various strategies that people might implement, however, it's likely that saving money by using less water isn't one of them. For this reason, many investors concerned about the impact of a recession on their portfolios will turn to conservative businesses like regulated water utility Essential Utilities and its 3.2% yielding dividend.

In addition to water and wastewater services, Essential Utilities also provides natural gas services to a combined 5 million people in 10 states. Of its various operations, the company's regulated businesses make up the lion's share of the company's operating revenue, about 97.3% in 2022.

The steady nature of the company's business provides it with great insight into future cash flows, helping management to plan for capital expenditures accordingly. While the company consistently uses capital to acquire smaller municipal utilities, management has also demonstrated a concerted interest in rewarding shareholders with a dividend.

From 2025 to 2023, Essential Utilities has increased its dividend at a compound annual growth rate of 7% -- and it's not as if this has come at the cost of the company's financial health. Over the past 10 years, Essential Utilities has averaged a payout ratio of 67%. In the coming years, management aspires to maintain its judicious approach to the dividend, targeting a payout ratio lower than 65%.

With shares of Essential Utilities trading at 11.9 times operating cash flow -- a discount to their five-year average cash flow multiple of 20.8 -- those looking to fortify their portfolios with this utility stalwart can do so on the cheap.