Even though the Dow remains above the 12,000 mark, it would do investors well to consider the impact a renewed recession might have on their portfolios. It might be tempting to move to an all-cash position, but before you make such a hasty move, take the time to look at stocks that have the ability to hold up in tough times.

I used the Motley Fool CAPS supercomputer to look for companies that have proven to be less volatile than the market, but which have been reporting strong revenue and earnings growth over the past few years. With a beta of one or less, these companies ought to react less violently to any market swoon.

By adding in a measure of cheapness -- these stocks also carry a P/E ratio that’s less than average -- we build in a margin of safety. However, with the CAPS community according them high ratings, we're getting companies that are expected to outperform.

Below are a handful of stocks that look like they could do well in any extended downturn.


CAPS Rating (out of 5)


3-Year Avg. Rev. Growth

3-Year Avg. EPS Growth

P/E Ratio

El Paso Pipeline Partners (NYSE: EPB) ***** 0.2 131% 95% 18.2
Express Scripts (Nasdaq: ESRX) **** 0.8 31% 19% 23.2
Oracle (Nasdaq: ORCL) **** 1.1 17% 16% 19.8

Source: Motley Fool CAPS Screener.

Searching for an answer
Diversified natural gas company El Paso formed El Paso Pipeline Partners to own and operate its natural gas transportation pipelines and storage assets but still owns a 42% limited partner interest and 2% general partner interest in the partnership. The parent is spinning off its exploration and production business, too, and hiking its dividend to $0.60 per share. Being the toll taker will still be a lucrative business.

Although natural gas has bounced off its bottoms, it still stands at lower-than-normal levels and with 874 rigs still drilling, according to Baker Hughes, there's going to be a need for El Paso Pipeline's services. Analysts say rigs would have to fall below the 800 level to achieve balance in the industry. So until that happens in earnest, we'll need the pipelines and storage that El Paso, Enterprise Product Partners, and Energy Transfer Partners (NYSE: ETP) provide.

El Paso Pipeline has risen from its recent lows, a time when CAPS member GrowthnValue became interested in master limited partnerships in the sector and thought the depressed value represented a good opportunity. Many investors would have a hard time arguing, as 98% of the CAPS members rating El Paso think it will outperform the broad market averages.

Share your thoughts on the opportunity transporting and storing natural gas represents on the El Paso Pipeline Partners CAPS page or in the comments section below.

Price is what you pay
The question remains: Is Walgreen (NYSE: WAG) better off after the breakup, or is Express Scripts? Most likely, it's a divorce that does neither one any good.

The prescription benefits manager represented about 7% of Walgreen's revenues, or $5.3 billion. Express Scripts says only WellPoint and the Department of Defense comprise a significant part of their sales, representing almost 30% and 20%, respectively.

While this single relationship might not be good for either party, Walgreen seems to be having commitment issues these days. Last year, it broke up and then made good with CVS Caremark (NYSE: CVS), which would have cost it an additional $4.5 billion in sales. I severed my own ties with Walgreen this year in favor of MedcoHealth Solutions' mail order option, because their prescription prices were dramatically cheaper. At this rate, Walgreen is going to have fewer and fewer customers willing to fill their meds with them.

While shares of Express Scripts have given up about 10% from their recent highs, CAPS member troym72 believes it has the management team in place that can make the right changes:

Express Scripts is in a great position to take advantage of the aging population which will is in greater and greater need for regular maintenance medications, which falls right into their mail-order strategy. Increasing Revenue and EPS over the last 5 years shows that Express Scripts has the leadership and direction to keep growing for years to come.

Add Express Scripts to the Fool's free portfolio tracker and follow along to see how long the PBM specialist holds up.

Stick it to 'em
Oracle and Hewlett-Packard (NYSE: HPQ) are also having separation issues; both are engaged in a nasty-battle-getting-nastier as the former decides to stop supporting Intel's Itanium chip. That chip is critical to HP's ability to compete, and it charges that Oracle's lack of support represents a breach of contract between the two titans.

Like one-time lovers who can't stand to look at each other anymore, the tit-for-tat arguments and one-upmanship have some thinking only IBM will come out of this looking good.

Regardless of the outcome, CAPS member astephan2525 thinks Oracle remains head and shoulders above the competition:

There are relational databases and then there is Oracle; it's in a class by itself. The amount of data in the world is exploding. Oracle's acquisition of Sun brings them hardware, technologies like Java, and in general the opportunity to widen their business.

If you're interested in learning more about whether Oracle can fight all the battles it's currently waging, add the stock to your watchlist to get all the Foolish news and analysis about it.

Take a recess
Market downdrafts can wreak havoc on your portfolio, but there's no reason to hide your money in the mattress. These three recession fighters look to have the goods to keep your portfolio on the upswing, but it pays to start your research on these stocks on Motley Fool CAPS. Then weigh in with your own thoughts on which stocks you think can keep the dogs of recession at bay.

The Motley Fool owns shares of El Paso, Oracle, IBM, and MedcoHealth Solutions. The Fool owns shares of and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of MedcoHealth Solutions, WellPoint, Enterprise Products Partners, and Intel, as well as creating a diagonal call position in Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Fool contributor Rich Duprey owns shares of Intel but does not have a financial position in any of the other stocks mentioned in this article. You can see his holdings here.