With the Dow still below the psychologically significant 12,000 mark, it would do investors well to consider the impact a prolonged 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 less than that of the S&P, 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 an additional margin of safety. However, with CAPS investors rating them at three to five stars, we're getting companies that are expected to outperform. Our data suggests that the highest-rated stocks in the database significantly outperform the lowest-rated ones.

When I ran the screen, it returned 67 stocks. Below, I've listed five that look like they could do well in any extended downturn.


CAPS Rating (out of 5)

3-Year Average Revenue Growth

3-Year Average EPS Growth


P/E Ratio

Aktieselskabet Dampskibsselskabet Torm (NASDAQ:TRMD)






Agria (NYSE:GRO)






Nationwide Health Properties (NYSE:NHP)






Hornbeck Offshore Services (NYSE:HOS)






Fomento Economico Mexicano (NYSE:FMX)






Source: Motley Fool CAPS screener.

Aktieselskabet Dampskibsselskabet Torm
Despite the company’s almost impossible-to-pronounce name (let's just call it "ADT"), top-rated All-Star CAPS investor hazelnut283 sees oil shipping company ADT offering investors an opportunity to benefit from oil's demand without the risk associated with drilling for it:

I only recently found this company and it sounds really promising: a tanker shipping company for oil and other supplies based in Denmark. It sounds neutral and can definitely take advantage of high demand for oil, without the risk of being an oil company. Also it has some of the most amazing dividends I have ever seen... this one is sure to go way up in value in the forseable future :)

Chinese seed and sheep herder Agria has been trying to overcome business conditions that led it to overhaul its sheep facilities last quarter. It’s also facing negligible corn seed sales in the coming quarter. Like competitor Origin Agritech (NASDAQ:SEED), it's dealing with a glut of seed on the market, but CAPS member seanmcb2 thinks it has a good niche to occupy for future growth:

ok, they have great expected earnings for the future. peg is great. They are the only public company in their sector in china, thats a great market nitch i'd say. very undervalued.

Fomento Economico Mexicano 
Mexican bottler for Coca-Cola (NYSE:KO) Fomento Economico Mexicano has attracted CAPS members like StockSpreadsheet, who routes us from CAPS to the Fool's discussion boards to point to the company’s stable growth prospects in a market that is expanding:

As near as I can tell, they have good growth prospects in a growing sector of the world and are reasonably profitable. Soft drinks are also fairly recession proof, (people will probably give up their Starbucks coffee before they give up their Coke, since they can at least brew coffee at home and what else are they going to drink?), so I don't think that the current slowdown will hurt them too much, (as opposed to a Starbucks or a Coach or any other expensive retailer). Therefore, I think this could make a decent core holding that can be kept for a long time.

Take a recess
Market downdrafts can wreak havoc on your portfolio, but there's no reason to hide your money in the mattress. These five 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. Use the screener, read a company's financial reports, scrutinize key data and charts, and examine the comments your fellow investors have made, all from a stock's CAPS page. Then weigh in with your own thoughts on which stocks you think can keep the dogs of recession at bay.

Coca-Cola is a Motley Fool Inside Value recommendation. Starbucks and Coach are both Stock Advisor choices. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Rich Duprey does not have a financial position in any of the stocks mentioned in this article. You can see his holdings here. The Motley Fool has a disclosure policy.