Investors are increasingly concerned about the potential for a stock market downturn as questions loom regarding the sustainability of high valuations, particularly in the tech sector. With the S&P 500 having faced significant declines in 2022, many are reevaluating their investment strategies ahead of 2026.
Despite the broader market volatility, three specific stocks have shown remarkable resilience during recent challenges, each posting substantial gains last year. This has led some investors to consider these companies as safer options for their portfolios amid fears of a potential bear market.
### AbbVie (ABBV)
AbbVie defied the market’s downturn in 2022, with its shares rising by 19%. The healthcare company demonstrated steady growth, increasing its revenue by 3% and achieving a profit margin exceeding 20%. Although AbbVie is in the process of replacing revenue lost from the patent expiration of its once-dominant drug, Humira, its new immunology drugs, Skyrizi and Rinvoq, have emerged as robust alternatives.
The company operates in various segments, including oncology, aesthetics, and neuroscience, allowing for diverse sources of growth. AbbVie’s current market valuation is appealing, trading at approximately 16 times its projected earnings, while its dividend yield of 3.1% exceeds the S&P 500 average of 1.1%. Investors looking for stability in a volatile market may find AbbVie an attractive option.
### Eli Lilly (LLY)
Eli Lilly notably outperformed the market, with shares soaring by 32% in 2022. Much of this success can be attributed to its development of groundbreaking GLP-1 drugs, Mounjaro for diabetes and Zepbound for weight loss. The regulatory approval of Mounjaro propelled Eli Lilly into the spotlight, creating a new revenue stream that has helped the company achieve sales exceeding $59 billion over the past four quarters.
While Eli Lilly’s valuation may experience some pressure in a potential downturn, its growth trajectory appears promising. The stock currently boasts a gross margin of 83% and offers a dividend yield of 0.6%. For long-term investors, Eli Lilly’s innovative approach and strong market position make it an appealing choice.
### Chevron (CVX)
Chevron was a standout performer in 2022, experiencing a 53% increase in stock price, making it the best-performing stock among the three mentioned. This surge can be attributed to the soaring oil prices that year, which were driven by geopolitical events that disrupted supply chains. Despite potential uncertainties around future oil demand and market fluctuations, Chevron maintains a solid business foundation within the oil and gas sector.
With a market capitalization of $301 billion, Chevron has consistently reported profits exceeding $15 billion over the last four years and offers an enticing dividend yield of 4.6%. The company serves as a potential hedge against inflation, making it a viable option for investors aiming for stability in turbulent market conditions.
### Conclusion
As uncertainties loom over the stock market, particularly regarding potential downturns, investors are advised to consider stable and well-performing stocks such as AbbVie, Eli Lilly, and Chevron. Each of these companies has demonstrated resilience, robust profit margins, and attractive dividend yields, positioning them as viable candidates for those looking to mitigate risks within their portfolios.
