Top 3 stocks to consider amidst a slowing US economy

As the US economy shows signs of slowing, highlighted by recent jobs data falling short of expectations, investors are seeking stable opportunities.

According to David Kostin, Chief US Equity Strategist at Goldman Sachs, shifting focus to resilient stocks could be crucial.

Here are three stocks that stand out for their potential to perform well even in a downturn:

F5 Inc (NASDAQ: FFIV)

F5 stock is currently down about 6.0% versus its year-to-date high.

The recent weakness makes up for an opportunity to build a position in this stable growth name that may outperform in a slowing economy, Goldman Sachs’ Kostin wrote in a recent report.

At 16 percentage points, the 10-year EBITDA growth variability of F5 Inc. sits at the higher end versus its peers at writing.  

Shares of the cloud security company may be a great pick for the back half of 2024 as its management cited AI tailwinds as it issued better-than-expected guidance for the fourth financial quarter in late July.

Domino’s Pizza Inc (NYSE: DPZ)

Goldman Sachs strategist David Kostin also expects Domino’s Pizza to offer stable growth in a slowing economy.  

The 10-year EBITDA growth variability of the Michigan-based pizza restaurant chain is pegged at 7 percentage points at writing. The consensus is for DPZ to grow revenue by 7% and EPS by an even higher 10% in its current financial year.

Speaking with the Mad Money host Jim Cramer last month, Russell Weiner – the chief executive of Domino’s said “value has never been higher” as he disclosed an increase in orders. CEO Weiner also forecasted continued strength in his company’s US business at the time.

Domino’s stock currently pays a dividend yield of 1.38%, which is another good reason to have it in your portfolio.

Zoetis Inc (NYSE: ZTS)

The investment firm recommends owning Zoetis stock to position for a potential economic slowdown in the United States.

Earlier in August, the pet medicines and vaccinations company came in ahead of revenue estimates for its second financial quarter and raised its full-year guidance for the same metric by some $50 million.

Still, ZTS is down more than 5.0% versus the start of 2024, making it all the more attractive as an investment in writing.

The New York-listed firm saw “impressive global operational growth” in both companion animal and livestock businesses in its latest reported quarter.