3 Healthcare Stocks That Have Held Up in Every Market Downturn

Economic downturns cast a wide net across the market, and there's no stock that's completely immune to a recession. However, certain income-oriented healthcare stocks can help investors weather economic storms.

Johnson & Johnson (NYSE: JNJ), Abbott Laboratories (NYSE: ABT) and Becton, Dickinson (NYSE: BDX) fared better than the S&P 500 in total return during the Great Recession that lasted from December 2007 to June 2009 and the 2020 COVID-19-related downturn from Feb. 19, 2020, to Aug. 18, 2020; two of the three stocks outpaced the S&P 500 during the 2022 Inflation Crash that went from Jan. 3, 2022, to Oct. 12, 2022.

There are three reasons why that trio fared better than most stocks during recessions. They have diversified revenue streams, all are all Dividend Kings (the select group of companies that have grown their dividends for 50 or more consecutive years), and all have dependable recurring revenue.

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Johnson & Johnson, the classic survivor

The company is a defensive healthcare play. It has raised its dividend 63 consecutive years, including a 5% raise last year to $1.30 per quarterly share, equaling a 2.19% yield at its current share price.

While its 2023 spinoff of its consumer healthcare division into Kenvue trimmed its diversity a bit, it's still a huge company. It operates in two segments, innovative medicines and medtech. The Kenvue spinoff has made Johnson & Johnson more profitable. In 2025, J&J reported a trailing net profit margin of 28.5%, a big jump from the 15.8% reported in 2024.

The company has 52 approved drug therapies and more than 67 approved medical devices. It doesn't rest on its laurels, having spent more than $14.7 billion in research and development last year. J&J estimates that it will launch more than 10 medicines with $5 billion or more in annual sales by 2030, and by 2027, it expects that one-third of its medtech sales will come from products launched since 2022.

Johnson & Johnson is predicting 2026 revenue of $99.5 billion to $100.5 billion, up 6.2% at the midpoint, for its fifth consecutive year of revenue growth. It is also predicting adjusted operational earnings per share (EPS) between $11.28 and $11.48, an increase of 5.5% at the midpoint.

Abbott Labs is built for adaptation

The company's revenue is spread across four segments (diagnostics, devices, nutrition, and generics), ensuring that a downturn in one area rarely sinks the entire ship. Its ability to pivot is its greatest strength. During the 2020 downturn, it was one of the first companies to stabilize by rapidly developing COVID-19 testing kits, which offset the temporary decline in elective surgical device sales.

Abbott has increased its dividend for 54 consecutive years, including a 6.8% increase, effective this year to $0.63, equaling a yield at its current share price of around 2.38%. In 2025, the company reported sales of $44.3 billion, up 5.7%, and adjusted EPS of $5.15, up 10%. It said it expects 2026 revenue growth of 7% at the midpoint and adjusted EPS of $5.55 to $5.80, a 10% increase at the midpoint.

It sells thousands of products, including more than 1,500 generic medicines, which gives it an edge. When coronavirus testing sales declined as the pandemic ebbed, Abbott's medical device products more than took up the slack, particularly its cardiovascular and diabetes tools.

Becton, Dickinson: Steady as the economy goes

It is the world's largest manufacturer of basic medical supplies, such as needles and syringes. More than 90% of the medical device maker's income is built from recurring consumables, mostly nondiscretionary medical necessities that hospitals and laboratories require daily, regardless of the broader macroeconomic climate or interest rate fluctuations. It has more than 33,000 patents.

By maintaining a dominant market share in medication delivery and diagnostic testing, Becton, Dickinson has built a competitive moat that is difficult for rivals to replicate, especially as it shifts toward higher-margin connected care and biopharma services.

It reported first-quarter 2026 revenue of $5.3 billion, up 1.6%, and GAAP EPS of $1.34, an increase of 28.8%. It is forecasting low single-digit revenue growth for 2026. The company has raised its dividend for 54 consecutive years, including a 0.009% increase in 2025 to $1.25 per share, yielding 2.26% at its current share price.

Built to survive hurdles

All three companies face regulatory and legal issues that could drag down their shares.

Johnson & Johnson is facing more than 67,000 talc lawsuits, as well as a legal battle where the company seeks to block the U.S. government from negotiating prices for some of its top-selling drugs. Abbott is seeing escalating litigation and huge court judgments against it due to problems with its specialized baby formula. For Becton, Dickinson, it is still facing regulatory scrutiny from the Food and Drug Administration after settling lawsuits over concerns with its Alaris pump infusion sets and software.

The advantages all three share are their huge size and scope, which continue to generate steady revenue growth and enough funds to handle lawsuits. These companies' past ability to weather economic downturns also becomes a self-fulfilling prophecy, as investors will continue to turn to these stocks when economic clouds are on the horizon.

Their above-average dividends also help buoy their shares, as income-oriented investors are more likely to hold these steady stocks for the long term.

James Halley has positions in Johnson & Johnson. The Motley Fool has positions in and recommends Abbott Laboratories and Kenvue. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.