6 Stocks That Are Resisting Recession

Street parking favors the driver whose bumper is already battered, since he can shrug off one more dent or scratch. The drivers with shiny fenders must worry more.

Coca-Cola (KO) is looking a bit like that pristine car right now. In a year when S&P 500 profits are expected to plunge 18%, Coke's profit is seen increasing 16%. While the broad market has lost 41% in a year, Coke is down only 28%. And while nine of 10 S&P 500 companies have seen their earnings forecasts trimmed in recent months, Coke's forecasts are improving. Are expectations set too high for the world's largest soft drink seller, or is Coke resistant to a slowdown?

Bet the latter, although shares at their current price seem only a decent deal, and not an outright bargain.

Few companies have better geographic diversification than Coke. It sells product in 200 countries. More than 80% of operating income comes from outside the U.S. Soda volumes are trending lower in North America right now, but brisk sales of Coke Zero are making up for declines. Now sold in 26 countries, Coke Zero is a calorie-free cola that, for the life of me, I can't figure out why I've started drinking. Marketing pros say the product is aimed at young males who tend to associate the word "diet" (as in Diet Coke) with women, so maybe I'm just being manly.

The slowing world-wide economy threatens to switch bottled water drinkers to tap, but again, Coke has products that are bucking the trend. Last year it bought Glaceau, whose VitaminWater and Smartwater are expanding distribution overseas.

Growth isn't blazing, but it doesn't have to be. The Coke recipe starts with 3% to 4% yearly volume increases, which through cost tweaks and economies of scale become 6% to 8% growth in operating profit. Share repurchases turn that into 7% to 9% growth in per-share earnings. Those are averages, of course. Wall Street expects Coke to follow this year's 16% increase with just 3% growth next year.

Shares trade at 14.5 times this year's earnings forecast, a premium to the broad market of about 8%. I'm not sure Coke's growth prospects alone make that price worth paying, but the real reason to own the stock is the dividend. Current yield: 3.3%. That's a touch higher than the broad market's yield, now just 3.0% thanks to a recent rally. And with some companies cutting dividends, Coke's payment seems secure. Debt is negligible. Some banks CDs pay 3%, of course, and they guarantee your principal. But they don't offer potential for gradually increasing payments, which can bring gradually increasing share prices.

Coke turned up on a recent search for companies that are growing their profits and forcing analysts to raise their forecasts. Have a look at some other screen survivors below.