With market volatility continuing to test investor resolve amid uncertain economic policies and geopolitical tensions, identifying companies with durable competitive advantages has become increasingly crucial. Recent UBS analysis highlights several stocks with consistent profitability and lower volatility profiles that may provide shelter during these turbulent times.
Let’s examine three standout opportunities that combine defensive characteristics with compelling long-term potential:
McDonald’s Corp (MCD)
McDonald’s remains a cornerstone defensive play with remarkable consistency in its financial performance. The fast-food giant’s cash flow return on investment (CFROI) profile has maintained remarkable stability over the past 15 years, hovering around 10% before reaching an all-time high of 13.4% in 2024.
What makes McDonald’s particularly attractive in the current environment is its pricing power and ability to pass inflation costs to consumers while maintaining traffic. The company’s recently launched “Ready on Arrival” initiative, which uses geolocation technology to prepare orders as customers approach, demonstrates its continued focus on operational efficiency and customer experience enhancement.
The company’s franchise-heavy business model generates substantial free cash flow with minimal capital requirements, allowing for generous shareholder returns. McDonald’s recently increased its quarterly dividend to $1.67 per share, marking its 47th consecutive year of dividend increases and cementing its status as a dividend aristocrat.
While same-store sales growth has moderated after the post-pandemic surge, McDonald’s extensive global footprint and ongoing menu innovation provide multiple avenues for sustained growth even as consumer spending tightens.
Philip Morris International Inc (PM)
Philip Morris has been one of the market’s surprise performers, surging nearly 69% over the past year with a remarkable 28% gain in 2025 alone. The tobacco giant’s transformation toward smoke-free products is clearly resonating with both consumers and investors.
The company’s fourth-quarter results exceeded expectations, driven primarily by the explosive growth of its Zyn nicotine pouches. The FDA’s January decision to allow Zyn to remain on the market provided significant regulatory clarity and removed a major overhang on the stock.
PM’s IQOS heated tobacco system continues to gain global market share, with particularly strong adoption rates in European and Asian markets. The company now derives over 35% of its revenue from smoke-free products, putting it ahead of schedule on its target to generate more than 50% of net revenues from smoke-free products by 2025.
For income-focused investors, Philip Morris offers an attractive dividend yield of approximately 4.7%, substantially above market averages. The company’s pricing power in traditional cigarettes continues to provide the cash flow needed to fund both its dividend and its substantial R&D investments in reduced-risk products.
Thermo Fisher Scientific Inc (TMO)
Despite a challenging 12 months that saw the stock decline 10%, Thermo Fisher remains a cornerstone holding for life sciences investors. The company’s diverse portfolio spanning analytical instruments, laboratory equipment, diagnostics, and contract research services provides exposure to multiple growth vectors within healthcare.
Bernstein’s recent upgrade to outperform highlights Thermo Fisher’s competitive advantages, particularly its unmatched cross-selling capabilities across its extensive product portfolio. This commercial execution advantage enables the company to capture a larger share of customer spending than any of its competitors.
The company’s recent acquisition of Olink Proteomics for $3.1 billion strengthens its position in the rapidly growing proteomics market. This strategic move enhances Thermo Fisher’s capabilities in precision medicine and biomarker discovery, areas expected to experience substantial growth as healthcare becomes increasingly personalized.
While the stock has underperformed recently due to a post-COVID normalization in certain business segments, analysts see significant upside potential with price targets indicating possible appreciation of over 25%. The company’s consistent innovation, M&A discipline, and strong leadership team position it well for long-term outperformance as healthcare research spending continues to grow.
These three companies represent different sectors but share crucial characteristics: durable competitive advantages, steady cash flow generation, and the ability to navigate challenging economic environments. For investors seeking to maintain market exposure while mitigating downside risk, these stocks warrant serious consideration as potential portfolio anchors amid continuing market uncertainty.
