As warning signs of a potential recession become increasingly prevalent, Wall Street investors should focus on stocks with proven track records of growth, according to Goldman Sachs. In a note to clients on Wednesday, Goldman’s Deep Mehta looked for companies with a strong history of raising revenue each quarter and delivering positive earnings, and where the firm’s analysts expect positive growth on both fronts from here. “While there can be many ways to define quality, we believe a track record of delivering on top and bottom line, is an important indicator,” Mehta wrote. Source: Goldman Sachs “MSFT is among the most resilient earnings growth stories in the technology industry and its strong presence across all layers of the cloud stack (applications, platforms, infrastructure) makes it well positioned to capitalize on a number of long-term secular trends,” Goldman said. Microsoft’s stock has fallen roughly in line with the broader market this year, shedding more than 20%. The stock also has a buy rating from 95% of Wall Street analysts, according to FactSet. A name on the list that has held up better than the broader market this year is PepsiCo . The snack food and beverage company has grown revenue in 18 of the past 20 quarters. “A strong brand portfolio (especially Frito-Lay) and long-term growth opportunities in Beverages should enable sustainable average annual [positive] mid-single-digit organic sales growth (possibly above) and [positive] high single digit FX-neutral EPS growth in the coming years,” Goldman said. One name on the list that has fallen more than the broader market but nonetheless has a solid track record of growing sales is animal health company Zoetis . The stock is also well liked by Wall Street, with buy ratings from 79% of analysts, according to FactSet. — CNBC’s Michael Bloom contributed to this report
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