5 companies whose profits can grow even without strong economic growth
Waste is collected even in a recession, payrolls are processed every month, and financial data are part of the daily work of investment teams. Five American companies with a reputation for resilient businesses are showing very different results today. What matters is whether their profits really grow without the help of the economy and how much an investor pays for that attribute at current prices.
Key points
Resilient revenue does not automatically mean growing profit. A company can have stable demand and still see its profit stagnate if costs rise faster than prices.
In a slow economy, the main source of growth is pricing power. Volumes in defensive sectors often fall, and the entire organic growth comes from price increases. The thesis therefore stands or falls on whether the company can raise prices above cost inflation.
Recurring revenues protect profitability, but not always growth. Subscriptions and contractual services kept companies profitable in past crises, but profit often stopped growing when customers cut spending or laid off workers.
Independence from GDP does not mean independence from the cycle. Some businesses do not react to economic growth, but are sensitive to specific factors in their industry that can deteriorate even in an otherwise calm economy.
Quality and resilience are usually already paid for in the price. The most stable companies trade at the highest premium. A better ratio of quality to valuation often comes from businesses about whose future the market has doubts.
Investors in periods of slow growth look for companies whose profits do not depend on whether the economy adds two percent or half a percent. The most frequently mentioned candidates include waste management, payroll services, financial data, and auctions of damaged vehicles. The common denominator is recurring demand, high switching costs for customers, and the ability to raise prices.
This article does not take these mechanisms for granted. For each company we break down growth into prices, volumes, acquisitions, and operating efficiency, compare results with periods of previous slowdown, and separately assess three questions: whether it is a quality business, whether its profit can grow even in a weak economy, and whether the stock is attractively valued at today's price.
Copart
How Copart makes money
Copart $CPRT operates online auctions of vehicles that insurers have declared a total loss after an accident, flood, or theft. The company takes over the vehicle, stores it in its own yard, and sells it to buyers from around the world. For fiscal year 2026 (ending July 31), it reported revenue of $4.67 billion, of which roughly 85% was service fees and the rest vehicle sales that Copart had purchased itself, mainly outside the US. International revenue reached $858.8 million, i.e., almost a fifth of the total.
The competitive advantage rests on a combination of three elements. The first is the network of yards, which is difficult to replicate around large cities because of permits and land prices. The second is the global buyer base, which increases realized prices and thus the proceeds for insurers. The third is long-term relationships with insurers that outsource the processing of total losses. The US market is effectively a duopoly, where the second player is IAA, now part of RB Global.
What fiscal year 2026 showed
According to Copart's results for the 4th quarter of fiscal year 2026, full-year revenue grew by only 0.4% and net income fell by 4.4% to $1.48 billion. Diluted EPS decreased from $1.59 to $1.55. Adjusted for extraordinary items, management said revenue grew by 2.4%.
The breakdown of growth is essential for the investment thesis:
Volumes: Global unit sales fell by 5.5%, and in the US by 5.7% in the 4th quarter. The main weakness was volumes from US insurers.
Prices: Revenue per unit grew by 5.7% and the average selling price by 5.5%.
Costs: Operating costs per vehicle in the 4th quarter grew by 12.7%, and operating income for the quarter fell by 10.6%.
International: Revenue in the 4th quarter grew by 11.7% and is the fastest-growing component.
So higher prices offset the volume decline at the revenue level, but not at the profit level. Operating margin has decreased from 39.3% since fiscal year 2022 to 35.4%. Yards have a high proportion of fixed costs, so operating leverage works both ways. Net income was also affected by lower interest income after the company spent $1.63 billion on buybacks.
Why more accidents don't mean higher profit
The supply of vehicles depends on the number of accidents, the number of insured drivers, and especially on the share of vehicles that insurers prefer to write off rather than repair. This share rises when repair costs increase and used car prices fall. Copart itself described this in its fiscal 2009 report, when cheaper used cars led to more total losses but at the same time pushed down selling prices of wrecks.
In the long term, two opposing trends are at work. Driver assistance systems and gradual automation of driving may reduce the number of accidents. Sensors, cameras, and batteries, on the other hand, make repairs significantly more expensive, so even a minor accident can end as a total loss. The net effect on volumes over the next decade cannot be reliably quantified, and an investor should not assume it one way or the other.
The ACV acquisition changes the company's profile
In September 2026, Copart announced the acquisition of digital used car marketplace ACV Auctions for approximately $1.9 billion in cash ($10.50 per share, a premium of about 45%). The company expects the acquisition to be accretive to EPS starting in fiscal year 2028. The tender offer was extended to October 15, 2026, due to completion of antitrust review. With this, Copart enters the dealer-to-dealer segment, which is much more sensitive to the used car cycle than insurance auctions.
Copart is not cyclical in the classic sense, because accidents do not depend on GDP. However, its results are strongly dependent on specific conditions in the insurance and auto markets. Current data do not confirm the thesis of profit growth regardless of the environment.