Higher for longer interest rates are putting real pressure on weaker borrowers, while lenders are leaning toward companies with steadier cash flows and stronger balance sheets. That shift is creating a clear divide between stocks that can handle tougher credit conditions and those that struggle with rising debt costs. This article focuses on the theme of defensive, cash flow resilient businesses and how they might hold up as credit stress builds. You will see 3 stocks from our Defensive, Cash-Flow Resilient Stocks screener that appear relatively well positioned against the latest credit market risks.

Elevance Health (ELV)

Overview: Elevance Health is a large US health benefits company that provides medical, pharmacy, and related insurance services to individuals, employers, and government programs like Medicare and Medicaid under brands such as Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon. Beyond traditional health plans, it also offers pharmacy benefit management, behavioral health, virtual care, and a wide range of support services that help coordinate and manage patient care.

Operations: Elevance Health generates most of its roughly US$200.4b in revenue from its Health Benefits segment at about US$168.2b, with additional contributions from CarelonRx at about US$43.9b and Carelon Services at about US$29.1b, primarily in the United States.

Market Cap: US$90.4b

With higher interest rates pressuring weaker borrowers, Elevance Health offers something different: a large, non cyclical health insurer with diversified revenue across commercial, Medicare, and Medicaid plans and additional earnings from its Carelon pharmacy and services businesses. Analysts highlight the company’s valuation relative to many healthcare peers and note its ongoing investments in AI and data tools aimed at improving cost control over time. The flip side is real, persistent medical cost pressures, regulatory scrutiny, and elevated funding risk due to reliance on external borrowing, all of which could affect margins if not managed carefully. The full story, including how policy decisions and Elevance’s value based care initiatives may influence this balance, is an important consideration for long term investors.

Elevance Health’s mix of non cyclical insurance and data driven care often looks straightforward, but the real story sits in how its cash flows stack up against rising funding costs in the analysis report for Elevance Health

Village Super Market (VLGE.A)

Overview: Village Super Market operates ShopRite, Fairway, and Gourmet Garage supermarkets and specialty food stores in the United States, selling a broad mix of groceries, prepared foods, and household essentials, alongside private label ranges such as Wholesome Pantry, Bowl & Basket, Paperbird, Fairway, and Gourmet Garage. It also runs online ordering through its branded websites and apps, giving customers multiple ways to shop for everyday staples.

Operations: Village Super Market generates about US$2.4b in revenue from retail sales of food and nonfood products, all in the United States.

Market Cap: US$638m

Village Super Market sits in the consumer staples sector, where supermarket visits and grocery spending are often viewed as more resilient than some more leveraged, discretionary businesses when interest rates are higher. The stock trades at a P/E of 12.2x, which is below the broader retail industry and peer averages. The Simply Wall St cash flow estimate also indicates a higher value than the current share price, which may be of interest to value focused investors. At the same time, net margin has softened to 2.2%, recent earnings have declined slightly, and insider selling plus limited board independence highlight governance and funding risks. The balance between steady cash flows on one hand and thinner profitability and governance considerations on the other is central to the investment case for Village Super Market.

Village Super Market’s relatively low 12.2x P/E and resilient grocery cash flows suggest a story the market may be underrating, and the full tension among valuation, margins, and governance is explored in the analysis report for Village Super Market

Associated British Foods (LSE:ABF)

Overview: Associated British Foods is a diversified group that owns Primark and Penneys in retail and also produces a wide range of grocery products, ingredients, sugar, and agricultural feed, giving it exposure to everyday consumer spending as well as food and farming supply chains.

Operations: ABF generates most of its revenue from Retail at about £9.7b, followed by Grocery at about £4.1b, Ingredients at about £2.2b, Sugar at about £2.1b, Agriculture at about £1.6b, with a small contribution from discontinued Sugar operations and a central cost of £264m.

Market Cap: £14.0b

Associated British Foods offers a mix of grocery and ingredients cash flows alongside the more growth oriented Primark retail chain, which is expanding and rolling out digital initiatives in markets like the US and Europe. The stock trades on a lower P/E than many food peers. At the same time, recent earnings declined, sugar price volatility and the China exit weigh on parts of the business, and dividends have not followed a smooth pattern. ABF’s credit profile and diversified brands may help balance these pressures as higher funding costs affect different borrowers in different ways.

Associated British Foods might have a lower P/E and mixed earnings, but its mix of Primark growth and grocery cash flows could be mispriced. The full risk reward picture is in the analysis report for Associated British Foods

The three stocks covered here are just a starting point, and the full Defensive, Cash-Flow Resilient Stocks screener surfaces 31 more companies with resilient cash flows, strong balance sheet scores, and equally compelling narratives around interest rate exposure and pricing power. Use Simply Wall St to identify, filter, and analyze the specific catalysts and risk factors that matter most so you can focus on the highest conviction defensive ideas without getting lost in noise.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.