3 Companies That Could Thrive While the Fed Holds Rates Steady

Key Points

• Visa’s transaction-based model gives it consistent revenue growth without taking direct credit risk.
• Spotify’s subscriber base, margins and free cash flow continue to improve despite mixed post-earnings sentiment.
• UnitedHealth raised its 2026 outlook, reinforcing its defensive profile despite Medicaid and reimbursement pressures.

Though many investors started 2026 assuming that the Federal Reserve would eventually lower interest rates, another trajectory has emerged amid Middle East conflict and renewed inflation concerns: not only has the Fed appeared comfortable keeping interest rates elevated until inflation can be tamped down, but some analysts have even predicted that rate increases could be in store. The Fed kept its benchmark rate in a target range of 3.5% to 3.75% at its July 29 meeting, while three voting members preferred a quarter-point rate increase. Fortunately, some companies have consistent cash flow, strong balance sheets and limited dependence on inexpensive financing. Those traits can matter more when rates remain steady or even increase.

That shifts the focus away from companies waiting for borrowing costs to ease and toward companies that can keep compounding without lower-rate help. Businesses tied to transaction volume, recurring revenue or essential demand are better positioned than those whose growth depends on cheaper financing.

Visa's Execution Continues Despite Interest Rates

Hardly any companies in or adjacent to the financials sector are as insulated from interest rate changes as Visa Inc. NYSE: V. Banks that make loans or take on credit risk are, of course, heavily impacted by these changes; Visa, on the other hand, collects fees from each transaction consumers or businesses make on its payment network.

This transaction fee model has allowed Visa to generate consistent revenue and earnings growth even if the broader economic environment shifts. With the secular shift toward cashless payments worldwide and the growing trend of rising cross-border payment volumes, Visa is a prime beneficiary.

A look at Visa's latest earnings report helps to confirm. For Q3 2026, the company reported strong net revenue growth of 14% year over year (YOY) alongside earnings per share (EPS) growth of 11% over the same period; both topped analyst predictions. This growth was due to impressive payments volume and processed transactions growth of 10% each. What's more, the company has seen a mixture of commercial payments volume improvement, Visa Direct transaction growth, and value-added services revenue increases; it is not relying on a single part of its business to fuel gains.

Visa's excellent financial profile, including robust free cash flow, allows it to pay out a stable dividend while also making aggressive share repurchases and ongoing investments into new technologies to support its growing payments network. This could be why the company has 31 Buy ratings and not a single Sell or Hold, signaling unanimous analyst support.

Spotify Combines Financial Improvement With a Loyal Premium Subscriber Base

Spotify Technology NYSE: SPOT is the dominant music streaming platform, with a market capitalization of close to $100 billion. The company spent years aiming for subscriber growth in favor of profitability, but significant operating efficiency moves have led to improving financials (even as many artists have spoken out against the company's payment practices).

In the company's Q2 2026 earnings report, Spotify highlighted improvements, including 14% YOY revenue growth, a 21% YOY increase in gross profit, and gross margins that rose to 33.4% from 31.5% a year prior. Free cash flow has also climbed, increasing by 14% YOY to 797 million euros (approx. $920 million). A combination of improving profitability and subscriber growth (total monthly active users climbed by 12% YOY) led to these results.

What helps Spotify to thrive despite higher interest rates is the combination of its margin, income, and free cash flow gains alongside its Premium subscriber growth, a sign that customers have generally accepted the company's price increases. Subscription-based models like Spotify's generate predictable recurring revenue, and the company's advertising arm helps offer an additional pathway for longer-term growth as well.

An impressive 20 out of 26 analysts have rated SPOT shares a Buy, and the company has nearly 25% upside potential.

UnitedHealth Stands Out for Stability Despite Medicaid, Reimbursement Hurdles

As one of the most defensive sectors, healthcare has companies that are practically built for high-rate environments. UnitedHealth Group Inc. NYSE: UNH, a major diversified health care company, stands out for its reliability.

As healthcare utilization tends to remain mostly stable throughout economic cycles, a company like UNH can generate steady revenue regardless of interest rate activity. This is not to discount the impact of reimbursement trends, regulatory changes, and other factors, though these elements are often manageable for a company of UNH's size and scope.

This is perhaps why UNH was recently able to raise its full-year 2026 outlook for adjusted EPS and operating earnings even as commercial medical costs remain elevated, and Medicaid remains highly pressured. It could also be why the company retains strong analyst support (22 Buys against five Holds) alongside those external challenges.

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