Top 25 Best Dividend Stocks for Recession: Expert Picks

Are you prepared to safeguard your investments during a recession with the best dividend stocks?

In times of economic uncertainty, safeguarding your investments becomes paramount. With the looming threat of a recession, strategic planning is crucial to weather the storm. 

This begs the question: Are you equipped with the knowledge of the best dividend stocks that can potentially provide stability and growth during turbulent times? 

In this article, we’ll delve into the realm of dividend stocks, exploring which ones stand resilient amidst market downturns and offer reliable income streams for investors.

Enterprise Products Partners

With a robust dividend yield of 6.90% and a manageable payout ratio of 78.57%, Enterprise Products Partners stands out as a reliable choice. Known for its stability in energy infrastructure, this company offers investors a steady income stream even during economic downturns.

>> Enterprise Products Partners Dividend History

Realty Income

Offering a generous dividend yield of 5.91%, Realty Income is a staple in dividend portfolios. Despite a seemingly high payout ratio of 242.78%, its status as a Real Estate Investment Trust (REIT) ensures consistent returns, making it a resilient choice for recession-proof investing.

>> Realty Income Dividend History

Bristol-Myers Squibb

With a dividend yield of 4.59% and a modest payout ratio of 59.84%, Bristol-Myers Squibb presents a compelling option in the healthcare sector. Its strong position in pharmaceuticals makes it a defensive play during economic downturns.

>> Bristol-Myers Squibb Dividend History

Duke Energy

Duke Energy offers investors a dividend yield of 4.38% with a manageable payout ratio of 75.89%. As a leading utility company, Duke Energy’s stable cash flows and essential services make it an attractive choice for recession-resistant portfolios.

>> Duke Energy Dividend History

WEC Energy

WEC Energy boasts a dividend yield of 4.25% and a reasonable payout ratio of 73.93%. As a provider of regulated natural gas and electricity, WEC Energy offers investors stability and reliability, making it an appealing option in uncertain economic times.

>> WEC Energy Dividend History

Public Storage

Despite a relatively high payout ratio of 108.50%, Public Storage’s dividend yield of 4.36% remains enticing. As a real estate investment trust specializing in self-storage facilities, its recession-resistant business model provides investors with consistent income potential.

>> Public Storage Dividend History

Chevron

Chevron offers investors a dividend yield of 4.17% and a modest payout ratio of 53.17%. With its strong presence in the energy sector, Chevron’s diversified operations and prudent financial management make it a dependable choice for dividend-seeking investors.

>> Chevron Dividend History

Flowers Foods

Flowers Foods provides a dividend yield of 3.95%, albeit with a higher payout ratio of 156.90%. As a leading producer of bakery products, its defensive characteristics and stable demand for essential food items make it an attractive option for investors during economic downturns.

>> Flowers Foods Dividend History

Kimberly Clark

Kimberly Clark boasts a dividend yield of 3.87% and a manageable payout ratio of 90.60%. As a manufacturer of essential consumer products such as tissues and personal care items, Kimberly Clark’s defensive nature makes it a reliable choice for dividend investors seeking stability.

>> Kimberly Clark Dividend History

Consolidated Edison

With a dividend yield of 3.75% and a conservative payout ratio of 44.94%, Consolidated Edison is a dependable utility stock. As a provider of electricity, gas, and steam to customers in New York, its essential services ensure consistent cash flows, making it a resilient choice for recession-resistant portfolios.

>> Consolidated Edison Dividend History

General Mills

General Mills offers a dividend yield of 3.45% with a moderate payout ratio of 52.98%. As a leading consumer foods company, General Mills boasts a diverse portfolio of popular brands, making it a stable choice for dividend investors seeking resilience in uncertain economic climates.

>> General Mills Dividend History

Exxon Mobil

With a dividend yield of 3.31% and a conservative payout ratio of 41.39%, Exxon Mobil remains a stalwart in the energy sector. Its integrated operations and global presence contribute to its stability, appealing to investors looking for consistent returns.

>> Exxon Mobil Dividend History

PepsiCo

PepsiCo presents investors with a dividend yield of 2.93% and a reasonable payout ratio of 75.38%. As a diversified food and beverage giant, PepsiCo’s well-known brands and global reach offer stability, making it an attractive choice for dividend-focused portfolios.

>> PepsiCo Dividend History

Coca-Cola

Coca-Cola boasts a dividend yield of 3.20% and a manageable payout ratio of 74.49%. With its iconic brand and dominant position in the beverage industry, Coca-Cola remains a reliable choice for dividend-seeking investors seeking stability and consistent returns.

>> Coca-Cola Dividend History

Johnson & Johnson

Johnson & Johnson offers a dividend yield of 3.06% alongside a payout ratio of 90.38%. As a healthcare conglomerate with a diverse product portfolio, Johnson & Johnson’s defensive qualities make it an appealing option for investors seeking stability and income generation.

>> Johnson & Johnson Dividend History

Lockheed Martin

Lockheed Martin provides investors with a dividend yield of 2.83% and a conservative payout ratio of 44.10%. As a leading aerospace and defense company, Lockheed Martin’s government contracts and technological innovations contribute to its stability and long-term growth potential.

>> Lockheed Martin Dividend History

Genuine Parts

Genuine Parts boasts a dividend yield of 2.62% and a modest payout ratio of 40.73%. As a distributor of automotive and industrial replacement parts, Genuine Parts’ essential services and diverse customer base contribute to its resilience and attractiveness for dividend investors.

>> Genuine Parts Dividend History

Procter and Gamble

Procter and Gamble offer a dividend yield of 2.36% alongside a payout ratio of 62.57%. With its portfolio of consumer goods brands, Procter and Gamble’s defensive characteristics make it a reliable choice for investors seeking stability and consistent dividends.

>> Procter and Gamble Dividend History

McDonald’s

McDonald’s provides investors with a dividend yield of 2.40% and a reasonable payout ratio of 53.89%. As a global fast-food giant, McDonald’s strong brand recognition and resilient business model make it an attractive option for dividend-focused investors.

>> McDonald’s Dividend History

Colgate Palmolive

Colgate Palmolive presents a dividend yield of 2.25% and a manageable payout ratio of 68.95%. With its focus on personal care and household products, Colgate Palmolive’s defensive qualities and global presence make it a stable choice for dividend investors seeking consistent returns.

>> Colgate Palmolive Dividend History

The J. M. Smucker Company

Despite a notably high payout ratio of 41200.00%, The J. M. Smucker Company offers a respectable dividend yield of 3.43%. As a leading food and beverage company, its diverse product portfolio contributes to its stability despite the seemingly high payout ratio.

>> The J. M. Smucker Company Dividend History

IBM

IBM provides investors with a dividend yield of 3.52% and a manageable payout ratio of 81.35%. As a technology giant with diversified operations, IBM’s focus on innovation and services contributes to its ability to sustain dividends while navigating changing market landscapes.

>> IBM Dividend History

Dollar General

Dollar General boasts a dividend yield of 1.57% and a conservative payout ratio of 31.26%. As a discount retailer with a focus on essential goods, Dollar General’s defensive qualities and consistent performance make it an attractive option for dividend investors seeking stability.

>> Dollar General Dividend History

Target

Target offers investors a dividend yield of 2.55% alongside a reasonable payout ratio of 48.77%. With its strong presence in retail and emphasis on e-commerce, Target’s strategic initiatives and stable cash flows make it a dependable choice for dividend-focused portfolios.

>> Target Dividend History

Booz Allen Hamilton

Booz Allen Hamilton presents a dividend yield of 1.39% and a modest payout ratio of 60.45%. As a leading consulting firm serving government and commercial clients, Booz Allen Hamilton’s diverse revenue streams and strong market position contribute to its ability to sustain dividends over time.

>> Booz Allen Hamilton Dividend History

Are Dividend Stocks for a Recession a Good Investment?

Investing in dividend stocks during a recession can be advantageous for several reasons. Firstly, dividend-paying companies often have stable business models and strong cash flows, which can help weather economic downturns. 

Additionally, dividends provide investors with a source of income, offering a degree of financial security amidst market volatility. However, it’s essential to conduct thorough research and select dividend stocks with sustainable yields and prudent payout ratios to mitigate risks during challenging economic times.

Factors to Consider when Investing in Dividend Stocks for a Recession

When investing in dividend stocks during a recession, it’s crucial to assess several key factors. Firstly, focus on companies with strong fundamentals, including robust balance sheets and consistent cash flows. 

Additionally, consider sectors that are resilient to economic downturns, such as utilities, consumer staples, and healthcare, to ensure the stability of dividend income during challenging times.