The automotive aftermarket business does well even in challenging times because people still have a need to repair their aging vehicles as they break down over time. While Manhattan needs reliable power, the city has experienced several years of population losses as residents seek cheaper options. Regulators have also been less agreeable to raising electricity and gas rates given the city’s high cost of living and already pricey power.
This results in a stable and predictable industry with a slow pace of change – all good things for dividend growth investors worried about the next economic slowdown. Increased fuel efficiency and a shift to electric vehicles could weigh on long-term demand for gasoline. But investors who share our belief that this transition will take place over many years or decades may still find Magellan’s overall risk profile and status as a top high dividend stock attractive. Coupled with Magellan’s modest capital spending needs , the partnership has historically managed to offset higher operating expenses with price increases to protect cash flow. Approximately 30% of the firm’s refined products markets charge regulated tariff rates that track the producer price index for finished goods.
Its intellectual property and relationship with physicians also contribute to its wide moat, says Morningstar’s Wang. NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution’s Terms and Conditions.
PepsiCo is the only stock on the best recession stocks list that has slightly underperformed the S&P 500 over the last decade. PepsiCo has averaged 12.1% annual gains, while the SPDR S&P 500 ETF has averaged 12.6%. CMS’s largest price decline over the last decade was 30%, and the company has outperformed the S&P 500 slightly over the same time frame. Better returns for lower drawdowns are the hallmark of a good recession stock. CMS Energy is a utility company providing electricity and natural gas to consumers in Michigan.
Health care
As this price index rises, the market rates charged across the rest of the business generally face upward pressure, too. Magellan Midstream Partners has paid distributions without interruption since 2001, reflecting the master limited partnership’s conservative financial policies and steady cash flow. The recession-resistant stocks below are ordered by how many consecutive years they have maintained or increased their dividends, starting with the shortest streaks. To learn more about our rating and review methodology and editorial process, check out our guide on how Forbes Advisor rates investing products.
Intuit’s shares took a hit in early November when the company announced that hiring at Credit Karma would be paused to account for a potential softening of the economy. But, like many growing businesses, it doesn’t mean it has stopped hiring altogether. Instead, it will be much more judicious about the job offers it puts out there until it has greater clarity about the economic landscape in 2023. In 2022, EOG paid out a total of $3 in regular quarterly dividends, and an additional $5.80 in special cash dividends, for a total payout of $8.80 a share. «Walmart U.S. continued to gain market share in grocery, helped by unit growth in our food business,» said CEO Doug McMillon stated in WMT’s third-quarter press release.
Beverage companies need to cultivate strong brands to drive high sales volumes of their low-priced products. Repeat business from consumers generates the steady cash flow streams that investors expect from this defensive sector. Dividend-paying sectors like utilities, telecom, and consumer staples are widely considered recession proof. These companies have business performance and sales which are not highly correlated with the larger economic cycle, or in other words, these companies are seen as good investments when the economy goes south. Water, gas and utilities companies are all deemed to be recession proof industries.
Periods of expansion can often last for years before hitting a peak. What follows is a period of contraction — a recession — before the economy enters a trough ahead of the next expansion. Looking at the recession of 2008, Proctor and Gamble hit a high of $74.12 in December 2007 and a low of $45.71 in March 2009, a 38% drop, outperforming the 53% drop in the Dow Jones by 15%.
«We significantly improved our inventory position in Q3, and we’ll continue to make progress as we end the year.» Between December 2007 and June 2009, the Dow Jones stock delivered a total return of 2.5%, considerably higher than the 35% loss for the S&P 500. The company had 5,910 stores in the U.S. as of Sept. 30, along with 28 stores in Mexico under the ORMA banner. In this kind of environment, the companies best-suited to survive, if not thrive, are defensive ones that provide products and services people simply can’t live without.
Best Recession-Proof Dividend Stocks for a 2023 Downturn
Early in the pandemic, funeral homes in New York City were overwhelmed by the number of clients they were dealing with due to this crisis. In 2020, EOG produced 753,800 barrels of oil equivalent per day . In 2022, the company projects production of at least 903,300 MBoed, 9% higher year-over-year. The service provides more than 100,000 items for small and medium-sized businesses. And improving grocery sales are not Walmart’s only area of strength. We’d like to share more about how we work and what drives our day-to-day business.
She is a thought leader in content diversity, equity and inclusion, and finds ways to make every piece of content conversational and accessible to all. In her role at Hallmark, after working as a senior editor on the Mahogany card line, Pamela was promoted to editorial director, and tasked with making the company’s flagship card lineup more inclusive for more consumers. We believe everyone should be able to make financial decisions with confidence. If that sounds like you, you might like to try our online product, which lets you track your portfolio’s income, dividend safety, and more. Following decades of high spending on advertising and innovation, most of the company’s 20-plus billion-dollar brands boast No. 1 or No. 2 positions in their categories.
Historically recession-resistant sectors
Early in January, CEO Chris Kempczinski issued a company-wide memo outlining changes coming to the Golden Arches, including job cuts. These cuts will make the company more efficient and productive as it accelerates restaurant openings. However, the inflationary times we live in suggests McDonald’s remains an excellent defensive play. That’s even more significant because Barron’s only considered profitable companies.
The company reported earnings of $2.59 per share and revenue of $5.9 billion, up 26% and 5% year-over-year, respectively, excluding foreign currency changes. Global same-store sales were up 12% in the final three months of 2022, with double-digit growth seen across all segments. Its free cash flow, which companies use to return capital to shareholders, is expected to be between $1.8 billion and $2.1 billion. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price.
Due to the steep cost of infrastructure required to serve a limited pool of customers, many utility companies are essentially government regulated monopolies in the regions where they operate. Duke’s utilities are no exception, acting as sole suppliers in most of their service territories. High inflation does create a challenge given the number of raw materials PepsiCo needs to make its food and beverages. But the firm’s strong brands and dominant shelf space with retailers have helped PepsiCo raise prices to protect its margins and continue growing earnings.
Food and Beverage
All stocks listed either beat the S&P 500’s total return over the last 10 years or were within 1% of the benchmark index. Volatility is in line with most of the stocks on this list, with the biggest drop in the last 10 years being 30%. The stock has performed better than the S&P 500 over the last decade as well, beating the index by an average of 1.2% per year. PepsiCo is one of the world’s largest beverage and snack companies.