In this article, we highlight 11 top recession dividend stocks that investors may consider buying. The US economy has shown growth, leading experts to be optimistic about the economic outlook, with data suggesting that recessions are becoming less frequent. Industries like healthcare, utilities, consumer staples, and telecommunications are considered less vulnerable to economic shifts, making them reliable choices during a recession.
Investors often turn to dividend stocks during uncertain economic times, as these stocks not only provide dividends but also tend to perform well during recessions. For example, the consumer staples sector outperformed the market by 49% over a 25-year period, with a significant portion of this outperformance observed during recessionary periods.
After the major recession of 2008, investors recognized the reliability of dividend stocks in navigating economic downturns. The S&P 500 Dividend Aristocrats Index, which tracks some of the best dividend stocks that have increased payouts for at least 25 years, showed significant outperformance compared to the broader market during both the recovery and recessionary phases of the 2001 and 2008 recessions.
Some of the best recession dividend stocks to consider include companies like The Procter & Gamble Company, Colgate-Palmolive Company, and PepsiCo, Inc., which have a history of dividend growth and strong balance sheets. Insider Monkey used data from hedge funds to identify 11 top dividend stocks from industries known to be recession-proof, such as healthcare, consumer staples, telecommunications, and utilities, that have consistently increased their payouts for over 10 years.
Companies like Kimberly-Clark Corporation, Colgate-Palmolive Company, Becton, Dickinson and Company, The Coca-Cola Company, Verizon Communications Inc., and Abbott Laboratories are among the best dividend stocks for a recession, with strong track records of dividend growth and resilience during economic downturns. These companies have attracted interest from hedge fund investors and offer attractive dividend yields, making them appealing choices for investors seeking stability during uncertain times.