The S&P 500, Dow Jones, and Nasdaq saw their post-election gains erased thanks to on-again off-again tariffs between the U.S. and its closest friends, Canada and Mexico. Investors enjoying the extended bull run and the AI craze for the past couple of years were grimly reminded that everything can turn at a drop of a dime.
Thankfully, the markets always provide ways to earn money even when the sentiment is bearish. Though not completely immune to uncertainty, certain companies that operate in essential and non-cyclical industries tend to be more resilient than those in other industries. Combine that with the promise of dividends, and you will have the makings of a recession-proof portfolio that can provide income as you weather the storm.
So today, let’s look at three dividend stocks to get you through a potential market crash and decide if they deserve a spot in your portfolio.
How I Came Up With The Following Stocks
To get this list, I accessed Barchart’s Stock Screener Tool. Once there, I used the following filters:
- Number of Analysts: 12 and above. This ensures that the stocks appearing on the results are well-covered by Wall Street, giving me more confidence about the picks.
- Current Analyst Rating: 4.5 to 5 (Strong Buy). With this filter and values, I’ll only get the top-rated companies from the market.
- Annual Dividend Yield: Left blank so I can arrange the results based on it.
- Market Sectors: Consumer Staples, Medical, and Utilities. These three industries are non-cyclical, as they offer services that people need regardless of the time of the year or current economic environment.
I got 105 results with these filters, which I then arranged from highest to lowest yields.
I’m pretty happy with the top three representing each industry I selected. So, let’s discuss each of them, starting with number one:
Brookfield Renewable Partners (BEP)
Brookfield Renewable Partners is a global leader in renewable energy, owning and operating hydroelectric, wind, solar, and energy storage assets across five continents. The company also operates platforms for decarbonization solutions, which helps avoid over 250 million tons of carbon annually. The company focuses on sustainable power generation, leveraging long-term contracts to provide stable cash flows and dividend payments.
Brookfield Renewable has notably and consistently increased its dividends for the past few years. Its forward annual dividend is $1.492 per share, translating to an excellent 6.80% yield.
Meanwhile, analysts are bullish with the stock, rating it a strong buy with a 4.53 average score, and a high target price of $34, representing a potential 55% lift based on BEP stock's current trading price. With the current global trajectory of transitioning to clean energy at full swing, buying BEP stock might be your best bet for the long run.
CVS Health Corporation (CVS)
CVS Corporation, now known as CVS Health, is a leading healthcare and retail pharmacy company that operates a nationwide network of pharmacies, health clinics, and insurance services. It provides prescription medications, wellness products, and healthcare solutions through its CVS Pharmacy, MinuteClinic, and Aetna health insurance divisions. The company has more than 9,000 pharmacy locations conveniently accessible to many American populations, giving it excellent exposure to its target market.
CVS currently pays $2.66 annually, reflecting a 4.07% yield based on current prices.
Analysts are bullish on CVS stock over the next twelve months with an average score of 4.57 and a 24% potential upside based on an $81 high target price.
Coca-Cola Company (KO)
Last but not least is the Coca-Cola Company, one of the world's biggest and most prominently known beverage companies. The company has successfully leveraged its global presence to create a stable and profitable business, with strong growth in Q4'24. Net revenues (6%), operating income (19%) and EPS (12%) were all impressive for such a mature company.
Moreover, the company is a Dividend King with 63 years of consecutive increases, making it an excellent candidate for any long-term income portfolio. Coca-Cola currently pays $2.04 annually, reflecting a 2.89% yield.
And, of course, it shouldn't be surprising to say that KO is the highest-rated stock in this list with a 4.86 average score and a high target price of $85 - suggesting a near 21% potential upside over the next twelve months.
Final Thoughts
Regardless of your risk profile, there are appropriate times to be adventurous with your investments. With the way things are heading, this might not be one of those times. So, it’s best to buckle down for a rough market season and protect yourself from the potential impact. Investing in these high-quality dividend stocks can be the first step to a resilient income portfolio. But, as always, don’t neglect to do your research to solidify your decisions. It’s your money, after all.
