When the stock market drops in value, high quality dividend stocks that are less sensitive to the broader economy tend to significantly outperform.
This means that your performance will also suffer but less than the overall market.
A second issue is that large caps with a big footprint in its industry and healthy financial ratios will perform better in stormy times. Smaller and riskier positioned competitors will be thrown out of the market.
That's why most recession will make market leaders often bigger and stronger.
Companies that consistently raise their dividends tend to be very healthy businesses with long-lasting competitive advantages.
Dividend investors like to look for these stocks in the dividend aristocrats list and the dividend kings list, which contain high quality dividend stocks that collectively outperformed during the last recession and have raised their payouts for at least 25 and 50 consecutive years, respectively.
Attached you will find 9 of the currently most attractive stocks which could grow bigger during a market downturn or a recession.
Here are the ideas...
Flowers Foods -- Yield: 3.38%
Flowers Foods (NYSE:FLO) employs 10,900 people, generates revenue of $3,778.50 million and has a net income of $189.19 million. The current market capitalization stands at $3.66 billion.Flowers Foods’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $433.85 million. The EBITDA margin is 11.48% (the operating margin is 7.88% and the net profit margin 5.01%).
Financials: The total debt represents 35.58% of Flowers Foods assets and the total debt in relation to the equity amounts to 82.59%. Due to the financial situation, a return on equity of 15.99% was realized by Flowers Foods.
Twelve trailing months earnings per share reached a value of $0.89. Last fiscal year, Flowers Foods paid $0.57 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.27, the P/S ratio is 0.96 and the P/B ratio is finally 2.93. The dividend yield amounts to 3.38%.
Stock Charts:
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| Long-Term Stock Price Chart of Flowers Foods (FLO) |
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| Long-Term Dividend Payment History of Flowers Foods (FLO) |
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| Long-Term Dividend Yield History of Flowers Foods (FLO) |
Procter & Gamble -- Yield: 3.21%
Procter & Gamble (NYSE:PG) employs 110,000 people, generates revenue of $76,279.00 million and has a net income of $8,930.00 million. The current market capitalization stands at $226.53 billion.Procter & Gamble’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $15,979.00 million. The EBITDA margin is 20.95% (the operating margin is 15.46% and the net profit margin 11.71%).
Financials: The total debt represents 23.43% of Procter & Gamble assets and the total debt in relation to the equity amounts to 48.62%. Due to the financial situation, a return on equity of 13.23% was realized by Procter & Gamble.
Twelve trailing months earnings per share reached a value of $3.03. Last fiscal year, Procter & Gamble paid $2.59 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 27.24, the P/S ratio is 2.93 and the P/B ratio is finally 3.65. The dividend yield amounts to 3.21%.
Stock Charts:
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| Long-Term Stock Price Chart of Procter & Gamble (PG) |
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| Long-Term Dividend Payment History of Procter & Gamble (PG) |
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| Long-Term Dividend Yield History of Procter & Gamble (PG) |
Wal-Mart Stores -- Yield: 3.02%
Wal-Mart Stores (NYSE:WMT) employs 2,200,000 people, generates revenue of $482,130.00 million and has a net income of $15,080.00 million. The current market capitalization stands at $207.98 billion.Wal-Mart Stores’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $33,559.00 million. The EBITDA margin is 6.96% (the operating margin is 5.00% and the net profit margin 3.13%).
Financials: The total debt represents 25.07% of Wal-Mart Stores assets and the total debt in relation to the equity amounts to 62.12%. Due to the financial situation, a return on equity of 18.15% was realized by Wal-Mart Stores.
Twelve trailing months earnings per share reached a value of $4.56. Last fiscal year, Wal-Mart Stores paid $1.96 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 14.29, the P/S ratio is 0.44 and the P/B ratio is finally 2.64. The dividend yield amounts to 3.02%.
Stock Charts:
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| Long-Term Stock Price Chart of Wal-Mart Stores (WMT) |
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| Long-Term Dividend Payment History of Wal-Mart Stores (WMT) |
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| Long-Term Dividend Yield History of Wal-Mart Stores (WMT) |
McDonald's Corporation -- Yield: 3.00%
McDonald's Corporation (NYSE:MCD) employs 420,000 people, generates revenue of $25,413.00 million and has a net income of $4,529.30 million. The current market capitalization stands at $104.56 billion.McDonald's Corporation’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $8,871.70 million. The EBITDA margin is 34.91% (the operating margin is 28.12% and the net profit margin 17.82%).
Financials: The total debt represents 63.58% of McDonald's Corporation assets and the total debt in relation to the equity amounts to 340.33%. Due to the financial situation, a return on equity of 45.43% was realized by McDonald's Corporation.
Twelve trailing months earnings per share reached a value of $4.81. Last fiscal year, McDonald's Corporation paid $3.44 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.20, the P/S ratio is 4.20 and the P/B ratio is finally 15.16. The dividend yield amounts to 3.00%.
Stock Charts:
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| Long-Term Stock Price Chart of McDonald's Corporation (MCD) |
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| Long-Term Dividend Payment History of McDonald's Corporation (MCD) |
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| Long-Term Dividend Yield History of McDonald's Corporation (MCD) |
General Mills -- Yield: 2.96%
General Mills (NYSE:GIS) employs 42,000 people, generates revenue of $17,630.30 million and has a net income of $1,175.10 million. The current market capitalization stands at $35.23 billion.General Mills’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $3,417.80 million. The EBITDA margin is 19.39% (the operating margin is 11.78% and the net profit margin 6.67%).
Financials: The total debt represents 41.91% of General Mills assets and the total debt in relation to the equity amounts to 183.95%. Due to the financial situation, a return on equity of 21.18% was realized by General Mills.
Twelve trailing months earnings per share reached a value of $2.42. Last fiscal year, General Mills paid $1.67 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 24.46, the P/S ratio is 2.00 and the P/B ratio is finally 7.13. The dividend yield amounts to 2.96%.
Stock Charts:
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| Long-Term Stock Price Chart of General Mills (GIS) |
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| Long-Term Dividend Payment History of General Mills (GIS) |
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| Long-Term Dividend Yield History of General Mills (GIS) |
Johnson & Johnson -- Yield: 2.80%
Johnson & Johnson (NYSE:JNJ) employs 127,100 people, generates revenue of $70,074.00 million and has a net income of $15,409.00 million. The current market capitalization stands at $291.48 billion.Johnson & Johnson’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $24,922.00 million. The EBITDA margin is 35.57% (the operating margin is 27.39% and the net profit margin 21.99%).
Financials: The total debt represents 14.89% of Johnson & Johnson assets and the total debt in relation to the equity amounts to 27.91%. Due to the financial situation, a return on equity of 21.87% was realized by Johnson & Johnson.
Twelve trailing months earnings per share reached a value of $5.48. Last fiscal year, Johnson & Johnson paid $2.95 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 19.31, the P/S ratio is 4.22 and the P/B ratio is finally 4.14. The dividend yield amounts to 2.80%.
Stock Charts:
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| Long-Term Stock Price Chart of Johnson & Johnson (JNJ) |
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| Long-Term Dividend Payment History of Johnson & Johnson (JNJ) |
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| Long-Term Dividend Yield History of Johnson & Johnson (JNJ) |
Kellogg Company -- Yield: 2.66%
Kellogg Company (NYSE:K) employs 29,790 people, generates revenue of $13,525.00 million and has a net income of $614.00 million. The current market capitalization stands at $26.42 billion.Kellogg Company’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2,384.00 million. The EBITDA margin is 17.63% (the operating margin is 8.07% and the net profit margin 4.54%).
Financials: The total debt represents 50.83% of Kellogg Company assets and the total debt in relation to the equity amounts to 364.61%. Due to the financial situation, a return on equity of 24.97% was realized by Kellogg Company.
Twelve trailing months earnings per share reached a value of $1.72. Last fiscal year, Kellogg Company paid $1.98 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 43.22, the P/S ratio is 1.94 and the P/B ratio is finally 12.35. The dividend yield amounts to 2.66%.
Stock Charts:
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| Long-Term Stock Price Chart of Kellogg Company (K) |
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| Long-Term Dividend Payment History of Kellogg Company (K) |
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| Long-Term Dividend Yield History of Kellogg Company (K) |
Automatic Data Processing -- Yield: 2.48%
Automatic Data Processing (NASDAQ:ADP) employs 55,000 people, generates revenue of $10,938.50 million and has a net income of $1,376.50 million. The current market capitalization stands at $38.55 billion.Automatic Data Processing’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $2,291.90 million. The EBITDA margin is 20.95% (the operating margin is 18.42% and the net profit margin 12.58%).
Financials: The total debt represents 0.03% of Automatic Data Processing assets and the total debt in relation to the equity amounts to 0.19%. Due to the financial situation, a return on equity of 23.98% was realized by Automatic Data Processing.
Twelve trailing months earnings per share reached a value of $3.04. Last fiscal year, Automatic Data Processing paid $1.95 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 28.05, the P/S ratio is 3.58 and the P/B ratio is finally 8.31. The dividend yield amounts to 2.48%.
Stock Charts:
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| Long-Term Stock Price Chart of Automatic Data Processing (ADP) |
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| Long-Term Dividend Payment History of Automatic Data Processing (ADP) |
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| Long-Term Dividend Yield History of Automatic Data Processing (ADP) |
Clorox -- Yield: 2.44%
Clorox (NYSE:CLX) employs 7,700 people, generates revenue of $5,655.00 million and has a net income of $606.00 million. The current market capitalization stands at $16.26 billion.Clorox’s earnings before interest, taxes, depreciation and amortization (EBITDA) amounts to $1,186.00 million. The EBITDA margin is 20.97% (the operating margin is 16.29% and the net profit margin 10.72%).
Financials: The total debt represents 52.62% of Clorox assets and the total debt in relation to the equity amounts to 1,856.78%. Due to the financial situation, a return on equity of 445.59% was realized by Clorox.
Twelve trailing months earnings per share reached a value of $4.97. Last fiscal year, Clorox paid $2.99 in the form of dividends to shareholders.
Market Valuation: Here are the price ratios of the company: The P/E ratio is 25.13, the P/S ratio is 2.89 and the P/B ratio is finally 137.40. The dividend yield amounts to 2.44%.
Stock Charts:
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| Long-Term Stock Price Chart of Clorox (CLX) |
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| Long-Term Dividend Payment History of Clorox (CLX) |
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| Long-Term Dividend Yield History of Clorox (CLX) |