3 Recession-Proof Dividend Stocks for a Bear Market

The bear market that has roiled stock investors for the past 12 months has renewed focus on safety and quality. That means that investors have once again focused more on stocks that pay reliable dividends, as they tend to offer the best earnings security and recession resilience.

With a potential recession looming in 2023, we look for those dividend stocks with the best chances of continuing to raise their payouts irrespective of economic conditions. We believe it is these companies that will outperform during bear markets.

Below, we highlight three names we like that meet those criteria.

A Dynamic Opportunity

Our first stock is General Dynamics (GD) , an aerospace and defense company that operates worldwide, but is based in the U.S. General Dynamics has four operating segments: Aerospace, Marine Systems, Combat Systems, and Technologies. Through these segments, the company offers a wide variety of military and civilian aviation equipment, as well as cargo and container ships, maintenance services, wheeled and tracked combat vehicles, communications services, intelligence services, and much more.

The company was founded in 1899, produces $39 billion in annual revenue, and trades with a market cap of $68 billion.

General Dynamics sports tremendous recession resilience because much of its revenue is tied to long-term contracts. In addition, those contracts are mostly with governments around the world, and for critical defense products and services, meaning the contracts have a high likelihood of being sustained irrespective of economic conditions. Thus, General Dynamics tends to see fairly stable earnings throughout tough economic periods.

The payout ratio for this year is just over 40% of earnings, which is about where the stock has generally been in the past decade. Given the company’s earnings stability, particularly in recessions, we find the payout to be quite safe here.

The company has raised its dividend for an impressive 31 consecutive years, in no small part due to its recession resilience. The company’s management team has proven…

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