In this article, we discuss 5 best dividend aristocrat stocks to buy heading into recession. If you want to see more stocks in this selection, click 11 Best Dividend Aristocrat Stocks To Buy Heading Into Recession.
5. Chevron Corporation (NYSE:CVX)
Number of Hedge Fund Holders: 59
Dividend Yield as of September 27: 4.03%
Number of Years of Consecutive Dividend Growth: 35
Chevron Corporation (NYSE:CVX) is an American multinational energy corporation. On July 27, the company declared a quarterly dividend of $1.42 per share, in line with previous. The dividend was distributed to shareholders on September 12. Chevron Corporation (NYSE:CVX) is one of the best dividend aristocrat stocks to buy heading into recession. The company has provided consistent annual dividend growth for 35 years.
Piper Sandler analyst Ryan Todd on September 12 raised the price target on Chevron Corporation (NYSE:CVX) to $190 from $189 and kept an Overweight rating on the shares. The analyst remains constructive on the integrated oils, noting that near-record distillate margins will support upside in refining estimates, which will potentially continue into the winter and an “equally tight” 2023.
Among the hedge funds tracked by Insider Monkey, Warren Buffett’s Berkshire Hathaway is the biggest stakeholder of Chevron Corporation (NYSE:CVX), with 161.4 million shares worth $23.3 billion. Overall, 59 hedge funds were long Chevron Corporation (NYSE:CVX) at the end of Q2 2022, compared to 53 funds in the last quarter.
In its Q1 2022 investor letter, Diamond Hill, an asset management firm, highlighted a few stocks and Chevron Corporation (NYSE:CVX) was one of them. Here is what the fund said:
“Other top contributors in Q1 included multinational energy company Chevron Corp. (NYSE:CVX). The company benefited from increased energy demand as COVID-related economic restrictions eased in tandem with concerns regarding supply interruptions related to Russia’s invasion of Ukraine.”
4. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 60
Dividend Yield as of September 27: 3.10%
Number of Years of Consecutive Dividend Growth: 60
The Coca-Cola Company (NYSE:KO) is one of the best dividend stocks to buy heading into recession, given its defensive nature and the 60 consecutive years of dividend increases under its belt. On July 21, The Coca-Cola Company (NYSE:KO) declared a quarterly dividend of $0.44 per share, which is distributable on October 3 to shareholders of record as of September 16. The company delivers a dividend yield of 3.10% as of September 27.
HSBC analyst Carlos Laboy on September 6 raised the price target on The Coca-Cola Company (NYSE:KO) to $76 from $72 and maintained a Buy rating on the shares. The Coca-Cola Company (NYSE:KO) has new revenue drivers in Latin America as it extends its once-exclusive sales and delivery system to other brands, the analyst told investors in a research note.
As of the second quarter of 2022, Ray Dalio’s Bridgewater Associates is a notable stakeholder of The Coca-Cola Company (NYSE:KO), with 10.8 million shares worth about $681 million. Overall, 60 hedge funds were bullish on The Coca-Cola Company (NYSE:KO) at the end of June, compared to 64 funds in the prior quarter.
In its Q2 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and The Coca-Cola Company (NYSE:KO) was one of them. Here is what the fund said:
“Over the last year, we have repositioned our portfolio to navigate the course we see ahead. We added to more defensive areas of the portfolio like consumer staples (The Coca-Cola Company (NYSE:KO)). While the next month or two will likely prove choppy on account of the Omicron variant, we believe that Omicron, like Delta, represents a speed bump on the way to recovery rather than a true change in course. We see strong economic momentum continuing in 2022 and we expect interest rates to rise. After a decade of remarkably low rates, we would not be surprised if this change in direction is accompanied by some fits and starts in the markets. With our emphasis on pricing power, purposeful sector exposure, valuation discipline, and a strong dividend profile, we believe we are well-positioned for the year ahead.”
3. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 65
Dividend Yield as of September 27: 2.77%
Number of Years of Consecutive Dividend Growth: 50
PepsiCo, Inc. (NASDAQ:PEP) is one of the best defensive dividend aristocrat stocks to buy heading into recession. 50 years of back-to-back dividend increases lend PepsiCo, Inc. (NASDAQ:PEP) a lot of credibility as well. On July 21, the company announced a $1.15 per share quarterly dividend. The dividend is payable on September 30, to shareholders of record on September 2. PepsiCo, Inc. (NASDAQ:PEP)’s dividend yield on September 27 came in at 2.77%.
On August 22, Morgan Stanley analyst Dara Mohsenian told investors that he continues to see clear top-line upside at PepsiCo, Inc. (NASDAQ:PEP), which should lead to EPS upside and continued stock outperformance. The analyst maintained an Overweight rating on PepsiCo, Inc. (NASDAQ:PEP).
According to Insider Monkey’s data, 65 hedge funds were long PepsiCo, Inc. (NASDAQ:PEP) at the end of June 2022, compared to 62 funds in the last quarter. Terry Smith’s Fundsmith LLP is the leading stakeholder of the company, with over 7 million shares worth $1.2 billion.
Here is what ClearBridge Large Cap Value ESG Fund has to say about PepsiCo, Inc. (NYSE:PEP) in its Q2 2022 investor letter:
“Also in the stable and predictable cash flow camp, though with a very different business model, global food and beverage company PepsiCo (NYSE:PEP) reported very strong organic growth in the first quarter, driven by healthy price/mix, and raised revenue guidance, while holding EPS guidance. Notably, its beverage business showed expanding margins.”
2. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 67
Dividend Yield as of September 27: 1.72%
Number of Years of Consecutive Dividend Growth: 49
Walmart Inc. (NYSE:WMT), an American multinational retail corporation, is one of the best dividend aristocrat stocks to buy for recession. Demand for Walmart Inc. (NYSE:WMT) products will not falter due to a slower economic cycle, which makes it a safe investment. Walmart Inc. (NYSE:WMT) has consistently paid increasing dividends for the last 49 years. The firm paid out its latest quarterly dividend of $0.56 per share on September 6.
On September 14, KeyBanc analyst Bradley Thomas assumed coverage of Walmart Inc. (NYSE:WMT) with an Overweight rating and a $155 price target, citing “an outlook for defensive growth, market share gains, and margin recovery to normal levels”.
According to Insider Monkey’s data, Walmart Inc. (NYSE:WMT) was part of 67 hedge fund portfolios at the end of the second quarter of 2022, compared to 60 in the prior quarter. Rajiv Jain’s GQG Partners is the leading stakeholder of the company, with 9.8 million shares worth $1.2 billion.
1. Exxon Mobil Corporation (NYSE:XOM)
Number of Hedge Fund Holders: 72
Dividend Yield as of September 27: 4.11%
Number of Years of Consecutive Dividend Growth: 39
Exxon Mobil Corporation (NYSE:XOM), an American multinational energy giant, is one of the top dividend aristocrat stocks to buy heading into recession. 2022 marks the 39th consecutive annual dividend increase by Exxon Mobil Corporation (NYSE:XOM). The company’s latest quarterly dividend of $0.88 per share was paid on September 9. The dividend yield on September 27 stood at 4.11%.
Piper Sandler analyst Ryan Todd on September 12 reaffirmed an Overweight rating on Exxon Mobil Corporation (NYSE:XOM) but lowered the price target on the shares to $108 from $109. The analyst remains constructive on the integrated oils group, citing upside to refining estimates through the winter and into an “equally tight” 2023.
According to Insider Monkey’s Q2 data, 72 hedge funds were long Exxon Mobil Corporation (NYSE:XOM), compared to 83 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is a significant position holder in the company, with 20 million shares worth $1.70 billion.
In its Q2 2022 investor letter, First Eagle Investments, an asset management firm, highlighted a few stocks and Exxon Mobil Corporation (NYSE:XOM) was one of them. Here is what the fund said:
“Integrated oil and gas giant Exxon Mobil Corporation (NYSE:XOM) performed well in the second quarter as continued high prices for energy products supported the stock. As the largest refiner in the US, the company has benefitted from wide “crack spreads,” or the margin between the cost of crude oil and the petroleum products extracted from it. Exxon continues to invest in refining capacity in the US, which industry wide has been in steady decline since 2019. We are pleased that Exxon has been using its strong cash flows to reduce debt and to return cash to shareholders through dividends and stock repurchases.”
You can also take a look at Best Cloud Stocks To Buy and Best Delivery Stocks To Buy.
