In this article, we discuss 5 recession-proof dividend stocks to buy. If you want to read our detailed analysis of the stock market and its performance during recession, go directly to read 10 Recession-Proof Dividend Stocks to Buy.
5. Bristol-Myers Squibb Company (NYSE:BMY)
Dividend Yield as of May 23: 2.84%
Number of Hedge Fund Holders: 66
Bristol-Myers Squibb Company (NYSE:BMY) is an American multinational pharmaceutical company and one of the world’s largest pharmaceutical corporations. As the healthcare sector remains somehow immune to the financial crisis, investors always tend to invest in healthcare companies.
Bristol-Myers Squibb Company (NYSE:BMY) presented solid Q1 2022 results, posting an EPS of $1.96, beating analysts’ consensus by $0.07. The company’s revenue for the quarter stood at $11.6 billion, showing a 4.8% growth from the previous year. Bristol-Myers Squibb Company (NYSE:BMY) delivered a 13.2% return to shareholders, while its 5-year returns came in at 41.1%, as of the market close on May 23.
In Q1 2022, Two Sigma Advisors held the largest stake in Bristol-Myers Squibb Company (NYSE:BMY), worth $318.4 million. On the whole, 66 hedge funds tracked by Insider Monkey reported owning stakes in the company in Q4 2021, down from 74 in the previous quarter. These stakes hold a consolidated value of over $3.3 billion.
In 2021, Bristol-Myers Squibb Company (NYSE:BMY) announced a 10% hike in its annual dividend, paying a quarterly dividend of $0.54 per share. This marked the company’s 16th annual dividend increase. The stock’s dividend yield came to be recorded at 2.84% on May 23.
In May, Wells Fargo lifted its price target on Bristol-Myers Squibb Company (NYSE:BMY) to $70, with an Equal Weight rating on the shares.
Saturna Capital mentioned Bristol-Myers Squibb Company (NYSE:BMY) in its Q4 2021 investor letter. Here is what the firm has to say:
“Given the likelihood of rising inflation and interest rates ahead, we anticipate adjustments to the portfolio to reduce exposure to highly valued stocks dependent on low interest rates to support terminal year valuations, while seeking investments in companies more correlated with a return to economic normalcy. We sold our positions in Bristol Myers. We believe there are better opportunities than Bristol in pharmaceuticals.”
4. Williams-Sonoma, Inc. (NYSE:WSM)
Dividend Yield as of May 23: 2.88%
Number of Hedge Fund Holders: 40
Williams-Sonoma, Inc. (NYSE:WSM) is a California-based consumer retail company that specializes in kitchenware and home furnishing. The company pays a quarterly dividend of $0.78 per share, after a 10% increase in its annual dividend in March. It has been raising its dividends consecutively for 16 years, with a five-year dividend CAGR of 11.9%, coming through as one of the most reliable recession-proof dividend stocks. The stock’s dividend yield, as of May 23, stood at 2.88%.
In its fiscal Q1 2022 results, Williams-Sonoma, Inc. (NYSE:WSM) posted an EPS of $5.42, beating consensus by $0.60. The company’s revenue for the quarter presented a 9.2% year-over-year growth to $2.5 billion. Acknowledging the company’s strong quarterly results, in April, Barclays set a $186 price target on Williams-Sonoma, Inc. (NYSE:WSM), while keeping an Overweight rating on the shares.
As per Insider Monkey’s Q4 2021 database, 40 hedge funds held stakes in Williams-Sonoma, Inc. (NYSE:WSM), up from 31 in the previous quarter. These stakes hold a consolidated value of over $646.7 million.
Headwaters Capital mentioned Williams-Sonoma, Inc. (NYSE:WSM) in its Q1 2022 investor letter. Here is what the firm has to say:
“We recently established a new position in Williams-Sonoma, Inc. (NYSE:WSM) the owner of Williams Sonoma, Pottery Barn, West Elm, Rejuvenation and Mark & Graham stores. The company serves the high-end consumer with affordable-luxury home décor items. Sales are correlated with the strength of the housing market, and the stock is currently “on sale” because of fears that the rise in interest rates will kill U.S. housing. In Williams-Sonoma, we see a very strong company that has successfully adapted its business to selling items online, that occupies a unique place in the consumer mind (rivaled only by RH), is generating record returns on invested capital, trading at less than 10x free cash flow, and aggressively repurchasing shares. We can’t predict home sales over the next twelve months with any confidence, but we are convinced that Williams-Sonoma, Inc. (WSM) has a bright future.”
3. UGI Corporation (NYSE:UGI)
Dividend Yield as of May 23: 3.56%
Number of Hedge Fund Holders: 31
UGI Corporation (NYSE:UGI) is an American natural gas company that distributes and markets energy products and services. The utility sector usually remains stable during an economic downturn as demand for water, electricity, and natural gas tends to remain consistent in these times.
UGI Corporation (NYSE:UGI) has paid common dividends to shareholders consistently to shareholders for the past 138 years, while maintaining a dividend growth streak for 35 years. The company recently announced a 4.3% hike in its annual dividend, which takes its quarterly dividend to $0.36 per share. As of May 23, the stock’s dividend yield was recorded at 3.56%.
In its recent quarterly results, UGI Corporation (NYSE:UGI) posted an EPS of $1.91, beating the estimates by $0.07. In the past month, UGI Corporation (NYSE:UGI) delivered an 11.55% return to shareholders, as of the market close on May 23.
The number of hedge funds tracked by Insider Monkey holding stakes in UGI Corporation (NYSE:UGI) increased in Q4 2021 to 31 from 20 in the previous quarter. These stakes hold a consolidated value of over $167.2 million, up from $128.5 million in Q3 2021. First Eagle Investment Management held the largest stake in the company in Q1 2022, worth $310.8 million.
2. 3M Company (NYSE:MMM)
Dividend Yield as of May 23: 4.14%
Number of Hedge Fund Holders: 41
3M Company (NYSE:MMM) is an American multinational company that manufactures products for a wide range of industries, such as healthcare and consumer goods. In Q4 2021, the company suffered a decline in hedge fund interest, as 41 hedge funds tracked by Insider Monkey held stakes in the company, down from 46 in the previous quarter. The total value of these stakes is over $1.56 billion.
In February, 3M Company (NYSE:MMM) announced a 63rd consecutive annual dividend hike, taking the quarterly dividend to $1.49 per share. In the past five years, the company’s dividend CAGR stood at 5.38%, making it one of the most reliable recession-proof dividend stocks. The stock’s dividend yield, as of May 23, stood at 4.14%. During the past decade, 3M Company (NYSE:MMM) has returned over 121% of reported net income to shareholders through dividends and share repurchases, signaling the financial strength of the company.
On April 26, 3M Company (NYSE:MMM) announced its Q1 2022 results, posting a revenue of $8.8 billion, which beat analysts’ expectations by $50 million. Moreover, the company’s EPS of $2.65 also surpassed the market consensus by $0.34. Though the company incurred losses during the financial crisis of 2008, the earnings recovered quickly in 2010 and presented a 27% growth from 2009 levels.
Though Citigroup expressed concerns regarding the supply chain issues, the firm remained positive on the solid quarterly earnings of 3M Company (NYSE:MMM) and set a price target of $151 on the stock, with a Neutral rating on the shares.
1. Leggett & Platt, Incorporated (NYSE:LEG)
Dividend Yield as of May 23: 4.76%
Number of Hedge Fund Holders: 21
Leggett & Platt, Incorporated (NYSE:LEG) is an American manufacturing company that designs and produces various home and automobile-related products. In Q1 2022, the company posted an EPS of $0.79, beating analysts’ consensus by $0.23. The company proved its strength during the period of financial uncertainty, as its EPS grew by 14% annually between 2009 and 2019.
In May, the company announced a 5% increase in its annual dividend to $0.44 per share, with a dividend yield of 4.76%, as recorded on May 23. This was the company’s 51st consecutive annual dividend increase. Moreover, Leggett & Platt, Incorporated (NYSE:LEG) has increased its dividend at a CAGR of 7% since 1999, making it one of the best recession-proof dividend stocks. This April, Piper Sandler set a $38 price target on Leggett & Platt, Incorporated (NYSE:LEG), with a Neutral rating on the shares.
According to Insider Monkey’s Q4 2021 database, 21 hedge funds held stakes in Leggett & Platt, Incorporated (NYSE:LEG), up from 16 in the previous quarter. The collective value of these stakes is over $136.7 million, compared to $56.1 million in Q3 2021.
You can also take a look at 10 Value Stocks Hedge Funds Like in 2022 and 10 Dividend Stocks Warren Buffett is Backing in 2022.
