5 Top Dividend Stocks to Own in a Recession?
March 18, 2020
These Top Dividend Stocks Yield Up to 8%
Officials have locked down San Francisco. Arnold Schwarzenegger remains in isolation with a mini-horse and a donkey. And crowds swarm over six-packs of toilet paper across the country.
Imagine trying to explain these headlines to someone at New Year’s Eve.
And things will likely get worse. The number of coronavirus cases will grow exponentially and bodies will pile up in the hospitals. The Feds will close stores, ban public gatherings, and force people home. We’re all about to become modern-day “Boo” Radleys with Netflix.
All of which means nothing good for business. Analysts project that the U.S. economy could post its largest quarterly contraction in history. Corporate profits look poised to plunge by one-third. Millions of households and businesses could go bankrupt due to the interruption in cash flow.
So what should investors do amid the panic? They could do worse than own top dividend stocks.
The recent stock market crash has turned some of these names into veritable cash cows. And while share prices swing wildly from day to day, top dividend stocks continue to mail checks to investors.
I highlighted three of my favorite names in a recent column. Now I want to add a five more names to the list.
|
Company Name & Ticker |
Market Cap |
Yield |
|
American Tower Corp (NYSE:AMT) |
$100.4 Billion |
1.9% |
|
Crown Castle International Corp. (NYSE:CCI) |
$61.9 Billion |
3.2% |
|
Las Vegas Sands Corp. (NYSE:LVS) |
$30.1 Billion |
8.0% |
|
Consolidated Edison, Inc. (NYSE:ED) |
$30.3 Billion |
3.4% |
|
Hershey Co (NYSE:HSY) |
$20.7 Billion |
2.2% |
(Source: “Google Finance,” last accessed March 17, 2020)
American Tower Corp (NYSE:AMT) and Crown Castle International Corp. (NYSE:CCI) are pretty straightforward to wrap your head around. These partnerships own thousands of cell phone towers across the country, which they lease out to carriers in exchange for monthly payments. And because local communities resist new construction, a shortage of broadcasting sites has allowed these firms to jack up their prices year after year.
This could just be the beginning. Right now, carriers are launching their next generation of mobile technology called “5G.” But in order to roll out the faster service, they will need to invest billions of dollars into beefing up their networks. Much of this spending will involve adding thousands of new broadcasting sites nationwide, which will mean more money for American Tower and Crown Castle. For shareholders, that should translate into ballooning dividend payments in the decade to come.
Las Vegas Sands Corp. (NYSE:LVS) stands as the biggest question mark on the list. The casino owner’s share price is easy to drop because infection fears have hammered the gaming business. But the company’s gambling empire amounts to a collection of “trophy assets.” These will all bounce back once the global economic engine revs up again next fall or winter. In the meantime, investors can scoop up LVS shares at a steep discount and lock in an eight percent yield.
It’s pretty straightforward with Consolidated Edison, Inc. (NYSE:ED): this is an old, stodgy utility company serving millions of customers in New York and New Jersey. They flick the lights on. Investors lock in a 3.4% income stream. An income stream, it’s worth mentioning, that has grown every year since 1975. If the economy plunges into a coronavirus-induced recession, power companies like Consolidated Edison will likely post the most reliable returns around.
Hershey Co (NYSE:HSY) represents the ultimate “Forever Asset.” The company has survived two world wars, the Great Depression, oil embargoes, stagflation, the dotcom bust, and the 2008 financial crisis. All the while, management continued to mail out checks to shareholders. That kind of track record makes me confident that Hershey will survive the coronavirus too.
