Dividends4Life: Recession Proof Dividend Stocks For Income Investors

Recession Proof Dividend Stocks For Income Investors

Posted by D4L | Friday, August 16, 2013 | 0 comments »

A stock's beta measures how much its price tends to fluctuate in line with market indices; higher beta stocks tend to outperform during bull markets, but underperform during recessions when markets tumble. Income investors sometimes avoid many high yield stocks solely because they tend statistically to rise and fall with the overall market, instead preferring names which are less sensitive to economic conditions. It's also common to take into account the size of a company when evaluating its vulnerability to bear markets- better capitalized, more "blue chip" companies tend to be safer in these times. Using data from Fidelity, here are five stocks which pay dividend yields of at least 3%, have a market capitalization of at least $25 billion, and feature beta statistics of 0.3 or lower:

Leading our list is McDonald's (MCD), a common example of a recession proof stock. One popular industry for income or dividend investors is telecommunications. Verizon (VZ) shows why this is the case. Personal products company Kimberly-Clark (KMB), whose brands include Kleenex and Huggies, features a beta of zero- complete independence, in statistical terms, from macro conditions. Another stock meeting our criteria is pharmaceutical company Bristol-Myers Squibb (BMY). As might be expected, several utilities are characterized by high yields and low betas. For example, electric utility Southern (SO).

Source: Seeking Alpha

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