2 Dividend Giants to Get You Through The Next Recession

Are you worried about the next recession? No doubt, during times like these, allocating risk assets need careful planning. 

The Fed’s cycle is still in tightening mode - though there are signs that future interest rate increases will be less severe. However, for now, it remains an ongoing process. In short, thanks to supply chain woes and geopolitical tensions being the primary cause of inflation, the Federal Reserve isn’t planning on a 0% increase or decrease soon. 

Some experts would agree this feels like we’re heading toward a recession. Be as it may, investors have withstood similar challenges, and there’s no reason to believe we can’t do it now.

The following two stocks covered in this article will help investors get through the next recession- whenever it happens. And while we can’t say they are recession-proof, they are resistant. 

Johnson & Johnson (JNJ)

Founded in 1886 in New Brunswick, New Jersey, Johnson & Johnson is a global conglomerate that produces health-related products and services. 

It develops pharmaceuticals, medical devices, and packaged goods through numerous subsidiaries, including but not limited to Janssen Pharmaceuticals, Aveeno, and Ethicon Inc.

Today, Johnson & Johnson fulfills its responsibility to the patients, doctors, nurses, the company’s employees, the local and global community, and its stockholders. And the result is  Johnson & Johnson becoming one of the most valuable companies with a market cap exceeding $454 billion. Having been around since Grover Cleveland was president, Johnson & Johnson has withstood numerous economic crises, and analysts believe this company will almost certainly survive a possible recession.

Yesterday, JNJ closed up 0.5% to $173.84. The company pays an annual dividend of $4.52, representing a yield of 2.61%. I wouldn’t blame you if you felt a paltry 2.61% isn’t exciting.  However, those interested in long-term dividend growth will be glad to know that Johnson & Johnson is both a dividend aristocrat and a dividend king since it has increased its dividend annually in the past 60 years. And in the last five years, JNJ has increased its dividend by more than 33%.

Procter & Gamble (PG) 

Besides healthcare companies, it’s logical to assume that companies producing household and personal products can also be recession resistant. So, another other company on the list to survive the possible next recession is Procter & Gamble.

Like Johnson & Johnson, Procter & Gamble is also a multinational corporation providing goods and services to the consumer industry. The company can trace its roots back to 1837 in Cincinnati, Ohio, its current headquarters.

PG operates through five industry-based sectors: 
 

1. Baby, Feminine, and Family Care: provides baby wipes, diapers, paper towels, tissues, toilet paper, and feminine care items.
2. Beauty: offers items for skin care and hair care.
3. Health Care: sells instant diagnostics, vitamins, minerals, and other personal healthcare items, as well as dental and oral care items.
4. Grooming: markets various shaving products, such as female and male blades and razors, and products used before and after shaving.
5. Fabric and Home Care: markets air care, dish care, fabric enhancers, laundry additives, and detergents.

The company has seen a continuous increase in its dividend every year since 1956 (66 consecutive years). This has earned them a place on the coveted Dividend Kings list.

Given the nature of the business, Procter & Gamble produces stable growth for its shareholders. Its stability is attractive to new investors, along with the dividend increase. Incidentally, the company has an annual dividend yield of 2.68%.

Again, the yield is excellent for long-term investors. It’s important to note that the company is a dividend king, as it has increased yearly dividends in the past 66 years.

The stock closed at $136.81, up 0.23% from the previous session. Analysts list the company’s stocks as a strong buy, with a mean-target price of $151.67 representing a potential 10% upside.

Conclusion

Given their industries, investors can rest assured that Johnson & Johnson and Procter & Gamble will likely survive the next recession. 

Analysts agree these corporations offer security to investors as they’ve performed well through similar economic cycles. Not only that, both companies have competitive advantages that make them household staples. Thanks to shareholder-friendly management, the result is that both corporations have increased dividends yearly for over six decades.

But the question is, “Should you invest in these companies?”  The key is finding companies resistant to economic downturns, and these two may be the ones you need to cushion your portfolio against recession. 

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