7 'Strong Buy' Dividend Aristocrats Are Safe-Haven Stocks to Own During a Recession

The market received the proverbial haymaker from the Federal Reserve last week, when the central bank raised interest rates by 75 basis points, the largest increase since November of 1994. To add insult to injury, unless the Fed governors and Chair Jay Powell see at least some decline in the staggering inflation, you can count on another 75-basis-point increase in July.

With the market getting absolutely torched last week, the venerable Dow Jones industrials dipped below the 30,000 level, and both the S&P 500 and the Nasdaq are in bear market territory. Many investors are worried, and with good reason. After years of loose money policy, the party is over, and it is time to move assets to safe, dividend-paying companies to ride out the storm. With the potential for a recession increasing, the time to reallocate is now.

Often when income investors look for companies paying big dividends, they are drawn to the Dividend Aristocrats, and with good reason. The 66 companies that made the cut for the 2022 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. But the requirements go even further. The following attributes are also mandatory for membership on the vaunted list:

  • Companies must be in the S&P 500 index.
  • They must be worth at least $3 billion at the time of each quarterly rebalancing.
  • Their average daily volume must be at least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date.

With the potential for massive downside still looming, and interest rates definitely still going higher, we thought it would be a good idea to look for companies on the Dividend Aristocrats list that are in defensive sectors and look poised to do well the rest of 2022.

Seven stocks hit our screens, all of which are Buy rated at top Wall Street firms. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Abbott Laboratories

This is a top pharmaceutical and med-tech stock with very solid growth potential. Abbott Laboratories (NYSE: ABT) manufactures and sells health care products worldwide.

Its Established Pharmaceutical Products segment offers branded generic pharmaceuticals to treat pancreatic exocrine insufficiency; irritable bowel syndrome or biliary spasm; intrahepatic cholestasis or depressive symptoms; gynecological disorders; hormone replacement therapy; dyslipidemia; hypertension; hypothyroidism; Ménière’s disease and vestibular vertigo; pain, fever and inflammation; migraines; anti-infective clarithromycin; cardiovascular and metabolic products; and influenza vaccines, as well as to regulate physiological rhythm of the colon.

The LabsDiagnostic Products segment provides immunoassay and clinical chemistry systems; assays used to screen and/or diagnose cancer, cardiac, drugs of abuse, fertility, infectious diseases and therapeutic drug monitoring; hematology systems and reagents; diagnostic systems and cartridges; instruments to automate the extraction, purification and preparation of DNA and RNA from patient samples, and detects and measures infectious agents; genomic-based tests; informatics and automation solutions; and a suite of informatics tools and professional services.

Abbott Laboratories stock investors receive a 1.83% dividend. Morgan Stanley’s price target is $145, and the consensus target is $139.29. The shares closed most recently at $102.53.

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