8 Dividend Aristocrat Stocks to Buy Now With a Recession (and Inflation) Looming Large in 2024

We follow the bond market closely at 24/7 Wall St., and for almost a year now there has been an inversion (or difference in yield) between the two-year Treasury paper and the benchmark 10-year note. History has shown every time this has happened that a recession is on the way. The interesting aspect is that an inversion can stay in place for up to a year or more before the recession shows up. Reuters pointed out back in July that this yield curve has inverted six to 24 months before each recession since 1955, citing a 2018 report by researchers at the San Francisco Federal Reserve, offering only one false signal in that time. The spread between two-year and 10-year Treasuries has been inverted since last July, so we are well past the one-year mark.

The recession could come early next year, and it is likely the first quarter could be the start when gross domestic product (GDP) turns negative. A recession by definition is two consecutive quarters of negative GDP. While we had a mild and short-lived recession during the COVID-19 pandemic and lockdown, many feel that what is coming could be deeper and last longer.

With the potential for massive downside still looming, and interest rates possibly going even higher, we thought it would be a good idea to look for companies in the Dividend Aristocrats that pay among the biggest dividends in the sectors that typically do well during a recession.

Consumer staples, health care, and utilities tend to fare better during recessionary periods as they provide, in many cases, essential items and services that people depend on regardless of economic conditions. We screened the Dividend Aristocrats and found eight top companies that fit the bill in a big way.

The 67 companies that made the cut for the 2023 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 mandatory for membership on the aristocrats list:

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

While the following stocks are rated Buy across Wall Street, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Consumer Staples

Coca-Cola

This stock not only offers safety but comes with an incredibly strong worldwide brand with 40% overseas sales. Coca-Cola Co. (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. It remains a top Buffet holding, as he owns a massive 400 million shares.

Led by Coca-Cola, one of America’s most trusted food and drink brands, the company’s portfolio features 20 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia and Del Valle. Globally, it is the number one provider of sparkling beverages, ready-to-drink coffees and juices and juice drinks.

Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy Coca-Cola beverages at a rate of more than 1.9 billion servings a day. Also remember that the company also owns 16.7% of Monster Beverage, which continues to deliver big numbers.

Investors receive a 3.10% dividend. Citigroup has a $74 target price on Coca-Cola stock. The consensus target is $69.97. The closing price on Wednesday was $58.78 per share.