In this article, we will take a look at some of the best dividend stocks for a bear market.
According to Ned Davis Research, the broader market is now less than 3% below its all-time high from February, and only a recession would likely cause a significant pullback. Despite rising tariffs and escalating tensions in the Middle East, the US economy continues to show strength. Earlier this month, the Labor Department reported that 139,000 jobs were added in May, surpassing expectations.
Chief macro strategist of Ned Davis, Joe Kalish, made the following comment:
“A new low would likely require a recession call. The economy is not currently in [a] recession and we do not foresee one in the second half of the year.”
Kalish also noted that US industrial production is now only 0.5% below its record high. While the broader market hasn’t officially entered a bear market, it came close during the peak of concerns over global trade tensions.
During market downturns, investors often shift toward income-generating assets, including certain stocks. They typically seek companies with steady cash flow, a reliable track record of dividend payments, and a presence in essential, everyday industries.
It’s also common for investors to favor businesses with a competitive edge or those that offer more affordable alternatives to higher-priced services in the market. Given this, we will take a look at some of the best dividend stocks for a bear market.
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Our Methodology:
To find dividend stocks for a bear market, we scanned for companies with at least 10 years of consistent or growing dividends, especially in defensive sectors like consumer staples, healthcare, and utilities. Preference was also given to companies with competitive advantages and dividend yields that are attractive relative to their historical or sector averages. From the shortlisted stocks, we picked 10 stocks with the highest number of hedge fund investors owning stakes in the company, according to Insider Monkey’s database of Q1 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. Enterprise Products Partners L.P. (NYSE:EPD)
Number of Hedge Fund Holders: 31
Enterprise Products Partners L.P. (NYSE:EPD) is one of the best dividend stocks for a bear market. Energy plays such a critical role in the global economy that demand tends to stay strong regardless of market fluctuations. As a result, Enterprise Products Partners L.P. (NYSE:EPD) enjoys stable cash flows, which allow it to maintain and steadily grow its generous distribution. In fact, the company has raised its payout every year for 27 years straight.
Its healthy cash position also supports the sustainability of these dividends going forward. Enterprise Products Partners L.P. (NYSE:EPD) has around $6 billion worth of organic growth projects set to come online this year, expected to start contributing to cash flow. In the latest quarter, it generated $2.1 billion in operating cash flow and reported $1.05 billion in free cash flow. While the distribution is a major draw, it’s not the only factor behind the company’s strong returns. Growing global demand for US hydrocarbons, especially natural gas liquids, has also been a significant tailwind.
In addition, Enterprise Products Partners L.P. (NYSE:EPD) offers an attractive dividend yield of 6.85%, as of June 17. The company currently offers a quarterly dividend of $0.535 per share.
Enterprise Products Partners L.P. (NYSE:EPD) is a major midstream energy company in North America that offers a range of services, including the transportation, storage, processing, and marketing of natural gas, natural gas liquids (NGLs), crude oil, refined fuels, and petrochemicals.
9. Mondelez International, Inc. (NASDAQ:MDLZ)
Number of Hedge Fund Holders: 52
Mondelez International, Inc. (NASDAQ:MDLZ) ranks among the top global snack makers and belongs to the consumer staples sector. During economic downturns, consumers typically continue buying food at consistent levels, and even tend to favor discounted options more, making large food companies like Mondelez appealing, especially when spending declines in more discretionary areas.
Another reason investors are drawn to Mondelez International, Inc. (NASDAQ:MDLZ) is its strong dividend and reliable cash flow. In the latest quarter, the company generated $1.1 billion in operating cash flow and $0.8 billion in free cash flow, while returning $2.1 billion to shareholders through dividends and buybacks.
Mondelez International, Inc. (NASDAQ:MDLZ) has also garnered attention on the dividend front. The company has been rewarding shareholders with growing dividends for the past 11 consecutive years. It offers a quarterly dividend of $0.47 per share and has a dividend yield of 2.83%
The company has expressed confidence in its future earnings potential, which may support the strength and stability of its dividend payments. It has reaffirmed its outlook for the year, expecting organic net revenue to grow by around 5%. However, adjusted earnings per share are projected to decline by roughly 10% on a constant currency basis, mainly due to an unusual surge in cocoa prices. Despite this, the company anticipates generating over $3 billion in free cash flow for 2025.
Since recessions often go hand in hand with falling stock markets, investors with shorter time horizons may find value in holding companies that offer steady or growing dividend yields.