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.
Photo by nathan dumlao on Unsplash
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.
8. PepsiCo, Inc. (NASDAQ:PEP)
Number of Hedge Fund Holders: 71
In uncertain times, investing in a dividend-paying stock that has seen a significant drop in price can be a smart move, provided the company’s long-term fundamentals remain strong.
PepsiCo, Inc. (NASDAQ:PEP) fits that description well. Despite a nearly 14% decline in its share price since the beginning of 2025, the company maintains its reputation as a Dividend King, with 53 consecutive years of dividend increases. The latest boost, which was a 5% rise, was announced alongside its Q4 2024 earnings. Such a consistent track record reflects a solid business strategy that performs well regardless of market conditions.
PepsiCo, Inc. (NASDAQ:PEP) dividend history speaks to its disciplined management and operational strength. However, recent challenges have emerged. In April, the company lowered its annual profit outlook, citing rising production costs and weaker consumer spending, pressures linked to economic uncertainty stemming from wide-reaching tariffs introduced by President Donald Trump.
Even so, analysts view these issues as temporary. Once the broader economic environment stabilizes, demand is expected to recover.
PepsiCo, Inc. (NASDAQ:PEP) currently offers a quarterly dividend of $1.4225 per share and has a dividend yield of 4.4%, as of June 17.
7. CVS Health Corporation (NYSE:CVS)
Number of Hedge Fund Holders: 73
Even during economic downturns, people continue to rely on medications, essential consumer products, and affordable local healthcare. CVS Health Corporation (NYSE:CVS) serves as a convenient healthcare and retail destination within communities.
The company’s overall business remains solid, thanks to its diversified operations and multiple sources of revenue. In recent years, it has expanded its presence in primary care and launched a subsidiary called Cordavis to focus on developing and marketing biosimilar drugs. Its broad reach across communities and wide range of services are key advantages.
Lately, higher Medicare usage and increased post-pandemic healthcare costs have impacted the company’s revenue and earnings growth. However, CVS Health Corporation (NYSE:CVS) remains profitable and maintains a solid cash position. In the most recent quarter, it reported $4.6 billion in operating cash flow. Looking ahead to 2025, the company has raised its full-year operating cash flow forecast from around $6.5 billion to approximately $7.0 billion.
In addition, CVS Health Corporation (NYSE:CVS) appears to have significant room to grow its dividend. With a cash payout ratio of just 30%, even doubling that figure would still leave it within a sustainable range.
Due to this strong cash generation, CVS Health Corporation (NYSE:CVS) has maintained its payouts since 1997. Currently, it offers a quarterly dividend of $0.665 per share and has a dividend yield of 3.96%, as of June 17.
6. T-Mobile US, Inc. (NASDAQ:TMUS)
Number of Hedge Fund Holders: 75
T-Mobile US, Inc. (NASDAQ:TMUS) is one of the best dividend stocks for a bear market. The company began paying dividends in 2023, starting at $0.65 per share, and has since raised the payout to $0.88 per share.
T-Mobile US, Inc. (NASDAQ:TMUS) initially gained ground by undercutting legacy carriers on pricing, gradually capturing market share. It also expanded through key acquisitions, including Sprint and, more recently, UScellular. The Sprint deal was especially significant, giving T-Mobile access to valuable wireless spectrum that underpins its network infrastructure.
As for its dividend outlook, the future appears promising. T-Mobile US, Inc. (NASDAQ:TMUS)’s growth-through-acquisition strategy is expected to boost revenue, while strong cash flow supports further dividend potential. In the first quarter of 2025, the company reported $6.84 billion in operating cash flow and $4.39 billion in free cash flow.
For the full year, it projects adjusted free cash flow, including merger-related expenses, to range between $17.5 billion and $18 billion, fueled by margin gains and efficient capital use. This is translating into one of the best service revenue-to-free cash flow conversion rates in the industry.
Warren Buffett’s investment team took notice of T-Mobile US, Inc. (NASDAQ:TMUS)’s performance as well, initiating a position in the third quarter of 2020. The company offers a quarterly dividend of $0.88 per share and has a dividend yield of 1.59%, as of June 17.
5. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 86
AbbVie Inc. (NYSE:ABBV) is one of the best stocks for a bear market. The company holds the title of a Dividend King, having raised its dividend for 52 straight years. That kind of track record makes a dividend cut highly unlikely, as it would break the streak and potentially take decades to regain entry into this elite group.
AbbVie Inc. (NYSE:ABBV) is a leading pharmaceutical company with a strong product lineup that consistently delivers solid revenue and earnings. Its top growth drivers, Skyrizi and Rinvoq, have outperformed expectations, leading management to raise their combined 2027 sales forecast to over $31 billion. The company also benefits from other key products like Botox and a deep pipeline of new therapies to offset future patent expirations.
With strong cash flow and a reliable portfolio, AbbVie Inc. (NYSE:ABBV) remains an attractive pick for income investors looking for long-term dividend stability.
Naturally, if AbbVie encounters serious challenges, it could be pressured to reduce its dividend. One concern is its elevated payout ratio, currently at 267.66%. Typically, when a company’s payout ratio remains above 70% for an extended time, it raises the risk of a dividend cut or suspension.
However, AbbVie Inc. (NYSE:ABBV)’s next-generation immunology drugs are seeing strong growth, which could help offset the challenges it’s facing from Humira. The rheumatoid arthritis treatment has been under pressure due to its loss of market exclusivity in the US and the increasing competition from biosimilars.
ABBV currently offers a dividend yield of 3.5%, which is above S&P’s average dividend yield of 1.3%.
4. The Coca-Cola Company (NYSE:KO)
Number of Hedge Fund Holders: 87
The Coca-Cola Company (NYSE:KO) is among the best dividend stocks for a bear market. The company has paid a dividend since 1920 and has raised its annual payout for 63 consecutive years, a streak topped by only a few publicly traded companies.
The Coca-Cola Company (NYSE:KO) operates in a space that offers rare stability, even when the economy takes a hit. Its strength lies in two key factors: consistent demand and the ability to raise prices without losing customers. As a provider of consumer staples, the company benefits from steady demand even during economic downturns. While it isn’t immune to challenges, its core operations tend to hold up well when the broader market struggles. In addition, when sales volume dips, Coca-Cola can often raise prices without losing customers.
This resilience is reflected in its valuation, both its price-to-sales and price-to-earnings ratios are above their five-year averages. Given its strong fundamentals and track record, The Coca-Cola Company (NYSE:KO) is well-positioned to continue increasing its dividend in the years ahead. The company’s five-year average payout ratio is around 80%, and given its solid cash generation, investors expect growing dividends in the coming years as well.
The Coca-Cola Company (NYSE:KO) offers a dividend yield of 2.88%, as of June 17.
3. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 88
The Procter & Gamble Company (NYSE:PG) is one of the best dividend stocks for a bear market. The company is a dividend powerhouse, having delivered consistent payouts for decades, driven by its reliable cash flow, which also supports future dividend growth.
In fiscal Q3 2025, The Procter & Gamble Company (NYSE:PG) generated $3.7 billion in operating cash flow and reported $3.8 billion in net earnings. Its adjusted free cash flow productivity stood at 75%, a measure calculated by subtracting capital spending from operating cash flow and comparing it to net earnings.
In the same quarter, The Procter & Gamble Company (NYSE:PG) returned $3.8 billion to shareholders, $2.4 billion through dividends and $1.4 billion via share buybacks. In April, the company announced its 69th consecutive annual dividend increase. Impressively, it has paid a dividend every year since its incorporation in 1890, marking 135 straight years of shareholder payouts.
The Procter & Gamble Company (NYSE:PG) is focusing on supply chain upgrades, digital improvements, and a portfolio restructuring to drive growth. The company expects steady earnings growth and is well-equipped to maintain its streak of dividend increases. Currently, it offers a quarterly dividend of $1.0568 per share and has a dividend yield of 2.68%, as of June 17.
2. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 91
Johnson & Johnson (NYSE:JNJ) is among the best dividend stocks for a bear market. The company is facing a combination of slow revenue growth, unresolved legal battles over talc products, and looming drug price negotiations under new Medicare rules. These issues could weigh on investor sentiment and profitability in the near term.
Despite current challenges, Johnson & Johnson (NYSE:JNJ) has a long history of managing legal and regulatory hurdles while maintaining strong performance. With a solid credit rating and the 2023 spinoff of its slower-growth Kenvue unit, the company is better positioned to focus on higher-growth areas and drive future earnings.
Johnson & Johnson (NYSE:JNJ) stands out as a top-tier dividend stock, with 63 consecutive years of dividend increases, an impressive track record that highlights the strength and resilience of its core business. This consistency is a key reason why investors continue to favor the stock, even amid current challenges.
The dividend remains secure, supported by J&J’s strategic focus on innovation in pharmaceuticals and medical devices. The company boasts a robust pipeline of experimental drugs and is advancing cutting-edge technologies like the Ottava robotic surgery system, which could unlock significant long-term growth potential.
Johnson & Johnson (NYSE:JNJ) currently offers a quarterly dividend of $1.30 per share and has a dividend yield of 3.45%, as of June 17.
1. Walmart Inc. (NYSE:WMT)
Number of Hedge Fund Holders: 100
Walmart Inc. (NYSE:WMT) is one of the best dividend stocks for a bear market. The company is reportedly looking into the idea of creating or using its own stablecoins. These digital tokens allow the transfer of US dollar value through cryptocurrency networks rather than traditional banking systems.
For retailers, stablecoins are attractive because they could significantly reduce payment processing costs by leveraging the speed and efficiency of blockchain technology, though that could also divert a large volume of transactions away from major card networks.
Despite this, analysts remain confident in the resilience of card companies. They argue that stablecoins are unlikely to disrupt consumer-to-business payments anytime soon, mainly due to regulatory and technical hurdles. In response to the news, Wells Fargo analyst Donald Fandetti stated that they remain bullish on Visa and Mastercard, citing multiple barriers to stablecoins becoming a viable alternative to traditional card payments.
Walmart Inc. (NYSE:WMT) has a track record of exploring innovative financial technologies, and according to analyst Harshita Rawat, it’s not unusual for major retailers to look into alternative payment options. She made the following comment:
“Traction will likely take years and may be limited to certain cross-border use-cases or some emerging countries (e.g., ones which have volatile underlying currencies). In retail consumer-to-business payments, stablecoins are a solution looking for a problem (for the foreseeable future) in most developed markets … There are, however, other use-cases with stronger product market fit e.g., in less liquid remittances corridors, cross-border business-to-business and treasury/cash management.”
Walmart Inc. (NYSE:WMT) is a solid dividend stock with 52 consecutive years of dividend growth under its belt. The company offers a quarterly dividend of $0.235 per share and has a dividend yield of 0.98%, as of June 17.
While we acknowledge the potential of WMT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than WMT and that has 100x upside potential, check out our report about this cheapest AI stock.
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