In this article, we will take a look at some of the best recession-proof dividend stocks.
Since 1950, the United States has gone through 10 official recessions. In seven of those instances, the Standard & Poor’s 500, a broad measure of the stock market, also declined, while three downturns did not see major drops. The last recession that did not coincide with a notable fall in the index was nearly 50 years ago, during the back-to-back recessions of 1980 and 1982.
For the seven recessions linked with market declines, the S&P 500 fell by an average of about 31%, with losses ranging from 18% to as much as 55%. The steepest drop came during the Great Recession, when the index plunged 55%. More recently, amid the surge in US inflation to 40-year highs, the S&P slipped around 25% between January and September 2022.
Recessions usually bring a slowdown in consumer spending. As demand weakens, businesses often cut prices— or at least hold off on raising them— in an effort to encourage customers to keep buying. For this, investors often rely on dividend stocks to maximize their returns, as these equities perform better during these periods.
For this, we will take a look at some of the best dividend stocks for a recession.
Source: unsplash
Our Methodology
For this article, we used Insider Monkey’s database of nearly 1,000 hedge funds as of Q2 2025 and identified dividend stocks from industries that are known to be recession-proof, such as healthcare, consumer staples, telecommunications, and utilities. From that list, we selected dividend stocks that have consistently increased their payouts for over 10 years. Finally, we shortlisted 10 best dividend stocks that had the highest number of hedge fund investors tracked by Insider Monkey as of Q2 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: 26
Enterprise Products Partners L.P. (NYSE:EPD) is a leading midstream energy company known for generating steady cash flow, even through difficult periods like the 2007–2009 financial crisis, the 2015–2017 oil price slump, and the COVID-19 downturn from 2020 to 2022.
Founded in 1968, Enterprise Products Partners L.P. (NYSE:EPD) has grown into one of the largest midstream operators in the US, with assets spanning nearly every major shale basin and extending across the Gulf Coast. The company has weathered past recessions without cutting its dividend and even managed to outperform during the 2008 crisis.
Its extensive network of pipelines, storage facilities, and infrastructure moves fossil fuels from the wellhead to the end user, earning fees along the supply chain at multiple stages. EPD is one of the best dividend stocks to invest in, as the company has raised its payouts for 27 consecutive years. It currently offers a quarterly dividend of $0.545 per share and has a dividend yield of 6.89%, as of September 26.
9. Genuine Parts Company (NYSE:GPC)
Number of Hedge Fund Holders: 38
Genuine Parts Company (NYSE:GPC) is a top supplier of automotive and industrial replacement parts and has shown remarkable resilience over its long history. It has grown sales in 91 of its 97 years and increased earnings in 79 of them. Strong and consistent demand for replacement parts has supported this performance, along with the company’s disciplined approach to acquisitions. The company targets deals that not only enhance sales and margins but also contribute to earnings per share within the first year.
Genuine Parts Company (NYSE:GPC) earns most of its revenue from its automotive segment, which sells products through a wide distribution network that includes thousands of NAPA and Alliance auto parts stores. The automotive aftermarket tends to remain strong even during tough economic periods, since consumers continue to repair and maintain older vehicles as they age and require service.
In addition, Genuine Parts Company (NYSE:GPC) is a solid dividend company. It maintains one of the longest dividend growth streaks in the market, spanning 69 years. The company currently offers a quarterly dividend of $1.03 per share and has a dividend yield of 2.99%, as of September 26.
8. General Mills, Inc. (NYSE:GIS)
Number of Hedge Fund Holders: 42
General Mills, Inc. (NYSE:GIS), founded in 1866, shifted its full focus to consumer foods in 1995 and now offers a wide range of packaged meals, cereals, snacks, baking goods, pet food, and more.
General Mills, Inc. (NYSE:GIS)’s core brands, many of which have been household staples for decades, are backed by significant investments in advertising and innovation. This has enabled the company’s products to reach over 95% of US households and maintain leading positions in their categories.
Because shoppers expect to find these brands in stores, General Mills, Inc. (NYSE:GIS) holds strong pricing power with retailers, helping it manage inflation. The company has also proven resilient in tough times, as shown in 2010 when it delivered record results, including higher sales, improved margins, profit growth across all segments, and solid cash flow.
Moreover, General Mills, Inc. (NYSE:GIS) has been making regular dividend payments to shareholders for the past 127 years, which makes it one of the best dividend stocks. The company offers a quarterly dividend of $0.61 per share and has a dividend yield of 4.87%, as of September 26.
7. Kimberly-Clark Corporation (NASDAQ:KMB)
Number of Hedge Fund Holders: 42
Kimberly-Clark Corporation (NASDAQ:KMB) is a global consumer goods company best known for its personal care and tissue brands, including Huggies diapers, Kotex feminine products, and Kleenex tissues, which cater to both households and commercial customers around the world.
Kimberly-Clark Corporation (NASDAQ:KMB)’s products tend to see steady demand even in recessions, since essentials like diapers and toilet paper are not easily cut from household budgets. While some consumers shift to lower-cost options during tough times, the company competes across all price ranges with both value and premium products.
This resilience was evident during the 2007–09 financial crisis, when sales declined only 4%. Although inflation raises costs for raw materials such as pulp and nonwoven fabrics, Kimberly-Clark Corporation (NASDAQ:KMB) has managed to counter much of that pressure through price increases and efficiency measures. Moreover, the company is a Dividend King, with 53 consecutive years of dividend growth under its belt. Currently, it offers a quarterly dividend of $1.26 per share and has a dividend yield of 4.12%, as of September 26.
6. Consolidated Edison, Inc. (NYSE:ED)
Number of Hedge Fund Holders: 51
Consolidated Edison, Inc. (NYSE:ED) is a utility company that supplies electricity and gas to the New York City area. Its steady demand and regulated pricing provide consistent cash flow, supporting a reliable and gradually growing dividend, which appeals to income-focused investors.
By concentrating on regulated utilities in an industry that changes slowly and offers recession-resistant services, Consolidated Edison, Inc. (NYSE:ED) has built a stable earnings base. However, challenges remain, as New York City has seen population declines in recent years and regulators have been reluctant to approve higher rates due to already high living and energy costs.
Even so, Consolidated Edison, Inc. (NYSE:ED) faces ongoing responsibilities to upgrade and maintain the city’s infrastructure, requiring significant investment to meet the demands of such a dense and complex urban environment.
Consolidated Edison, Inc. (NYSE:ED)’s dividend history also makes it an appealing option for income investors. The company has paid regular dividends to shareholders since 1885 and has raised its payouts for 51 consecutive years. Currently, it offers a quarterly dividend of $0.85 per share and has a dividend yield of 3.41%, as of September 26.
5. Medtronic plc (NYSE:MDT)
Number of Hedge Fund Holders: 62
In a recession, economic activity slows, unemployment rises, and consumer spending drops. However, defensive sectors like healthcare often hold up better since medical products and services are essential. Companies such as Medtronic plc (NYSE:MDT) benefit from this resilience.
Medtronic plc (NYSE:MDT) ranks among the world’s largest medical device makers, with a portfolio spanning four key areas: diabetes care, cardiovascular health, medical surgical, and neuroscience. Its products include treatments for aneurysms, strokes, and hernias, along with insulin pumps for diabetes patients— essential medical needs that people are unlikely to cut back on.
Medtronic plc (NYSE:MDT) is well-positioned for long-term growth, supported by its strong industry presence and the global trend of an aging population. The company has also invested in areas with significant future potential, such as robotic-assisted surgery. While Intuitive Surgical currently leads this market, Medtronic sees opportunity, noting that fewer than 5% of eligible surgeries are performed robotically today.
Medtronic plc (NYSE:MDT) has been rewarding shareholders with growing dividends for the past 48 years, which makes it one of the best dividend stocks for a recession. It pays a quarterly dividend of $0.71 per share and has a dividend yield of 3.01%, as of September 26.
4. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 67
Bristol-Myers Squibb Company (NYSE:BMY) is an American multinational pharmaceutical company. It concentrates primarily on branded pharmaceuticals, a sector known for high entry barriers and strong profitability. Developing breakthrough drugs requires billions in investment and years of research, with relatively few candidates making it to market.
However, those that succeed can deliver billions in revenue, supported by long-lasting patent protection that shields them from competition. Because medications remain essential regardless of economic conditions, they are considered recession-resistant. This resilience helped Bristol-Myers Squibb Company (NYSE:BMY)’s stock decline only 32% during the 2007–09 financial crisis, compared with a drop of more than 50% for the broader market.
Bristol-Myers Squibb Company (NYSE:BMY) is also a strong dividend company. Currently, it pays a quarterly dividend of $0.62 per share and has a dividend yield of 5.62%, as of September 26. The company has raised its payouts for 16 years in a row.
3. Lockheed Martin Corporation (NYSE:LMT)
Number of Hedge Fund Holders: 73
Lockheed Martin Corporation (NYSE:LMT) is an American defense and aerospace manufacturer whose business largely comes from the federal government. Its projects include combat aircraft like the F-35, missile defense systems, military helicopters, and satellite technologies.
Since defense and military strength remain central to national security, governments consistently allocate substantial budgets to this area. Lockheed Martin Corporation (NYSE:LMT)’s scale, long-standing reputation, and trusted partnerships with the US government have secured it a strong backlog of contracts, ensuring revenue visibility for years ahead.
Although defense spending can fluctuate, Lockheed Martin Corporation (NYSE:LMT) benefits from a solid baseline of funding and a diverse portfolio of projects, enabling it to maintain steady profits largely independent of broader economic cycles. In addition, the company boasts a strong dividend history, having raised its payouts for 22 consecutive years. Its quarterly dividend comes in at $3.30 per share and has a dividend yield of 2.71%, as of September 26.
2. The Procter & Gamble Company (NYSE:PG)
Number of Hedge Fund Holders: 88
The Procter & Gamble Company (NYSE:PG), founded in 1837, has grown into one of the world’s leading producers of household and personal care products, including detergents, diapers, baby wipes, paper towels, shampoos, deodorants, toothpaste, and cleaning supplies.
Thanks to decades of investment in marketing and product innovation, more than 20 of The Procter & Gamble Company (NYSE:PG)’s brands generate over a billion dollars each in annual sales, with many holding the top spots in their categories. Shoppers have come to expect these brands on store shelves.
This strong brand recognition gives The Procter & Gamble Company (NYSE:PG) leverage with retailers, allowing the company to raise prices when needed, even in times of inflation. In addition, with relatively low debt, the firm’s earnings remain well shielded from the impact of higher interest rates.
The Procter & Gamble Company (NYSE:PG) is a Dividend King, increasing its payouts for 69 consecutive years. The company currently offers a quarterly dividend of $1.0568 per share and has a dividend yield of 2.77%, as of September 26.
1. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 95
Johnson & Johnson (NYSE:JNJ), founded in 1886 to produce sterile surgical supplies after the Civil War, has since grown into one of the largest global pharmaceutical and medical device companies.
Unlike some drugmakers that rely heavily on a single blockbuster treatment, Johnson & Johnson (NYSE:JNJ) maintains a diverse portfolio across multiple areas, helping limit swings in its earnings once patents expire.
Although demand for medical devices can dip during recessions when elective procedures are delayed, the steady need for many essential treatments helps support the company’s stability. Backed by a long record of paying dividends, Johnson & Johnson (NYSE:JNJ) is well-positioned to remain a key player for decades, regardless of downturns or bear markets.
Johnson & Johnson (NYSE:JNJ) has been increasing its dividends for 63 consecutive years, which makes it one of the best dividend stocks for a recession. The company offers a quarterly dividend of $1.30 per share and has a dividend yield of 2.89%, as of September 26.
While we acknowledge the potential of JNJ 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 JNJ and that has 100x upside potential, check out our report about this cheapest AI stock.
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