During stormy market periods filled with uncertainty, investors often gravitate towards resilient dividend-paying stocks as a safe haven. Consequently, many dividend-paying stocks are believed to provide a reliable buffer against the typical turbulence of stormy market climates. However, many of these names are far more fragile than commonly understood by investors.
That said, I am confident enough to say that the following three stocks actually do offer ultra-safe dividends. They feature recession-resistant business models, long dividend growth track records and highly valuable, forward-looking visibility into their future prospects. These attributes inspire confidence in their capacity to uphold their payouts, even during the most turbulent market conditions.
Federal Realty Investment Trust (FRT)
Federal Realty Investment Trust (NYSE:FRT) has proven that it’s a reliable stock to hold onto, even when the markets get stormy. This real estate investment trust (REIT) has demonstrated remarkable resilience during some of the most challenging periods. In fact, it holds the record for the longest dividend-growth streak among all REITs, boasting 56 years of consecutive annual dividend increases.
The current market environment makes it an ideal time to exhibit the unique positioning of FRT stock in the sector. In particular, most REITs posted declining profitability last year, a trend that is expected to persist this year. This is due to higher interest rates, resulting in soaring interest expenses.
In contrast, FRT stock posted record FFO/share of $6.55 in FY2023, up from $6.32 in FY2022. Thus, investors looking for safe dividend stocks, especially among REITs, are likely to find FRT stock a prime candidate.
Kimberly-Clark (KMB)
Kimberly-Clark (NYSE:KMB) makes for another prime candidate if you are looking for ultra-safe dividends. The consumer staples giant has historically weathered stormy markets with ease. This is thanks to the recession-proof qualities of its business. As a leader in personal care products, Kimberly-Clark tends to post predictable results regardless of the economy’s underlying state.
In times of market turbulence, consumers may tighten their belts on discretionary goods and services, but their spending on essential personal care products hardly changes. In the meantime, Kimberly-Clark owns some of the most trusted brands in the space, including Kleenex, Scott and Huggies, so it enjoys solid pricing power.
This further enhances its ability to maintain and grow revenues and earnings even during unfavorable market periods. Evidently, Kimberly-Clark has raised its dividend every year over the past 52 years, proving it’s one of the most reliable dividend stocks in the space to hold during stormy markets.
MSA Safety (MSA)
Rarely are industrial stocks praised as top choices for ultra-safe dividends. This is because their business models tend to be more cyclical than your average company. And yet, MSA Safety (NYSE:MSA) makes for a nice exception, offering a truly ultra-safe dividend.
As a premier provider of safety equipment for workers across diverse sectors, including mining, construction, oil and gas and firefighting, MSA maintains a steady flow of orders, guaranteeing reliability in performance regardless of market fluctuations.
Organizations may reduce their discretionary spending in uncertain market climates, but safeguarding the health and well-being of field workers remains non-negotiable. This ensures MSA’s ability to post robust results consistently.
Accordingly, MSA has successfully maintained steady dividend growth for 53 consecutive years despite the various recessions and economic downturns that took place during this prolonged period. With safety equipment set to enjoy steady demand invariably, this trend is set to last for decades to come.
On the date of publication, Nikolaos Sismanis did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
