No Matter What Happens to the Market, These 5 Dividend Stocks Belong in Your Portfolio

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No Matter What Happens to the Market, These 5 Dividend Stocks Belong in Your Portfolio.

investing ideas :: 9hrs ago :: source - motley fool

By Justin Pope

After a few strong years in the market, the pendulum has started to swing in the other direction. Fear is slowly starting to creep in amid the ongoing war in Iran and concerns over the U.S. economy.

Times like these are when a long-term investing strategy shines the brightest. Reliable, proven consumer-facing dividend stocks can help anchor a portfolio, paying steady, growing dividends while stock prices fluctuate amid market turmoil.

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No matter what happens next, it's a good idea to have these five blue chip dividend stocks in your portfolio.

Image source: Getty Images.

1. Coca-Cola

People drink beverages regardless of the economy. Coca-Cola (NYSE: KO) has turned this simple truth into 64 years of consecutive annual dividend increases, making the company a Dividend King. (This title applies to companies that have raised their annual dividend for at least 50 consecutive years.) A classic Warren Buffett stock, Coca-Cola has proven its resilience over the years. The global company has 32 billion-dollar brands and sells 2.2 billion servings each day to over 200 countries. The stock itself yields 2.8% today.

Coca-Cola's dividend is only 65% of this year's estimated earnings, and analysts expect the company to grow by 7% annually over the next three to five years. That will continue to fund future dividend raises as Coca-Cola continues to churn out steady growth like it has done for decades.

2. McDonald's

People always eat out. But when the economy is slow, people often trade down to cheaper meal options. McDonald's Corporation (NYSE: MCD) is arguably the biggest winner in these scenarios. The famous fast-food restaurant empire has more than 45,000 locations across over 100 countries. Its franchise model generates consistent revenue from franchise fees and sales royalties.

As a result, McDonald's is a renowned dividend stock with a 2.4% yield and 49 consecutive annual raises. Analysts expect 8% annualized earnings growth over the coming years, paving the way for that streak to continue. The dividend is only 56% of 2026 earnings estimates, leaving plenty of financial cushion in a down economy.

3. Procter & Gamble

Household goods giant Procter & Gamble (NYSE: PG) is behind iconic brands such as Tide, Old Spice, Bounty, Charmin, and more. Procter & Gamble's success stems from its innovation and ability to build brand loyalty among shoppers, minimizing trade-downs to generic brands during difficult times. That's how the company has managed 69 consecutive annual dividend hikes, which make Proctor & Gamble a Dividend King.

Procter & Gamble remains a sleep-well-at-night stock for your money and yields roughly 3% right now. Plus, the dividend is still only 61% of 2026 earnings estimates. Analysts estimate Procter & Gamble's earnings will grow by 4% annually over the next several years, driving future dividend increases.

4. Domino's Pizza

Pizza is a bullseye for feeding the masses on a budget. Domino's Pizza (NASDAQ: DPZ) is the world's largest pizza restaurant chain with more than 22,000 stores across more than 90 countries. Pizza's global appeal has allowed the company to expand aggressively over the years. And like McDonald's, Domino's has leveraged a franchise model that generates steady cash flow.

The stock yields 2.3%, and Domino's has raised the dividend for 14 consecutive years and counting. The payout ratio is still just 40% of 2026 estimated earnings, and analysts anticipate Domino's earnings growing by more than 11% annually over the next three to five years as it continues to open new stores.

5. Walmart

Consumers associate Walmart (NASDAQ: WMT), the world's largest retailer by sales, with low prices. It's a self-fulfilling brand identity, as Walmart's massive size allows it to squeeze suppliers and sell goods at slim margins to achieve lower prices than its competitors. It has worked wonders, evidenced by Walmart's 53 consecutive annual dividend increases. Like Coca-Cola and Proctor & Gamble, Walmart is a Dividend King.

At this point, 90% of Americans live within a short drive of a Walmart store. That has helped the company adapt to technology and become the second-largest e-commerce retailer in the U.S. The dividend yield is only 0.8% today, but there is plenty of room for increases. Analyst estimates call for 9% annual growth over the coming years, and the dividend is only 34% of earnings.

Should you buy stock in Coca-Cola right now?

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Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Domino's Pizza and Walmart. The Motley Fool has a disclosure policy.

This article was originally published by The Motley Fool