5 Dividend Stocks That Should Hardly Feel A Market Downturn

Includes: KO, MCD, PEP, STX, WMT
by: Francis Fiduk

There are a lot of bargain dividend picks out there that should make investors happy over the long run. Some of these stocks however will perform better than others even with a possible market downturn. These types of stocks have strong products, brands, or other features that make them more resilient. Here are five dividend yielding picks that I think will continue to do well in any market climate.

Seagate (NASDAQ:STX)

Seagate designs, manufactures, and sells hard disk drives. Its products are used in enterprise servers, mainframes, and workstations, as well as desktop computers, laptops, and notebooks. What I like most about STX is their cash hoard of over 3.2 billion which is being added to by over 400+ million each of the last 3 fiscal years. The cash alone makes each share worth about $7.76, and if they continue to add that kind of cash to its total holdings, it should add about a dollar to the share value each year. Combine that with the 6.4% yield and this stock should perform well even if it hits speed bumps with rare earth prices.

  • Last Trade: 11.19
  • 52wk Range: 9.05 - 18.35
  • Market Cap: 4.69B
  • P/E (ttm): 10.27
  • Div & Yield: 0.72 (6.40%)

Wal-Mart (NYSE:WMT)

WMT operates retail stores around the world with a pricing philosophy of "every day low prices.' WMT offers a broad assortment of merchandise aimed at making their stores a one stop location for all of your needs. Currently, after nine months of same-store sales declines, WMT has now posted positive same-store sales for the third straight month. This signifies to me that Wal-Mart store sales appear to be past their bottom and should continue to increase. If a recession is on the horizon, don’t expect it to affect WMT negatively. WMT’s revenue grew by 16.04% from 07-09, while only growing 4.35% from 09-11.

  • Last Trade: 55.20
  • 52wk Range: 48.31 - 57.90
  • Market Cap: 190.25B
  • P/E (ttm): 11.75
  • Div & Yield: 1.46 (2.70%

McDonalds (NYSE:MCD)

MCD franchises and operates restaurants in the food service industry. It serves a varied, value-priced menu in more than 100 countries around the world. MCD is up over 113% over the past 5 years, while the S&P500 is down 12%. MCD doesn’t show any signs of slowing down either; MCD is up 14% this year, compared to the S&P500 which is down about 4%. Those two facts alone make this stock very intriguing. With affordable food prices, MCD has been able to thrive in any market. MCD gained new customers during the recession then held on to them even after it ended. Should we enter another recession look for MCD to perform even better.

  • Last Trade: 88.36
  • 52wk Range: 72.14 - 91.22
  • Market Cap: 91.17B
  • P/E (ttm): 17.88
  • Div & Yield: 2.80 (3.10%)

Coca-Cola (NYSE:KO)

The Coca-Cola Company is the world's leading owner and marketer of nonalcoholic beverage brands and the world's largest manufacturer, distributor and marketer of concentrates and syrups used to produce nonalcoholic beverages. KO is also Buffett’s #1 holding, and for good reason. It costs the company virtually nothing to make each product, and the brand name sells itself. One of my personal favorite Warren Buffett quotes comes into play here: “I try to buy stock in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.” Buffett is completely correct here, after all, how hard is it to keep doing the same thing you’ve been doing for the last few decades? KO may not be in store for any wild growth, but it will continue to grow, and it will keep on paying out a dividend year after year. I believe this is one of the few companies you can truly buy and forget.

  • Last Trade: 67.48
  • 52wk Range: 59.66 - 71.77
  • Market Cap: 154.94B
  • P/E (ttm): 12.57
  • Div & Yield: 1.88 (2.80%)

Pepsi (NYSE:PEP)

PEP is a leading global food, snack and beverage company. Its brands include Quaker Oats, Tropicana, Gatorade, Frito-Lay, Pepsi, and Mountain Dew. PEP has the same positive factors going for it that KO has. PEP has the strong sales among male teens and young adults with Mountain Dew. Also, Mountain Dew has been slowly moving its way up top 10 soda lists, and now sits only behind Coke, Diet-Coke, and Pepsi. Mountain Dew still has a long ways to go before catching up to any of the top 3, but I like the potential.

  • Last Trade: 62.70
  • 52wk Range: 58.50 - 71.89
  • Market Cap: 99.23B
  • P/E (ttm): 15.95
  • Div & Yield: 2.06 (3.40%

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.