So you’re worried about a stock market crash. You’re certainly not alone. Global disturbances alone might be enough to cause worry, but check out the last few years’ performance of the S&P 500:
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S&P 500 Return |
|---|---|
|
2016 |
12% |
|
2017 |
21.8% |
|
2018 |
(4.4%) |
|
2019 |
31.5% |
|
2020 |
18.4% |
|
2021 |
28.7% |
|
2022 |
(18.11%) |
|
2023 |
26.29% |
|
2024 |
25.02% |
|
2025 |
17.88% |
Data source: Slickcharts.com. Returns reflect reinvested dividends.
Considering that the long-term average annual gain of the S&P 500 is around 10%, these are a lot of heady numbers — mostly double-digit gains, and only two down years. It’s reasonable to expect another decline in the next year or three.
So, what dividend stocks might you buy now if you’re worried about a crash? Well, here are two to consider.
1. Kimberly-Clark
Kimberly-Clark (NASDAQ: KMB) should be a familiar name, as it’s home to brands such as Huggies, Kleenex, Scott, Kotex, Cottonelle, Poise, Depends, Pull-Ups, Goodnites, Softex, and Viva. Its products are mostly items that people will need to buy whether the market has crashed or not — toilet paper, paper towels, diapers, and so on. Thus, this is a defensive company. (Kimberly-Clark is also aiming to buy Kenvue, with its Neutrogena, Tylenol, and Listerine brands.)
The company has struggled in recent years, with its stock down nearly 22% over the past year (as of May 5). That has made its stock valuation quite attractive, and its recent forward-looking price-to-earnings (P/E) ratio of 12.8 is well below the five-year average of 18.6. It has been working on cutting costs and modernizing its supply chain, so it’s aiming to turn its fortunes around. One goal is gross margins of at least 40%.
Kimberly-Clark’s dividend recently yielded a hefty 5.4%, and the company has upped that payout for 54 years in a row. Long-term investors can enjoy significant income from this stock, while waiting for the turnaround to be completed.
2. Realty Income
Realty Income (NYSE: O) also seems a solid stock to hold during a market downturn — or any other time. It’s a real estate investment trust (REIT) — a company that buys lots of real estate and leases it to tenants. Realty Income’s dividend yield was recently a weighty 5.1% — and it has paid its dividend for 670 months in a row.
