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Worried about a stock market crash?Buy these recession-proof dividend stocks



This is a turbulent year for the stock market. There are several factors that indicate the impending stock market crash, and this idea is enough to make investors uneasy. However, instead of panicking, it’s time to prepare your own stocks and prevent your portfolio from falling into recession by adding some stocks that can withstand the storm.

How to buy some dividend stocks that can pay stable dividends? In this way, you can earn passive income even during a recession. If this sounds like a good idea, check out these three dividend stocks with outstanding recession capabilities now.

Dividend growth you can count on

Next generation energy (New York Stock Exchange: NEE) It is an incredible dividend stock to own at any time because it provides the stability that utility stocks bring (which is highly sought after during the recession) and the strong growth potential that can enhance your portfolio.

NextEra̵

7;s core business includes two power companies that provide electricity to 5 million customers in Florida. This is a typical utility company whose revenue is regulated and its cash flow is stable.

NextEra’s clean energy business NextEra Energy Resources is where the growth potential lies-it is already the world’s largest producer of wind and solar energy. Expanding its clean energy investment portfolio will reduce costs and increase the company’s profitability, thereby supporting strong dividend growth in the coming years.

Economic uncertainty ahead sign against a stormy background.

Image source: Getty Images.

In the past, NextEra’s dividend grew at a compound annual growth rate of 9.4% between 2004 and 2019, thanks to its adjusted annualized earnings per share (EPS) growth of 8.4%. Historically, NextEra’s dividend growth is almost in line with earnings, which means that management’s mid-term financial goal is to increase the adjusted earnings per share by a high single-digit percentage by 2023, after which similar dividends should be made improve.

In fact, this trend should continue beyond 2023, because with the increasing popularity of clean energy, the renewable energy industry is expected to attract trillions of dollars in investment in the coming decades. NextEra stands ready to take advantage of any opportunity-the renewable energy backlog in the latest quarter exceeded 15 GW, which is larger than the company’s existing renewable energy generation capacity. If you let NextEra’s moderate dividend yield of 1.9% deter you, you may miss a stable potential stock price increase supported by dividend growth.

Economic recession won’t hurt this company

Waste connection(New York Stock Exchange: WCN) Business makes it the best recession-resistant stock you can find. It’s simple: Whether it’s prosperity or recession, we will never stop generating waste, and let waste management companies such as Waste Connections almost always be busy. As evidence, although the COVID-19 pandemic has disrupted business due to lock-in, Waste Connections expects revenue in the last quarter of 2020 to be $5.33 billion, a decrease of only 1% from 2019. The company expects to generate $1.6 billion worth of operating cash flow at the midpoint of this year.

Thanks to the flexibility of income and cash flow, Waste Connections always returns a large part of its cash flow to shareholders in the form of dividends. In October last year, its dividend increased by 15.9%, the 9th consecutive year that it has increased its dividend. The press release said: “The board intends to review quarterly dividends in October each year, and its long-term goal is to increase the amount of dividends.” By the time this article was published, I believe Waste Connections should have announced its tenth annual dividend increase.

Management’s goal is not only to pay dividends, but to increase dividends in the long run, which should bring generous returns to shareholders as in the past.Few people know the incredible stock performance of Waste Connections: by reinvesting dividends, the stock has gained 522% in the past ten years, greatly surpassing industry leaders Waste management. Although past performance does not guarantee future returns, the durability and flexibility of Waste Connections dividends is undisputed even in difficult times.

High yield you will like

Infrastructure companies are far from resisting recession, but Brookfield Infrastructure (New York Stock Exchange: BIP)(New York Stock Exchange: BIPC) This is a good exception, thanks to its business scope and portfolio. Moreover, it is also the vast majority of dividend stocks.

Brookfield owns and operates assets in the utilities, transportation, data and energy sectors. Since the cash flow of most assets is regulated or contracted in accordance with long-term fixed-rate agreements, the economic downturn may not hit Brookfield that much. Moreover, over the years, its stable, predictable and stable cash flow has easily supported strong dividends. Between 2009 and 2020, Brookfield’s dividend grew at a compound annual growth rate of 11%. This has brought substantial returns to shareholders.

BIP diagram

BIP data is provided by YCharts.

Brookfield’s long-term goal is to increase dividends by 5%-9% annually on the basis of regular asset rotation. Brookfield usually acquires valuable assets, operates them profitably, and regularly sells mature assets to reinvest the proceeds. The company is currently focusing on high-growth areas such as 5G technology-it recently acquired 135,000 telecom towers from India’s largest conglomerate for about $600 million to enter the huge addressable telecom market.

Focusing on growth areas and mature business models, Brookfield Infrastructure is an ideal choice for investors who seek wealth-rich dividend growth during periods of prosperity and reliable dividends during recessions. The stock’s current yield is 4.3%.




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