Recession Proof US Shares worth researching Part 2

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Recession Proof US Shares worth researching Part 2

Published Date: 2018-11-01 | Source: Share Picks USA | Author: Bruce Ingram | Comments

Recession Proof US Shares worth researching Part 2

As in part 1 of this series found here, the shares listed below meet the following criteria:

  • Low probability that the dividend is at risk
  • Paid dividends for more than 20 years
  • Average annual dividend growth is more than 5% for the last 20 years
  • Growing Dividends (more than 5% last year)
  • Dividend Yield between 2.0% to 7.5%
  • Must have generated free cash flow 7 out of the last 10 years
  • Increased or at least maintained its dividend through the last financial crisis between 2007-09
  • Current dividend is above its 5-year average yield (could indicate the share is undervalued)
  • Dividend Pay Out Ratio is less than 75% (Indicating the company is retaining sufficient capital for re-investment)
  • Average return during the 2007-09 recession was equal to or higher than the S&P 500

Ticker Name % Above 5-Year Average Dividend Yield Dividend Yield 1 Year Dividend Growth Uninterrupted Dividend Streak (Years) Recession Dividend Recession Return % Annual ROR forecast next 2 years
APD Air Products 18.00% 2.90% 9.40% 25 Increased 52% 15%
GIS General Mills 42.00% 4.40% 7.90% 27 Increased -12% 22%
HD Home Depot 11.00% 2.30% 25.00% 30 Maintained -44% 21%
KO Coca-Cola Company 6.00% 3.40% 5.70% 26 Increased -31% 7%
PSA Public Storage 19.00% 4.10% 9.60% 25 Maintained -38% 13%

APD - one of the world's largest providers of atmospheric gases (oxygen, nitrogen, argon, and rare gases), as well as process and specialty gases (hydrogen, helium, carbon dioxide, carbon monoxide, syngas)

GIS - sells a diversified mix of packaged meals, cereal, snacks, baking products, yogurt, and more. The company's largest brands are Cheerios, Betty Crocker, Yoplait, Pillsbury, Nature Valley, Old El Paso, and Haagen-Dazs. Recently GIS acquired Blue Buffalo a natural pet food company. As this acquisition created significant debt for GIS and in order to reduce this debt it has frozen its dividend at current levels. Frozen or reduced dividends are normally a red flag for me. I would recommend a detailed research into this company before purchasing.

HD - is the world's largest DIY hardware and home improvement retailer. It operates through 2,200 stores in North America including Mexico.

KO - is Coca Cola It markets over 3,900 products in over 200 countries. A good global company to invest in.

PSA - is the largest Self-Storage company in the USA. PSA owns over 2,500 properties in in USA as well as in 6 European countries. The company also rents out space to small and mid-sized businesses.

All of the above companies either maintained or increased their dividends during the 2007-09 recession. Their share price equalled or performed better than the S&P 500 index. They have paid uninterrupted dividends for more than 25 years.

If you are looking for Blue Chip, dividend paying, US shares that will most likely perform better than the S&P 500 index during a market downturn, these shares are worth further research.


Disclaimer: Please note that I am not a Registered Financial Planner. The articles I write are based on my own personal research and for my own use and is not to be construed as financial planning advice. At all times readers are urged to exercise caution when investing in any financial instruments, to do their own research


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