3 Dividend-Paying Stocks That Could Help Investors Survive A Crash

You can earn income or supercharge your capital every quarter by investing in these three diverse dividend-paying stocks

Dividend stocks are an essential part of any well-diversified portfolio as they can grow at a compounded rate if you use a dividend reinvestment plan, or DRIP. This allows you to automatically purchase additional shares of the stock, even fractionally, with your dividend payment. On the other hand, you can just collect payments if income is a priority. We present you with three dividend-paying companies that can help shield you should the market crash.

Company Dividend $ Amount Next Payment Date
AAPL 0.205 2/11/2021
WMT 0.55 4/5/2021
KO 0.42 4/1/2021

1. Apple

Apple (NASDAQ: AAPL), the $2 trillion maker of killer hardware like the iPhone and the MacBook, has had a phenomenal quarter in which it saw its highest revenue ever of $111.4 billion, up 21% year-over-year (YoY). The company sells extremely popular products that are owned by at least one billion people and all of them use at least one of Apple’s services. The company’s Services division also saw its highest revenue ever of $15.76 billion, up nearly 24% YoY.

With the recent launch of Apple One, a bundle of services at a lower price point, there is little doubt that this segment will continue to grow and is estimated to reach $100 billion in revenue by 2024. Apple dominates the wearables market with a 30% market share and that’s good news as well because that market is projected to grow to $64 billion by 2024. The company’s dividend yield is roughly .7% because it has grown so much in the last decade; so much so that even Warren Buffett bought 5% of the company for Berkshire Hathaway, a man known to avoid tech companies.

Apple’s 2020 EPS was $3.28 and its dividend payments are expected to be only 24% of this amount. This means that to pay off the full amount to investors, the company can raise dividends annually by 6% until 2045; and that’s assuming the company’s earnings remain flat. Most importantly, however, is Apple’s goal of becoming net cash neutral (it has over $195 billion cash on hand) as this ensures that it will continue to raise dividends and repurchase stock to raise investor value.

2. Walmart

Walmart (NYSE: WMT), the most popular grocer in the U.S. and the number two e-commerce retailer, had a phenomenal year as well with the pandemic providing tailwinds both for its brick-and-mortar offerings as well as its online sales. The company is two years away from becoming a dividend king and is steadily growing its subscription business, Walmart+, to compete with Amazon. Recently, it announced its entry into the fintech world when it partnered with Ribbit Capital and poached two high-level executives from Goldman Sachs

Walmart has amassed a loyal customer base (with 37 million shoppers a day) thanks to its price-match guarantee and it operates over 10,500 stores globally. Already offering financial products like check-cashing and credit cards, the company has a strong indication of customers’ spending habits which will serve it well once it launches its new division in earnest. And with its strong physical presence, it will no doubt be a formidable force in the banking world as well as online. 

3. Coca-Cola

Unlike the other two companies in our list, Coca-Cola (NYSE: KO) was not helped by the pandemic as most of the beverage giant’s sales are from on-the-go drink purchases as well as big venues like concerts and sporting events. Despite falling revenues, however, Coca-Cola made it a priority to maintain its dividend, a dividend that it has raised for the last 59 years. The company has enough money in its coffers (over $10.2 billion cash) not only to pay a dividend but also to invest in ventures like its goal to get a controlling stake in BodyArmor sports drink.

The young company already has 13% of the sports drink market share, close to Coca-Cola’s much older competing PowerAde brand of 16%. Both companies hope that this endeavor will dethrone PepsiCo’s Gatorade market leadership by 2025. In the long-term, the company is abandoning the bottling business to concentrate more on higher-margin licensing and franchising. The company and investors agree that business will rebound and thrive once the pandemic is under control.

A MyWallSt subscription gives you access to over 100 market-beating stock picks and the research to back them up. Our analyst team post daily insights, subscriber-only podcasts and the headlines that move the market. Get your free access now!

MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here