3 Recession Proof Stocks with Low Volatility

PUBLISHED Dec 13, 2022, 1:30:43 PM        SHARE

imgDividend Power Blog

3 Recession Proof Stocks with Low Volatility.

The world is experiencing a wide range of macro troubles right now. These problems include the ongoing war in Ukraine, lockdowns in China, as well as rising inflation and interest rates. As a result, there is an increased likelihood of a recession down the road. Moreover, there are already multiple signs that the economy is slowing down.

Investors who prepare their portfolios for a recession might want to look for low-beta stocks that have proven resilient versus economic downturns in the past. Some business models are less cyclical than others, and earnings and dividends are better protected when one invests in these recession proof stocks.

On top of that, some stocks are less volatile than others, which is especially valuable during recessions. ‘Beta’ is usually the accepted measure of volatility. Some stocks are more volatile than the market in downturns, those with a beta of more than 1. In contrast, others are less volatile than the market as a whole, those with a beta of less than 1.

Investing in recession-resilient companies with a low beta can be a good idea in the current environment, which is why we will showcase three such companies in this report.

recession proof stocks

3 Recession Proof Stocks with Low Volatility


If you are interested in investing in stocks that pay dividends I recommend signing up for the Sure Dividend Newsletter*. It is a good value and one of the best dividend stock newsletters available. There is a 7-day free trial and grace period so it is risk free. The service provides top 10 stock picks each month with discussion of advantages, valuation, and risks. I highly recommend them and use their insights for my own stock research.

3 Recession Proof Stocks


AT&T (T) is a leading telecom company in North America. it is the first pick of our recession proof stocks. Following the spin-off of its media business earlier this year, AT&T has become a focused telecommunications player that offers broadband, wireless service, etc., to customers across the US.

The company used to be a Dividend Aristocrat. Still, following the spin-off of the media business, its dividend was downsized to better align with the now-reduced size of the company. That being said, AT&T’s dividend looks relatively safe right now. The company’s annual payout of $1.11 translates into a dividend yield of 5.8%, with shares trading at $19, which is pretty attractive, both in absolute terms and relative to the broad market’s dividend yield.

AT&T is forecasted to generate earnings-per-share of $2.60 this year, which means that its dividend payout ratio stands at just 43%. This value is a rather low payout ratio for an established company such as AT&T. When we look at free cash flows, the dividend payout ratio is somewhat higher. However, the dividend is still well-covered, as the company’s total dividends this year will come in around $8.5 billion, while AT&T forecasts free cash flows of at least $14 billion. Furthermore, free cash flows should improve to $20+ billion next year, which will improve the coverage ratio and the safety of the dividend further.

During economic downturns, consumers reduce their spending, but they generally don’t get rid of their phones, as those are too integral to our modern way of life. This fact makes for a resilient business model. Moreover, with AT&T’s beta at just 0.5, the company is significantly less volatile than the market, potentially making it attractive as a recession investment.

Portfolio Insight - Dividend Yield History T

Source: Portfolio Insight*

Related Article About AT&T (T) on Dividend Power


Pfizer (PFE) is a pharma major especially prominent for its COVID franchises today. It is among the leading COVID vaccine manufacturers, in cooperation with BioNTech (BNTX), and its COVID treatment drug Paxlovid has also become a significant source of revenue.

On top of its COVID business, Pfizer is also active in many additional areas. For example, it owns oncology assets such as Ibrance for treating breast cancer and a broad drug portfolio in other areas, including vaccines, psychological problems, heart diseases, and many more.

Demand for healthcare products and treatments for ailments is not cyclical. Patients require care whether the economy is doing well or not. That explains why Pfizer has generally seen its business remain resilient during economic downturns in the past, which is also why the company has managed to grow its dividend for well over a decade.

With Pfizer’s beta at just 0.4, it is a very low-volatility stock relative to the broad market. In a recession, investors can expect that Pfizer’s underlying business will remain resilient, and its stock should also outperform in case the market pulls back in a big way. Add a dividend yield of 3.2% — around twice the broad market’s dividend yield and Pfizer looks like an excellent recession pick.

Portfolio Insight - Dividend Growth PFE

Source: Portfolio Insight*


Verizon (VZ) is, like AT&T, a telecommunications company. Due to the reasons mentioned above — consumers still want and need their phones even in a recession — the business is resilient. In addition, most consumers will forego dining out, buying a new TV or car, or going on a vacation before they think about getting rid of their phones.

Verizon currently offers a dividend yield of 6.7%, based on an annual payout of $2.61 per share. A dividend yield this high makes Verizon attractive for income investors. Also, thanks to an 18-year dividend growth track record, making the stock a Dividend Contender, investors can be assured that there is a high likelihood that the dividend will continue to grow.

Verizon’s dividend payout ratio, at just above 50%, is a little higher than that of AT&T, but the dividend payout ratio is not at all worrisome. Verizon will likely continue to pay dividends even in a significant recession. It has done so in the past, e.g., during the pandemic or the Great Recession.

Verizon currently trades at just 7.5X this year’s expected earnings-per-share of $5.20, which makes for a very inexpensive valuation. That should result in further protection versus an economic downturn — an already low valuation will likely not decline much, even in a recession.

Verizon has one of the lowest beta readings in our coverage universe, as its beta stands at just 0.35 right now. This value suggests that Verizon will likely decline significantly less than the broad market if we get another significant equity market decline. Add the total return tailwind from its dividend yield of close to 7%, and Verizon looks like one of the best recession proof stocks to pick at current prices.

Portfolio Insight - Dividend Yield History VZ

Source: Portfolio Insight*

Related Article About Verizon on Dividend Power

Thanks for reading 3 Recession Proof Stocks with Low Volatility!

Disclosure: Members of the Sure Dividend team are long T, PFE, and VZ.

You can also read Best REITs for Safe Income by the same authors.

Related Articles on Dividend Power

Originally Posted on dividendpower.org

PFE, Buy

Pfizer Inc.
Return: -34.32%

PFE, Buy

Return: -34.32%

Sound investments
don't happen alone

Find your crew, build teams, compete in VS MODE, and identify investment trends in our evergrowing investment ecosystem. You aren't on an island anymore, and our community is here to help you make informed decisions in a complex world.

More Reads
Bert’s December Dividend Stock Watch List: 3 Stocks to Buy!

The final month of the year is usually an insane month for the holidays. Family, food, football….its the best! Let’s make sure that December is also going to be an excellent month for dividend investing as well.

META Lesson 1: Corporate Governance

As we get deeper into earnings season for the third quarter of 2022, the biggest negative surprises are coming from technology companies, with the tech giants leading the way.

December 2022 Stock Considerations

With a new trading month already in full swing it is time, once again, to highlight some of my potential stock purchases.

Which Utilities are Investing in Utility Scale Solar?

We've researched the top public utilities in the U.S. to find the definitive leaders in solar power generation

Hershey (HSY): Dividend Stock Review

Hershey (HSY): Dividend Stock Review. As a dividend growth Investor, the best companies to invest in are quality companies with a history of growing revenues and cash flow to enable them to increase their dividends over time.

10 Top Electric Utility Stocks For Reliable Dividends

Utilities are often a favorite of dividend growth investors as they can provide excellent returns and high-income levels.

The Best Utility ETFs for Income Investors

We breakdown the pros and cons of the most popular utility ETFs and rank them by the best ETF for income investors.

Warren Buffett Stocks: Louisiana-Pacific Corporation

Louisiana-Pacific Corporation (LPX) is a leader in high-performance building solutions. The company manufactures engineered wood building products for builders, remodelers, and homeowners across the globe.

The Safest Utility Stocks to Invest in Q4 2022

We found the top 5 safest utility stocks based on volatility, drawdown, dividend policy, and dividend cuts. Why are utilities safe? We'll explain why.

7 High Return-of-Capital REITs

Real Estate Investment Trusts (i.e., “REITs”) are tax-advantaged income vehicles that have become increasingly popular with investors and institutions in recent years.

November 2022 Stock Considerations

With a new trading month already in full swing it is time, once again, to highlight some of my potential stock purchases.

Skyworks Solutions (SWKS) Stock: An Undervalued Chipmaker

Over the past five weeks, the market has been up 14.7%. Also, after the CPI report was issued last Thursday morning, the market and almost all the stocks had a tremendous run-up. In two days, the market is up nearly 7%.

2 Recession-Proof Utility Stocks With Safe Dividends

The Fed has raised the Fed Funds rate six times this year to combat inflation and the last four times at a 0.75% clip. The current 4% rate is the highest in well over a decade. But the Central Bank has indicated that it will take more pain to get that inflation genie back in the bottle.

WestRock (WRK) A Dividend Stock Comeback Story

Yes, this is a random WestRock (WRK) dividend stock, come back story. Why is it a comeback? WestRock decimated their dividend during the height of the pandemic from COVID-19. One of the world’s biggest, packaging companies reduced their dividend to $0.20 per share, per quarter from the high of $0.465.

AEP to Focus Capital Investments on Regulated Businesses, Reaffirms Operating Earnings Growth Rate of 6 to 7 Percent

Reaffirmed 2022 operating earnings guidance range of $4.97-$5.07 per share and midpoint of $5.02; 2023 operating earnings guidance range of $5.19 to $5.39 per share; Five-year, $40 billion capital plan emphasizes investment in wires and renewables

Southern Company - A Buy but Not Without Risks

We assess Southern Company to be a buying opportunity. For retail investors, this may be a good time to dollar-cost average into a position in SO.

Dividend Kings in Focus: V. F. Corporation

V.F. Corporation is a giant in the apparel industry. The company’s annual sales amount to nearly $12 billion, but the company has humble beginnings. It started all the way back in 1899 and has seen many twists and turns in the 123 years since.

October 2022 Passive Income Update – Lower Dividends, Higher Passive Income

The market decided to climb back up this month and then interest rates rose once again. The narrative hasn’t changed both Tiff and Powell have said they aren’t done raising interest rates in previous hikes. Unfortunately Tiff played his cards first hoping Powell would follow suit with a .5% raise and the US raised theirs .75% essentially devaluing our dollar. Inflation for Canadians should rise on this move alone as it now costs us more to buy stuff in usd.

Procter & Gamble Stock: Recession Resistant Dividend Aristocrat

When volatility grips the stock market, as it has this past year, income investors should focus on quality dividend growth stocks.

Dividend Income Summary: Lanny’s October 2022 Summary

This is what dividend investing is all about! Investing in dividend stocks allows YOU to earn dividend income, the best passive income stream! Bias, you better believe it.

Resources for Publishers
Resources for New Investors
Boosted with BossCoin
Financial Literacy Leaders
Tom Hamilton
Wise Intelligent
Mark Robertson
Kevin Matthews II
Akeiva Ellis
Brendan Dale
Kenneth Chavis IV
Sharita Humphrey