Key Points
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Both of these companies have traits that should allow them to perform fairly well even when the going gets rough.
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They have increased their dividends for a combined 117 consecutive years.
- 10 stocks we like better than Coca-Cola ›
Equity markets have experienced some turmoil in recent weeks. Amid worsening geopolitical tensions, trade wars, and other challenges, some investors feel they have no choice but to withdraw their money from stocks and place it in safer assets. Whether this sentiment will persist and lead to a full-blown market crash is anyone’s guess. However, no matter what happens next, there are plenty of stocks, especially those with solid dividend programs, worth investing in. Here are two excellent examples: Coca-Cola (NYSE: KO) and Walmart (NASDAQ: WMT). Read on to discover why these are great companies to invest in, given the recent market volatility.
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1. Coca-Cola
Whether you’re worried about tariffs or a recession, Coca-Cola is precisely the kind of business to invest in. Let’s consider the former problem first. Although no company is completely insulated from the effects of tariffs, Coca-Cola makes most of the products it sells to U.S. customers within the country. The same is true in other regions. So, the direct impact of import duties on its financial results should be fairly minimal. What about a recession?
Coca-Cola is a leading consumer staples company, a famously defensive sector. The company should continue attracting a decent amount of business even when consumers’ purse strings tighten. That said, Coca-Cola isn’t just a hedge against challenging times. It’s an attractive long-term holding. The company generates consistent revenue and earnings thanks to a deep portfolio of beverages. It also makes a point of innovating and launching new options to stay ahead of ever-changing consumer preferences.
Further, Coca-Cola’s famous brand creates a strong moat, as its highly recognizable logo enables it to attract customers with minimal effort, especially compared to newcomers in the industry. Lastly, Coca-Cola’s fantastic dividend track record is a strong reason to hold the stock in hard times and over the long term. Coca-Cola is a Dividend King, a company that has had at least 50 consecutive years of dividend increases.
The reliable dividend can help smooth out market losses when equities crash. And reinvesting it can also significantly boost long-term returns. Meanwhile, Coca-Cola’s shares are changing hands for just under $77 apiece, as of this writing. That would be money well spent.
2. Walmart
Walmart is another great stock to own in challenging economic times. Although the retail industry is susceptible to tariffs — and retailers are sometimes forced to pass cost increases to consumers via higher prices — Walmart is famous for its EDLP (Everyday Low Price) strategy. The company’s massive scale enables it to negotiate favorable deals with suppliers, which in turn allows it to offer competitive prices to its customers. In an environment where retailers have little choice but to raise prices, Walmart typically remains one of the cheapest options, allowing it to continue attracting a fair number of shoppers.
Walmart also has one of the largest e-commerce presence in the U.S. The company’s online business — Walmart is one of the cheapest e-commerce retailers — has been an important growth driver in recent years.
Another relevant aspect of Walmart’s business is its ubiquity. The company has a massive retail footprint, with about 90% of U.S. residents living within 10 miles of one of its stores. Being close to so many customers makes Walmart a convenient option, while also allowing it to offer cheap (sometimes free) and fast shipping through its e-commerce business. All these are excellent reasons Walmart should navigate the next recession fairly well and continue delivering attractive returns long after.
Lastly, Walmart is an attractive dividend stock. It’s also a member of the Dividend Kings, given its 53 consecutive years of dividend increases. Investors looking for stocks to stabilize their portfolios in these troubled times can safely pick this one. And shares are trading for just about $127 each.
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Prosper Junior Bakiny has positions in Walmart. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
