With the COVID-19 outbreak shutting down many parts of the economy, it seems almost certain that we'll enter a recession. What's not yet clear is how deep it will be or how long it will last. What we do know is that financially weaker companies will struggle with the challenges ahead. That's already evident as several have slashed their dividends to shore up their financial foundations. Many more will likely follow.

While lots of dividends won't survive this downturn, several companies have the financial fortitude not only to continue paying their dividend but also to keep growing them. Three where that should be the case are utilities American Water Works (NYSE:AWK)Brookfield Infrastructure Partners (NYSE:BIP)NextEra Energy (NYSE:NEE). That's why investors should look to scoop up shares of these companies, especially if they keep selling off during a recession.

A money bag with the word dividends written on it.

Image source: Getty Images.

Stable revenue streams

American Water Works is the largest publicly traded water and wastewater utility in the country. It delivers water services to more than 15 million people in 46 states. That business provides the company with very stable revenue streams since government regulators set the rates it charges, and demand tends to remain relatively steady. While some of its customers might struggle to pay their water bills if they lose their jobs during a recession, it's unlikely to have a major impact on its financial situation. 

American Water Works compliments its stable revenue with a strong financial profile. It has one of the highest credit ratings in the utility sector and a conservative dividend payout ratio of between 50% to 60% of its earnings. That combination of retained cash and balance sheet strength leads American Water Works to believe it can invest between $8.8 billion and $9.4 billion through 2024 to expand its operations. That investment level should support 7% to 10% annual earnings growth along with similar increases in its dividend. That's an attractive growth rate for such a low-risk stock.

A recession-resistant portfolio

Brookfield Infrastructure operates a portfolio of stable businesses, including utilities and energy, transportation, and data infrastructure assets. The company's global portfolio generates relatively steady income since fee-based contracts and regulated rates support about 95% of its annual earnings. While volumes at some of its businesses -- mainly its ports and toll roads -- will decline, a recession shouldn't have a major impact on its earnings.

Brookfield can weather that storm since it has a strong financial profile. That includes a conservative dividend payout ratio of between 60% and 70% of its cash flow, which provides it with a nice cushion. Meanwhile, it has an investment-grade balance sheet and lots of liquidity -- cash and borrowing capacity -- that it can use to fund organic growth and acquisitions. 

The company has a knack for making needle-moving deals during periods of market turbulence. For example, it took advantage of both the Financial Crisis of 2008/2008 and Brazil's economic and political turmoil in 2016 to make acquisitions that helped supercharge its growth in the years that followed. Even without making deals this time around, Brookfield believes it can grow the dividend by 5% to 9% per year over the long-term, making it an ideal stock to buy during these uncertain times.

Clean powered growth

NextEra is one of the largest electric utility companies in the country, as well as the world's largest producer of power from the wind and sun. Each of the company's businesses generates stable income, either backed by regulated rates or fee-based contracts.

The company pays out less than 70% of its earnings via its dividend, which is a conservative level for a utility. On top of that, it has one of the highest credit ratings in its peer group. These factors give it the financial flexibility to continue expanding its utilities and renewable energy business. In NextEra's view, it can grow its earnings by 6% to 8% per year through 2022, while increasing its dividend by an even faster 10% annual pace during that timeframe. While a recession might cause it to grow toward the low-end of its range, that's still an attractive rate for a utility.

The strength to ride out this storm

A significant economic downturn from the COVID-19 outbreak will likely have some impact on most companies, even these three top-tier utilities. However, thanks to their stable revenue streams and financial strength, it probably won't affect their ability to continue paying dividends. That's why investors should take advantage of market sell-offs that will likely continue occurring during the recession to lock in higher yields on these high-quality dividend payers.