Things are getting a bit dicey out there. Stubbornly persistent inflation continues to take a toll on the economy, and stomach-turning volatility has reappeared in the financial markets.
Against this backdrop, it would be understandable for you to want to hide your money under your mattress. (Or perhaps in an FDIC-insured bank account yielding 5%.) Things are downright scary in the markets. But if you wait for the situation to get better, you might miss most of the gains.
Sadly, the stock market is unlikely to provide you with an all-clear signal that'll let you know when it's time to buy. But with the following dividend stocks, you don't need one. These three stalwart businesses are built to survive and thrive during tough times. They can help you protect and grow your wealth in both bull and bear markets. And all three of these elite stocks are solid buys right now.
Walmart
A focus on value and a reputation for "everyday low prices" are serving Walmart (WMT -0.08%) well in the current challenging economic environment. Consumers who have seen their budgets dented by inflation are increasingly turning to the discount retailer in search of bargains.
Walmart accounts for roughly 25% of the $850 billion U.S. grocery market. As the nation's leading grocer, the retail giant is also benefiting as inflation and other economic pressures drive more people to prioritize food and other household essentials in their spending. That's enabled Walmart to take market share from rivals that are more focused on discretionary purchases.
Not one to rest on its laurels, Walmart is pressing its advantages. The retailer is investing in artificial intelligence-powered automation technology to make its massive fulfillment network more efficient. It's expanding its third-party merchant network to bolster its fast-growing e-commerce operations. And it's rolling out new ad formats to fuel the growth of its high-margin advertising business.
These promising initiatives should help to boost Walmart's sales and expand its profit margins, which, in turn, ought to result in higher dividends for shareholders. Walmart's shares currently yield 1.4%. The retail titan has increased its cash payout to investors for an incredible 50 straight years.
Waste Management
If you're concerned that we could be headed toward a recession, take a look at WM (WM -1.22%). The company formerly (and aptly) known as Waste Management is the leading provider of waste solutions in North America. Whether the economy is headed for a boom or a bust, people will still need their garbage collected and disposed of properly. WM is well positioned to turn this trash into cash for its investors.
WM owns and operates an extensive network of collection stations, landfills, and recycling facilities. Stringent regulations and stiff homeowner opposition make it tough to open new waste sites. This helps to insulate WM from competitive threats and gives it pricing power. WM has thus been able to raise prices above the rate of inflation, which has helped to preserve its profit margins.
With its earnings protected from the competition and the ravages of inflation, WM is free to reward its shareowners with steadily growing dividends and bountiful stock buybacks. WM's shares currently yield 1.7%. The trash titan has raised its cash payout to investors for 20 straight years.
JPMorgan Chase
If you're a little more optimistic about the long-term direction of the economy, consider JPMorgan Chase (JPM 0.06%). The largest U.S. bank by assets is set to profit handsomely when the economy strengthens, while still paying sizable dividends to its shareholders in the meantime.
U.S. gross domestic product (GDP) -- the market value of all goods and services produced in the country -- grew a surprisingly strong 4.9% in the third quarter. This growth bodes well for demand for loans and other financial services. It should also help to keep default rates relatively low. But even if the economy slows due to the impact of the Federal Reserve's interest rate hikes or other headwinds, JPMorgan is still well positioned to profit.
CEO Jamie Dimon foresaw the current inflationary environment and prudently prioritized safety and liquidity. Dimon's conservatism bolstered JPMorgan's fortress-like balance sheet and enabled the company to pounce on profit opportunities as they arose. Namely, JPMorgan was able to scoop up nearly all of First Republic Bank's assets and deposits after the troubled financial institution was seized by regulators earlier this year. That acquisition alone is projected to boost JPMorgan's net income by more than $500 million annually.
Looking ahead, Dimon has the banking giant positioned to succeed despite the challenges that may come its way. JPMorgan's hefty cash reserves and prudent risk management should allow it to continue to reward its shareholders with sizable cash dividends in the coming years. JPMorgan's shares currently yield a solid 3%.
