You can sleep well at night when you invest in safe dividend stocks that hold up well across economic cycles. In fact, a select few companies have defensive business models that thrive in turbulent markets. These steadfast dividend payers excel at rewarding their investors with reliable and steadily growing cash payouts.
Read on to learn more about two rock-solid dividend stocks that are particularly well suited for today's economic environment.
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Dividend stock to buy No. 1: Walmart
People seek bargains during difficult times. Increasingly, they're going to Walmart's (WMT -0.03%) stores to find them. The discount retail giant's well-earned reputation for low prices is helping it win more sales from price-conscious consumers, a trend that's likely to persist in the coming years.
Walmart's colossal scale provides it with competitive advantages its smaller rivals can't match. With more than 10,000 stores and $680 billion in annual revenue, the retail titan's immense purchasing power enables it to command the best deals from its army of suppliers. Walmart then passes these savings on to its customers.
The discount dynamo is also winning online. Walmart's global e-commerce sales jumped 25% year over year in the quarter ended July 31. Booming demand for delivery and pickup services, as well as a rapidly expanding third-party marketplace, are fueling this impressive growth.
Better still, Walmart is becoming a powerful force in the advertising market. Third-party merchants pay high-margin fees to market their merchandise on Walmart's popular websites. The retailer acquired top-selling smart TV maker Vizio and its SmartCast operating system in December 2024 to further bolster its fast-growing ad business. In all, Walmart's global ad sales surged 46% in its most recent quarter.
Walmart also stands to benefit from advances in artificial intelligence (AI). The company is investing in real-time AI and automation technology to better forecast demand, improve inventory controls, and cut waste. Walmart also partnered with robotics leader Symbotic to strengthen its online fulfillment systems.
With its in-store, e-commerce, and AI initiatives all set to drive profitable growth, Walmart's dividend payments to shareholders should continue to rise steadily in the years ahead.
Dividend stock to buy No. 2: McDonald's
Like Walmart, McDonald's (MCD 0.18%) tends to benefit as shoppers search for better deals. Value-priced meals are front and center on the fast-food leader's menu once again, and increasingly price-sensitive diners are responding in kind.
Flavorful food served fast has always been McDonald's formula for success. But what truly sets the burger titan apart from its competitors is its ability to consistently provide its tasty food at a relatively low cost.
McDonald's is doubling down on that low-cost advantage by bringing back its Extra Value Meals. The combo deals provide savings of up to 15% compared to purchasing the items separately. Value-focused promotions helped to drive McDonald's revenue and per-share profits up by 5% and 11%, respectively, in the second quarter.
While value is fueling sales growth, technology is enabling the restaurant chain to cut costs. McDonald's intends to ramp up investments in AI in the coming years. The fast-food leader is working with Alphabet's Google Cloud to bring advanced edge computing tech to its more than 44,000 stores. These AI-powered tools are expected to improve order accuracy, minimize equipment downtime, and streamline administrative tasks for managers.
McDonald's AI investments should help make its lucrative franchise-based strategy even more profitable. With operating margins that are already consistently above 45%, and per-share earnings growth of 12% in its most recent quarter, the dividend stalwart should have little trouble extending its remarkable 48-year streak of annual payout increases.
