3 High-Yield Dividend Stocks for Market Crash Protection (2024)

Find out which high-yielding dividend stocks can protect your portfolio from a market crash.

3 High-Yield Dividend Stocks for Market Crash Protection (1)

Dividends are a controversial topic in the investing world. While some investors build their portfolios around them, others will tell you it is a wasted effort better spent elsewhere. However, the one thing we can all agree on is that most dividend-paying stocks can defend your portfolio against sudden market volatility or even a crash.

While dividend-paying stocks might not provide the high potential gains of growth stocks, they offer stability even when the markets are turbulent. On top of portfolio defense, they also pay out cash dividends which can be re-invested, stockpiled or used to finance real-life costs. These three stocks stand out as being industry leaders with long histories of paying lucrative dividends to their shareholders.

High-Yield Dividend Stocks for a Market Crash: Exxon Mobil (XOM)

Exxon Mobil (NYSE:XOM) is the largest American oil and gas company by a wide margin and recorded annual revenue of more than $334 billion in 2023. The stock has an average analyst price target of $122.88 and a street-high target offering a 15% upside from its current price.

While XOM may not pay the highest dividend yield, it is one of the safest distributions on the market. Exxon has raised its dividend for 41 consecutive years, making it a true Dividend Aristocrat. The 3.17% yield is higher than the average yield of S&P 500 companies, and the 41% dividend payout ratio ensures a high probability that Exxon will continue to raise its payout moving forward.

You might be wondering if you have to pay up for such a secure dividend. Not at all! Exxon trades at just 1.4x sales and 13x forward earnings. This makes Exxon one of the cheapest mega-cap stocks on a price multiple basis. Add in a 5-year net income CAGR of 12%, and it’s easy to see why XOM is one of the best defensive stocks against a market crash.

The Coca-Cola Company (KO)

3 High-Yield Dividend Stocks for Market Crash Protection (3)

Source: Fotazdymak / Shutterstock.com

Coca-Cola (NYSE:KO) is a foundational company in the S&P 500 and is one of the 30 components of the Dow Jones Industrial Average. Coca-Cola has an average analyst price target of $62.58 with a one-year price target range of $56.37 to a street-high price of $69.52.

This stock has always been a favorite of dividend investors. Coca-Cola is a certified Dividend King which means it has raised its dividend for more than 50 consecutive years. Warren Buffett holds a significant stake of 400 million shares of Coca-Cola stock and receives over $736 million in dividends each year. Coca-Cola is one of the most recognized brands in the world and is sold in every country on Earth except Cuba and North Korea.

Coca-Cola has increased its revenue in 13 consecutive quarters and currently trades at just 5x sales. For those wondering about dividend safety, Coca-Cola has a dividend payout ratio of 74%. This is relatively high, but given the company’s long track record of dividend raises, investors should not be concerned about Coca-Cola’s distribution.

High-Yield Dividend Stocks for a Market Crash: Altria Group (MO)

3 High-Yield Dividend Stocks for Market Crash Protection (4)

Source: Kristi Blokhin / Shutterstock.com

Altria Group (NYSE:MO) is an American tobacco company that was established in 1985. It was created as a result of the split of Phillip Morris Companies into Phillip Morris International (NYSE:PM) and Altria. This stock is trading at the low end of its analyst price target range and below the average target of $46.58. The highest price target on Wall Street is $73.00 which implies more than 40% upside from today’s price.

This is another favorite among dividend-seeking investors, as the yield sits at a whopping 9.31%. Like Coca-Cola, Altria is a Dividend King if you include its time as Phillip Morris Companies. The company has raised its dividend for 54 consecutive years and shows no signs of slowing down.

Declining revenue is one red flag with Altria as the company continues to deal with slowing demand for tobacco products. Nonetheless, Altria’s dirt cheap valuation of just 8.3x forward earnings and 3.6x sales make up for this. While Altria’s stock isn’t quite as volatile, it offers a strong 9.3% dividend yield!

On the date of publication, Ian Hartana and Vayun Chugh did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chandler Capital is the work of Ian Hartana and Vayun Chugh. Ian Hartana and Vayun Chugh are both self-taught investors whose work has been featured in Seeking Alpha. Their research primarily revolves around GARP stocks with a long-term investment perspective encompassing diverse sectors such as technology, energy, and healthcare.

Dividend Stocks

3 High-Yield Dividend Stocks for Market Crash Protection (2024)


Top Articles
Latest Posts
Article information

Author: Arline Emard IV

Last Updated:

Views: 6694

Rating: 4.1 / 5 (52 voted)

Reviews: 83% of readers found this page helpful

Author information

Name: Arline Emard IV

Birthday: 1996-07-10

Address: 8912 Hintz Shore, West Louie, AZ 69363-0747

Phone: +13454700762376

Job: Administration Technician

Hobby: Paintball, Horseback riding, Cycling, Running, Macrame, Playing musical instruments, Soapmaking

Introduction: My name is Arline Emard IV, I am a cheerful, gorgeous, colorful, joyous, excited, super, inquisitive person who loves writing and wants to share my knowledge and understanding with you.