3 dividend-paying stocks to buy if the US enters a recession

Given the persistence of high inflation, the Fed will likely announce another aggressive interest rate hike this week. Amid growing recession concerns, investing in high-quality dividend-paying Walmart (WMT), Pfizer (PFE) and Cigna Corporation (CI) could help generate a steady stream of income. Read more….

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The higher-than-expected inflation numbers bolstered the view that the Fed will raise interest rates by at least 75 basis points at its meeting this week. Analysts fear the Fed may tighten too much and tip the economy into a recession.

The World Bank predicts that the world could be heading for a global recession as the three largest economies, the United States, China and the Eurozone, experience a slowdown. The United States has already recorded two consecutive quarters of declining GDP.

Therefore, investing in fundamentally strong dividend-paying stocks Walmart Inc. (WMT), Pfizer Inc. (PFE), and Cigna Corporation (CI) might be a good idea to ensure a steady stream of income, as a recession should be inevitable.

Walmart Inc. (WMT)

WMT conducts retail and wholesale business worldwide. The Company operates through its three major segments: Walmart U.S.; Walmart International; and Sam's Club. It operates several stores and e-commerce sites.

On September 7, WMT and UnitedHealth Group (UNH) announced an initial 10-year collaboration to provide affordable health services. The collaboration is expected to begin in 2023 with 15 Walmart Health locations in Florida and Georgia and is expected to expand to new geographies over time.

On August 30, 2022, WMT began recruiting Canadian-based sellers to join its flagship market in the United States and serve a growing base of monthly online shoppers. The company also said it is focused on growing its markets in Canada and the United States and investing in new tools and services for sellers.

In February, WMT declared an annual dividend of $2.24 per share to be paid in four quarterly installments of $0.56 per share. Its annual dividend yields 1.68%. The company's dividend payouts have grown at a CAGR of 1.9% over the past three years and at a CAGR of 1.9% over the past five years. The company posts a record 48 consecutive years of dividend growth.

WMT's total revenue was $152.86 billion for the second quarter ended July 31, 2022, up 8.4% year-over-year. Its net income increased 20.4% year-on-year to $5.15 billion, while its EPS was $1.88, up 23.7% year-on-year.

WMT's revenue is expected to grow 4.7% year-over-year to $145.73 billion in its third fiscal quarter ending October 2022. Its consensus EPS is estimated at $1.31 for the same quarter. Additionally, WMT has an impressive surprise earnings history, beating EPS estimates in three of the previous four quarters.

WMT stock has gained 12.6% over the past three months to close its last trading session at $133.19.

WMT's POWR ratings reflect this promising outlook. The company has an overall rating of A, which translates to Strong Buy in our proprietary rating system. POWR ratings rate stocks on 118 different factors, each with its own weighting.

WMT has an A rating for sentiment and a B for growth, stability and quality. It is ranked #8 out of 38 stocks in the A-rated grocery/superstore industry.

Beyond what we have stated above, we have also assigned WMT ratings for Value and Momentum. Get all WMT ratings here.

Pfizer Inc. (PFE)

PFE discovers, develops, manufactures, distributes and sells biopharmaceuticals worldwide. It offers medicines and vaccines in various therapeutic areas. The company serves...