10 Dividend Stocks That Will Survive the Next Recession

No matter whether you are retired or planning for retirement, peace of mind is really the very best reward.

That means receiving a reliable stack of dividend checks no matter what else is going on. Investors can learn more about how to live off dividends in retirement here.

To help you in this process, here are 10 quality, recession-beating stocks that have delivered very reliable dividend income for many years.

Each of these stocks weathered the financial crisis well and yields more than 2%. A handful of these companies is held in our Conservative Retirees dividend portfolio for this reason.

Let's get started with a Big Mac.

1. McDonald's (MCD)

There are now more than 36,525 restaurants worldwide displaying the iconic golden arches. Some 30,081 are franchised, which means the company owns only 18% of the total.

There are still markets such as China that McDonald's has not fully tapped, so there it still hope for growth.

In an industry known for changing and fickle consumer tastes, McDonald's mere survival is a measure of management dedication and quality.

Fast and affordable food served under high standards of cleanliness from convenient locations; this has been McDonald's formula from the beginning. When the economy is weak, these attributes attract a bigger share of customers.

During the financial crisis McDonald's sales declined 3%, but the company's strong balance sheet allowed it to increase its dividend, which has grown every year since 1977. The stock's defensive qualities also showed in its 5.6% gain in 2008. The S&P 500, by comparison, fell 38% that year.

McDonald's current dividend yield of 3.0% and expected dividend growth of 10% makes McDonald's one of the more notable Dividend Aristocrats, a group of S&P 500 companies that have raised their dividends for at least 25 straight years.

The annual payout is $3.56 per share right now. The dividend has been growing 17.8% per year over the past decade and 8.8% annually over the past five. The payout ratio, at 69% of EPS and 70% of free cash flow, could easily be increased given the balance sheet strength and nearly $4.57 billion in free cash flow.

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