It’s terrifying to see share values plummet. The technology-heavy Nasdaq Composite Index and the bellwether S&P 500 Index have both entered bear markets this year. Such drops emphasize the significance of reinforcing your investing portfolio with stable stocks that will help you sleep well at night.
Such stocks have qualities that allow them to stay robust in the face of the biggest inflation in four decades as well as the threat of a recession. Important characteristics include a strong and identifiable brand name with a significant number of devoted consumers, a track record of increasing dividends, and a history of weathering difficult times. Certain characteristics ensure that these stocks are safe buys even when the market falls.
Here are two examples of such stocks to consider for your investment portfolio.
McDonald’s
McDonald’s (MCD 0.51%) is one of the most recognizable fast-food businesses in the world, with about 40,000 locations in over 100 countries. Apart from supplying its well-known burgers and fries, the firm has also consistently and steadily increased its payouts.
McDonald’s just upped its quarterly dividend by 10% year over year to $1.52 per share, marking the company’s 46th consecutive year of increasing its payout. As McDonald’s continues its excellent track record of returning money to shareholders, these dividend hikes are an excellent way for an income-seeking investor to beat inflation.
Throughout the pandemic, the fast-food behemoth has also been a pillar of support. In 2021, total revenue increased 21% year on year to $23.2 billion. Operating and net income increased by 41% and 59% year over year, respectively, with worldwide comparable sales increasing by 17% across all countries. Despite a 3% year-over-year decline in revenue in the second quarter of 2022, diluted profits per share increased 8% when one-time factors were removed.
These figures show that the McDonald’s franchise and its legions of loyal consumers are boosting revenues and ensuring the company can continue paying out hefty rewards.
PepsiCo
We move on from fast food to the food-and-beverage behemoth PepsiCo (PEP 0.85%). Consumers in more than 200 countries enjoy the company’s extensive choice of food and drinks from brands such as Pepsi-Cola, Lay’s, Gatorade, and Quaker Oats.
Despite the pandemic, the firm reported solid growth since demand for its products remains strong. Revenue jumped 12.9% year over year to $79.4 billion in 2021, while operating wages rose 10.7% year over year to $11.2 billion. Net income increased 7% year on year to $7.6 billion, while PepsiCo generated solid free cash flow of $7 billion in 2021 and $6.4 billion in 2020, respectively.
The trend continued into 2022’s first nine months, with sales climbing 7.7% year over year to $58.4 billion. After adjusting for an unexpected gain and an impairment loss in the nine-month period, operating and net income increased by 4.4% and 6%, respectively, to $9 billion and $6.7 billion.
PepsiCo’s free cash flow creation is still strong, with $3.7 billion generated in the first three quarters of 2022.
Because of its well-known brand names and stable food and beverage sector, the company increased its quarterly dividend by 7% year over year to $1.15 a share. This is PepsiCo’s 50th straight year of raising dividends, and it is now officially on the Dividend King list.
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