3 Dividend Stocks That Thrive in Market Crashes

Stock market crashes are an inevitability. Here are a few dividend stocks to see you through the next one.

It’s a cold, hard truth that stock market crashes happen. And while true long-term investors shouldn’t pay market movements any heed, the fact of the matter is, even the most tough-minded investor inevitably falls prey to fretting over their portfolios when a crash finally does arrive. One of the ways to combat this, and generate valuable capital with which to buy stocks if and when a crash does happen, is by owning dividend-paying stocks. For reasons detailed below, Atmos Energy (NYSE:ATO)Brookfield Infrastructure Partners (NYSE:BIP), and Wal-Mart (NYSE:WMT) are three great picks to get Foolish investors started.

Riding out the last crash with ease

Sean O’Reilly (Atmos Energy): They say a rising tide lifts all ships. But, as is often discovered during a market crash, a sinking tide has the opposite, devastating effect, dragging down the most storied of stocks. Fortunately, thanks to their business models, there are a few stocks that held up amid the turmoil of the 2008 financial crisis. One of these, my pick for a stock that thrives in market crashes, is Atmos Energy Corporation. Almost a decade ago, the 2008-2009 crash sent the S&P 500 down over 60% from its highs. Atmos Energy, a Dallas, Texas-based natural gas distributor, saw its shares fall a mere 20% during the market’s darkest days in spring of 2009.

Atmos is one of the largest natural-gas distributors in the country, and its primary assets are natural gas pipelines and storage facilities. If this sounds like an incredibly stable, profitable business, that’s because it is. Atmos acts as a toll collector, serving 3 million natural gas distribution customers across nine states. In its home state of Texas, Atmos Energy operates one of the largest intrastate natural gas pipeline networks.

Since the depths of the Great Recession, the company has continued humming along, rewarding investors with a steadily increasing share price and dividend payouts. Because of its inherent stability, and well-known status as a crash-resilient stock, its dividend yields just 2.1% — decent in a world where 30-year Treasury Bills yield 2.8%. Its dividend has also grown from $1.3 per share in 2008 to an estimated $1.8 per share this year.

With a respectable dividend, rock-solid business as a toll collector for the transportation of natural gas, and a stock that held up remarkably well during the last stock market crash, Atmos Energy is a fantastic pick for investors looking for safety.

Being greedy when others are fearful

Matt DiLallo (Brookfield Infrastructure Partners): One of Warren Buffett’s notable investment quotes is that investors should “be fearful when others are greedy and greedy when others are fearful.” While many try to follow that advice, one management team that takes it to heart is Brookfield Infrastructure Partners. The company has a history of making game-changing acquisitions during market crashes, which then position it to increase distributions to investors at an even faster rate in subsequent years.

For example, during the 2008-2009 financial crisis, the company invested $1.1 billion in Babcock & Brown Infrastructure after the Australian owner of transport, energy, and utility assets nearly collapsed under the weight of its debt. That transaction diversified Brookfield’s portfolio and provided it with new platforms for growth, which helped drive double-digit cash flow and distribution growth in the years that followed.

More recently, the company took advantage of Brazil’s economic cash by investing $1.3 billion in acquiring a stake in one of the country’s largest natural gas transmission systems for a bargain price. The deal has already paid an immediate dividend by enabling the company to increase shareholder distributions 11% this year, well above its forecast for 5% to 9% annual growth.

That experience in taking full advantage of challenging times is why investors will be glad to have Brookfield Infrastructure Partners in their portfolios the next time the market takes a nosedive.

Shopping while the market’s dropping

Keith Speights (Wal-Mart): To be honest, most stocks will be dragged down in a massive market meltdown. “Thriving” in a market crash is relative. One stock that has weathered past downturns much better than most is Wal-Mart.

Back during the economic crisis of 2008, Wal-Mart stock actually finished the year up nearly 20%. That number is a little misleading, though: The big retailer’s stock had been up 35% a couple of weeks before the overall market went into a free fall. Still, Wal-Mart handily outperformed most stocks on the market. And finishing up in a year like 2008 is quite an achievement.

So, why was Wal-Mart able to fare better than others? One reason is that people still shop at its stores regardless of what the stock market does. Perhaps more importantly, investors know that people will keep shopping at Wal-Mart. Because of this awareness, Wal-Mart stock is less likely to be sold in the heat of a market crash than stocks of companies more sensitive to the underlying reasons behind the crash. I suspect this will still be the case for Wal-Mart whenever the next major market plunge occurs.

However, is Wal-Mart a smart pick for good times? I think so. Its dividend yield of 2.55% is a big plus. The company has also adjusted nicely to the new realities of online commerce. I expect Wal-Mart to enjoy solid growth over the next few years. This stock is a good one for when the market is dropping — and when it’s popping.

Forget Wal-Mart Stores: These are the best dividend stocks to buy now
If you’re looking for solid income from dividend stocks, look no further. The Motley Fool’s top dividend analyst, who leads our dividend stock newsletter, Income Investor, just picked what he believes are the best income stocks in the market right now… and Wal-Mart Stores didn’t make the list!

These dividend cash cows could be the latest in a long string of market-beating stocks Income Investor has picked over the years.

Click here to get access to the full list!

Keith Speights has no position in any of the stocks mentioned. Matthew DiLallo owns shares of Brookfield Infrastructure Partners and has the following options: long January 2019 $55 calls on Wal-Mart Stores and short January 2018 $72.50 calls on Wal-Mart Stores. Sean O’Reilly has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Infrastructure Partners. The Motley Fool has a disclosure policy.

This Stock Could Be Like Buying Amazon in 1997
Imagine if you had bought Amazon in 1997… a $5,000 investment then would be worth almost $1 million today.

You can’t go back and buy Amazon 20 years ago… but we’ve uncovered what our analysts think is the next-best thing: A special stock with mind-boggling growth potential.

With hundreds of thousands business customers already signed up, this stock has been described as “strikingly similar to an early Amazon.com.”

Learn more

You May Also Like

Surfside luxury condo sees notable sales

Arte at Surfside is making waves. There’s, of course, the news that Ivanka Trump and Jared Kushner are renting at the 16-resident luxury condominium. And there’s the December penthouse sale

Up in the Air: A Discussion

In a dynamic region where residents are typically on the move, everyone is wondering about the health of the airline industry and the safety of airports and airplanes. Everyone is

South Florida Yachting Legend Passes

Robert “Bob” Roscioli, an icon in the South Florida marine industry, has passed away. Many recognize the name Roscioli from the widely-successful and world-renowned Roscioli Yachting Center, a full service

Four key steps

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] What a crazy time we are all experiencing. Right now, getting back to basics is most important. It is not and

Other Posts

Pandemic adds to worries about hurricane season

An above-normal 2020 Atlantic hurricane season is expected, according to forecasters with NOAA’s Climate Prediction Center, a division of the National Weather Service. The outlook predicts a 60% chance of

The difference between leading and managing

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] Leadership and management are often misunderstood as one in the same. They are not. Certainly, a good leader should be able

Flattening the housing curve in a pandemic

By Josh Migdal In the classic film Groundhog Day (and yes, it is a classic), Bill Murray’s character wakes up over and over again in Punxsutawney, Pennsylvania, reliving the same

Putting Hate in its place

[vc_row css_animation=”” row_type=”row” use_row_as_full_screen_section=”no” type=”full_width” angled_section=”no” text_align=”left” background_image_as_pattern=”without_pattern”][vc_column width=”2/3″][vc_column_text] Photography by Eduardo Schneider There are days, by his own admission, when the seemingly never-ending battles against hate, discrimination and extremism

Drew Limsky

Drew Limsky



Drew Limsky joined Lifestyle Media Group in August 2020 as Editor-in-Chief of South Florida Business & Wealth. His first issue of SFBW, October 2020, heralded a reimagined structure, with new content categories and a slew of fresh visual themes. “As sort of a cross between Forbes and Robb Report, with a dash of GQ and Vogue,” Limsky says, “SFBW reflects South Florida’s increasingly sophisticated and dynamic business and cultural landscape.”

Limsky, an avid traveler, swimmer and film buff who holds a law degree and Ph.D. from New York University, likes to say, “I’m a doctor, but I can’t operate—except on your brand.” He wrote his dissertation on the nonfiction work of Joan Didion. Prior to that, Limsky received his B.A. in English, summa cum laude, from Emory University and earned his M.A. in literature at American University in connection with a Masters Scholar Award fellowship.

Limsky came to SFBW at the apex of a storied career in journalism and publishing that includes six previous lead editorial roles, including for some of the world’s best-known brands. He served as global editor-in-chief of Lexus magazine, founding editor-in-chief of custom lifestyle magazines for Cadillac and Holland America Line, and was the founding editor-in-chief of Modern Luxury Interiors South Florida. He also was the executive editor for B2B magazines for Acura and Honda Financial Services, and he served as travel editor for Conde Nast. Magazines under Limsky’s editorship have garnered more than 75 industry awards.

He has also written for many of the country’s top newspapers and magazines, including The New York Times, Washington Post, Los Angeles Times, Miami Herald, Boston Globe, USA Today, Worth, Robb Report, Afar, Time Out New York, National Geographic Traveler, Men’s Journal, Ritz-Carlton, Elite Traveler, Florida Design, Metropolis and Architectural Digest Mexico. His other clients have included Four Seasons, Acqualina Resort & Residences, Yahoo!, American Airlines, Wynn, Douglas Elliman and Corcoran. As an adjunct assistant professor, Limsky has taught journalism, film and creative writing at the City University of New York, Pace University, American University and other colleges.