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The S&P 500 is up nearly 13% amid a massive crisis, but you should never be complacent with the current environment. Instead, I’ll continue to stock up on Dividend Aristocrat shares general mobility (NYSE:GD | gd price prediction), Fastenal (Nasdaq: fast)And PepsiCo (NASDAQ:PEP). Buying these now can prepare you for any unexpected downturn in the future.
And if the Strait of Hormuz remains closed, such a recession is almost certain. Even though it opens today, the market is very optimistic about the long-term results. It will take several months to ramp up to full production, and we haven’t been able to do that yet Even to see the wave of inflation expected from higher oil prices.
Thus dividend stocks are an important asset that you should always keep in your portfolio. If you are a seasoned investor, it is even more important to keep your portfolio in line with security.
Let’s take a look at why each of the following Dividend Aristocrats is worth stocking up on instead of SPY.
General Mobility (GD)
There will always be demand for General Dynamics, even more so In the coming years. I won’t let the recent decline fool me And Instead use this as an opportunity to save. GD stock is down 9% year to date and is down about 15% from its peak. Defense contractor stocks have paradoxically seen double-digit declines over the past few months, but the long-term outlook is very bright.
President Donald Trump has proposed a $1.5 trillion defense budget for fiscal year 2027. At least, I would hope at least $1.2 trillion to go to the Pentagon (base). It is necessary not only to restock war material also create A big store. If Iran managed to eliminate one substantial amount In two months the US stockpile should be far larger than anything in the Pacific.
General Dynamics is deeply integrated into aerospace manufacturing, munitions and other defense products. I expect a significant portion of the defense budget to flow to GD in the Gulf, Europe and the US border.
Once this is correct, you get a dividend yield or 1.91%. GD has recorded 31 consecutive years of dividend growth to its credit.
fastenal (fast)
This company has a long-term history of outperforming the S&P 500 and doing so While paying a high dividend yield. Its performance has been better during recessions many times before. The stock has climbed 75% over the past 5 years, although it is currently down 10% from its high.
Fastenal is involved in industrial and construction supplies. This is an emerging area as onshoring and reshoring trends keep pounding. company expected Its revenue growth will almost double in the coming years. of fastenal 3-year average sales growth was 5.5% annuallyBut it is expected to reach about 9% in the next 3 years.
EPS growth is expected to reach 10.4% annually, up from less than 5% annually over the past 3 years. These numbers may seem small, but the company has historically traded at a premium how sticky Its sales and margins Are. Industrial and construction demand is unlikely to disappear any time soon. Whatever happens, if the government puts more support behind re-industrialization then you can expect higher than expected growth.
Fast stock gives you a 2% dividend yield with a 3-year dividend growth rate of 12.2% annually. The debt has been paid off faster, falling from $802 million in 2022 to $446 million in the first quarter of 2026, compared with $309 million in cash. Once this loan is paid off, you could see even more dividend growth.
PepsiCo (PEP)
The longer your investment horizon, the more attractive PEP stock becomes. This company has historically kept Above with huge comrades, and I believe it still has what it takes Keep perform better The last few years have been difficult due to GLP-1 fears, but PepsiCo’s sales never declined significantly. The problems are mostly margin related, where PepsiCo is making slow but steady progress.
I would actually blame interest rates for most of its problems. one time interest rates ultimately come down and bring down treasury yield Together with itPEP stock is looking a lot more attractive. You get a steadily growing business with a dividend yield of 3.7%.
analysts see One up 11.1% Possibility over the next year, but I believe PEP stock is well positioned to outperform those expectations. The stock is down 21.4% from its high and suffered $1.1 billion in net interest loss last year. Eventually there will be a rate cut and PEP stock will be back on track.