Dividend Stocks

3 Dividend Stocks to Buy for a Bear Market

A dividend-paying stock can be a good investment during a bear market. Investing in dividend stocks is an excellent way to increase your income and grow your wealth, as you are paid not just on the initial investment but also on any future earnings.

Investors favor companies with high dividend yields and low price-earnings ratios during a bear market.

We do not know when the latest issues with the economy will get better. The Russian invasion of Ukraine is a longstanding issue and has a massive impact on the global economy. As a result, supply chain issues and inflation will continue to impact the economy for some time.

Therefore, as the economy has been under recessionary pressure since the start of the year, investors are searching for stocks they can trust to make them more money during these tough times. These five dividend stocks will provide a steady income stream throughout the fiscal year and beyond.

Ticker Company Current Price
CVX Chevron Corporation $137.65
LSI Life Storage, Inc. $112.50
T AT&T Inc. $20.57

Dividend Stocks to Buy for a Bear Market: Chevron (CVX)

Source: JL IMAGES / Shutterstock.com

Chevron (NYSE:CVX) is one of the most valuable companies in the world. It is also one of the largest oil companies in the United States. Chevron was founded by John D. Rockefeller and had its headquarters in San Ramon, California.

Chevron is a global energy company that produces and refines petroleum products and chemicals, produces natural gas, and engages in global mining activities. The company also operates retail gasoline stations in North America.

Chevron is a great dividend stock with a 4.1% dividend yield. The oil giant is a Dividend Aristocrat. The company has been paying dividends for 35 consecutive years and has a long history of steady growth and dividend payments.

Due to the price of oil rising exponentially due to current geopolitical tensions, Chevron is having an exceptional 2022. The oil company released its first-quarter earnings report, which shows that it tripled revenue to $6.5 billion from last year. In addition, the company’s cash flow is also exceptionally higher than last year at $8.1 billion. The company has also announced a 6% dividend increase.

It is one of the biggest performers on the Dow Jones Industrial Average, which means it offers good value for investors looking for high-yield stocks for their portfolios.

Life Storage (LSI)

Life Storage (LSI) sign on the side of one of its facilities in Illinois.

Source: Jerry Bergquist / Shutterstock.com

Life Storage (NYSE:LSI) is a real estate investment trust that owns, operates, and manages self-storage units. The company has been around for 25 years and has 1,100 self-storage facilities in the U.S. and Canada. Life Storage is also an investor in other companies that have a similar business model to its own.

Self-storage is a storage facility that provides secure and safe storage for people’s belongings. The main purpose is to store one’s belongings in a secure location while not occupying space in one’s home. Self-storage buildings are usually located on large property lots, which you can build on or beside existing structures or buildings.

Self-storage facilities are a booming business in the United States. The growth of self-storage facilities is progressing at a rapid rate. This growth is attributable to several factors, such as changing lifestyle trends that have led people to have less space for their belongings.

Hence, Life Storage will benefit from these secular tailwinds. Investors are attracted to REITs because of the combination of capital appreciation and dividends. REITs also offer investors a way to diversify their portfolios by investing in businesses they might not otherwise have access to.

Dividend Stocks to Buy for a Bear Market: AT&T (T)

A photo of an AT&T office building.

Source: Roman Tiraspolsky / Shutterstock.com

AT&T (NYSE:T) is the largest provider of mobile phone and broadband internet services in the U.S. It is also the largest provider of fixed telephone services in the United States.

AT&T is now committed to its core telecom operations after divesting its media assets, making it a more streamlined organization, giving 5G bulls a reason to cheer this development. The future of fiber-based connections is a lucrative business. Hence, AT&T has committed $24 billion for its 5G and fiber broadband plans. It recently spent $9.1 billion for new airwave licenses in an auction where bidders spent a total of $22.5 billion.

However, AT&T cut its dividend from $2.08 to $1.11 per share as part of the spin-off. The move irked income investors. Nevertheless, the multinational telecommunications company’s commitment to dividend payout is around $8 billion annually, which equates to 40% of management’s guidance for 2023 free cash flow.

The dividend cut will provide it with more financial flexibility. It is doing this at the same time that it primarily focuses on deploying mid-band spectrum for its 5G network, expanding fiber deployments, and acquiring another wireless carrier.

Consequently, analysts believe the major dividend cut is a step in the right direction and note that there are still a lot of steep obstacles ahead for this company. In addition, AT&T still has a handsome dividend, which translates to a yield of 5.4%.

On the publication date, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience in analyzing the stock market and was a former data journalist at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions regarding their portfolio.

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