The Coming Sell-Off May Be Huge: 5 Dividend Aristocrats to Buy Now for Safety and Income

It was nice while it lasted, but the dumpster fire that was the quarterly earnings report from Meta Platforms (known for years as Facebook) may have lit the fuse for a continuation of the selling we saw almost the entire month of January. Toss in some lousy reports from other key names (like PayPal and Spotify), interest rates that are rising and inflation that continues to spiral higher, and the ingredients for a big sell-off could be in place.

With yields rising, and the increase in the federal funds rate expected to start in March, safe corporate bonds are hardly the best idea now. Often when income investors look for companies paying big dividends, they are drawn to the Dividend Aristocrats, and with good reason. The 66 companies that made the cut for the 2022 S&P 500 Dividend Aristocrats list have increased dividends (not just remained the same) for 25 years straight. The requirements go even further, with the following attributes also mandatory for membership on the esteemed list:

• Companies must be worth at least $3 billion at the time of each quarterly rebalancing.
• Average daily volume must be least $5 million in transactions for every trailing three-month period at every quarterly rebalancing date.

With the potential for a sizable correction looming, and interest rates poised to rise, we thought it would be a good idea to look for companies on the Dividend Aristocrats list that are in defensive sectors but look poised to do well the rest of 2022. Five stocks hit our screens, all of which are Buy rated at top Wall Street firms. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Abbott Laboratories

Large-cap pharmaceutical stocks always tend to hold up well in distressed markets, and this blue chip is among the best. Abbott Laboratories (NYSE: ABT) discovers, develops, manufactures and sells health care products worldwide.

Its Established Pharmaceutical Products segment offers branded generic pharmaceuticals to treat pancreatic exocrine insufficiency; irritable bowel syndrome or biliary spasm; intrahepatic cholestasis or depressive symptoms; gynecological disorders; hormone replacement therapy; dyslipidemia; hypertension; hypothyroidism; Ménière’s disease and vestibular vertigo; pain, fever and inflammation; migraines; anti-infective clarithromycin; cardiovascular and metabolic products; and influenza vaccines, as well as to regulate physiological rhythm of the colon.

The Diagnostic Products segment offers laboratory systems in the areas of immunoassay, clinical chemistry, hematology and transfusion; molecular diagnostics systems that automate the extraction, purification and preparation of DNA and RNA from patient samples, as well as detect and measure infectious agents; point of care systems; cartridges for testing blood; rapid diagnostics lateral flow testing products; molecular point-of-care testing for HIV, SARS-CoV-2, influenza A and B, RSV and strep A; cardiometabolic test systems; drug and alcohol test, and remote patient monitoring and consumer self-test systems; and informatics and automation solutions for use in laboratories.

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