8 Best Dividend Growth Stocks for a Bear Market

Investors already know that dividend growth is a powerful tool for gaining financial independence.

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Investors already know that dividend growth is a powerful tool for gaining financial independence. Dividends provide passive income that investors can use to augment their salary (and replace it in retirement), and dividend-paying stocks have historically outperformed non-dividend payers over the long-term.

That's in part because dividend growers can be more resilient in bear markets. Consider that during the market meltdown of 2007-09, the Vanguard Dividend Appreciation ETF (VIG (opens in new tab)) — an exchange-traded fund investing in dividend growth stocks — outperformed the Standard & Poor's 500-stock index-tracking SPDR S&P 500 ETF (SPY (opens in new tab)) by a considerable margin of 14.7%.

SPY data by YCharts

Eric Ervin, chief executive officer of ETF provider Reality Shares, says the reason dividend growth stocks can outperform is because, on the average, they represent sturdier businesses. "Companies that grow their dividends tend to have healthier fundamentals, making them better investments in the long-term," he says.

When the going gets tough, look for companies that are willing and able to share more of their profits with investors. Here are eight of the best bear-resistant dividend growth stocks to consider.

Data is as of Oct. 23, 2017. Dividend yields are calculated by annualizing the most recent quarterly payout and dividing by the share price. Click on ticker-symbol links in each slide for current share prices and more.

Michael Foster
Contributing Writer, Kiplinger.com
Michael Foster is the Lead Research Analyst for Contrarian Outlook, where he writes CEF Insider. He has written on high-income assets, dividends, closed-end funds and exchange-traded funds for a number of publications including Forbes, Bankrate and SeekingAlpha. Michael finished his PhD in 2008 and has been advising investors since 2011.