3 Recession-Proof Dividend Stocks You Can't Go Wrong With in July

The threat of recession has hung over the market for much of 2026. A December 2025 study from J.P. Morgan put the probability of a global recession this year at 35%, before the Iran war and associated turmoil in the oil market.

While fears of a recession this year have eased, they haven't vanished. The Middle East is still unsettled, and inflation and consumer prices in the U.S. are up. Now, economists are starting to discuss the likelihood of a recession in 2027.

Investors would be wise to be prepared for a recession rather than react after the fact, and identify some recession-proof stocks to rely on to weather the storm -- and pay a nice dividend as well. Three excellent choices are Kroger (NYSE: KR), UnitedHealth Group (NYSE: UNH), and WM (NYSE: WM).

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1. Kroger

When a recession hits, people cut back on discretionary spending, such as fancy restaurants and trips, as people look to save money by eating at home. That's where Kroger comes in -- the grocery store chain has the second-largest market share in the U.S., with 8.6%, trailing only Walmart (21.2%).

Revenue in the first quarter was $46.1 billion, up from $45.1 billion a year ago. Excluding fuel and e-commerce pharmaceutical sales, sales were up 0.5% from last year. Earnings per share were $1.58, up from $1.49 in Q1 2025.

Kroger also saw an impressive 19% growth in e-commerce sales year over year, and its Our Brands program outpaced national brand sales by 175 basis points. Our Brands is an important part of Kroger's business model, as it has nearly three dozen food production and manufacturing facilities to make private-label, low-cost products.

Kroger stock is down 7% so far this year, but it's a strong recession play if the economy's woes worsen. The dividend yield is a solid 2.5%.

2. UnitedHealth Group

I've been following UnitedHealth Group stock closely since it made news for all the wrong reasons last year -- the company had a disastrous Q1 2025 earnings report and missed analysts' estimates for the first time since the 2008-09 financial crisis. The problem stemmed from higher-than-expected costs incurred by members, particularly those with Medicare Advantage plans.

But this year is completely different. The company cut costs and reduced the number of Medicare Advantage patients to 7.55 million, from 8.45 million a year ago. First-quarter revenues were $111.7 billion, up 2% from a year ago. UnitedHealth Group raised its full-year outlook to more than $17.35 per share, up from $17.10 per share.

Investors are bullish on the stock in part because the company got some good news: The federal government approved a 2.48% average rate increase for 2027 Medicare Advantage plans, which means billions in revenue for insurance companies.

Regardless of the economy, people will need medical care. UnitedHealth Group stock is up nearly 30% so far this year and has a dividend yield of 2.2%.

3. WM

My final pick for a recession-proof dividend stock is WM, formerly known as Waste Management, which collects, processes, and disposes of trash for businesses and homes. No matter what happens with the economy, people will continue to generate trash, and WM will see its fair share of those profits.

WM has 580 hauling sites and averages 19,000 routes a day. It also has nearly 500 transfer stations, maintains 250 solid waste landfills, and has more than 100 recycling facilities.

Revenue in the first quarter was $6.22 billion, up 3.5% from a year ago. Income was $1.11 million, up from $1.01 million, and earnings per share of $1.79 was an improvement of $1.58 in Q1 2025.

WM stock is up 2.5% year over year and has a dividend yield of 1.6%.

Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool recommends Kroger, UnitedHealth Group, and WM. The Motley Fool has a disclosure policy.