No Matter What Happens to the Market, These 3 Dividend Stocks Belong in Your Portfolio

It's not fun mapping out apocalyptic stock market scenarios, but it's worth knowing how your portfolio might hold up under duress. Stocks have been in a bull market for most of the past couple of decades, but there's bound to be some adversity -- it's part of being a long-term investor.

You shouldn't necessarily avoid risk. Often, younger, faster-growing companies, or tech stocks at the cutting edge of innovation, can generate life-changing returns. But it's wise to include some blue chip dividend stocks that have time-tested, rock-solid businesses that will endure, no matter what happens to the broader market.

These three stocks are Dividend Kings, meaning they have each raised their dividend for at least 50 consecutive years. They probably belong in your portfolio.

Image source: The Motley Fool.

1. This could be the world's most resilient business

Altria Group (NYSE: MO) sells tobacco and nicotine products in the United States, led by its Marlboro cigarette brand. Smoking rates in the United States have steadily declined for many decades. Yet Altria Group has 56 consecutive years of annual dividend increases. And yes, Altria ships fewer cigarettes each year. Despite that, Altria continues to grow its profits by cutting costs and raising prices. Nicotine might be the most addictive legal substance on Earth, which affords tobacco companies unique pricing power.

The obvious concern is that eventually, this playbook won't work as volumes shrink too much to overcome. But that concern is now decades old, and Altria still chugs on. Management has failed to diversify the business, but there's still time to get that right over the coming years. Altria's dividend payout ratio is still manageable at 75% of 2026 earnings estimates, and Wall Street anticipates low-to-mid single-digit annualized earnings growth.

Until then, Altria stock boasts a robust 5.9% dividend yield, sells a recession-proof product, and will almost assuredly continue inching that dividend higher year after year. Investors should be able to buy Altria and sleep well at night, at least for the next several years.

2. This retail giant still has a bright future

Walmart (NASDAQ: WMT) is the world's largest retailer and a focal point of consumer spending in the United States. Its massive size and scale give it leverage with suppliers and overwhelming efficiencies to sell its goods at low prices that competitors simply cannot sustain. Today, roughly 90% of Americans live within a short drive of a Walmart store.

Consumers can go to Walmart for groceries and household essentials, pick out a new TV, and have their tires changed, all in the same trip. Therefore, Walmart stores are typically busy, and that constant activity has made it a tremendous dividend stock with 53 consecutive annual dividend increases. Walmart has also adapted to industry changes, utilizing its store network to compete with Amazon in e-commerce. That has become a major growth engine for the future.

Analysts see Walmart growing earnings by 9% to 10% annually over the next three to five years, funding more dividend hikes along the way. Shoppers will almost certainly continue shopping at Walmart, so there's almost zero risk that the bottom will fall out of this world-class business model. Investors can buy, hold, and continue to count on Walmart no matter how shaky the markets may become.

3. A Buffett favorite and iconic brand

The Coca-Cola Company (NYSE: KO) adds to this ongoing theme of products people need, no matter what happens. People will always get thirsty, and Coca-Cola is the best at capitalizing on that. It's a global beverage juggernaut with countless distribution points worldwide, including stores, venues, vending machines, you name it. Coca-Cola is known for its namesake soda but also sells dozens of other brands of soda, water, juice, coffee, tea, and more.

There's no better endorsement a stock can get than from legendary investor Warren Buffett, who bought Coca-Cola stock for Berkshire Hathaway in the late 1980s. Buffett is a known fan of the iconic brand, and Berkshire Hathaway still holds the stock today. Part of the reason for that is Coca-Cola's clockwork-like dividend. The company has paid and raised the dividend for 64 consecutive years. Plus, the stock offers a solid initial dividend yield of 2.5% right now.

There's no reason to doubt the resiliency of Coca-Cola's dividend. Analysts see the company growing earnings by an average of 7% to 8% annually over the next three to five years. Coca-Cola sells more than 2.2 billion servings each day. All those little transactions add up to massive profits, and it's unlikely people worldwide will suddenly stop drinking its products. Investors can be like Buffett and put their hard-earned capital into Coca-Cola stock.

Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, and Walmart. The Motley Fool has a disclosure policy.