During recessions, safe dividend stocks offer investors steady income to buffer against falling stock prices, while also exhibiting lower volatility than growth stocks.

One of the best groups of safe dividend stocks is the Dividend Aristocrats, which are a list of 67 stocks in the S&P 500 Index with 25 or more consecutive years of dividend increases.

This article will discuss 3 of the safest Dividend Aristocrats with safe income payouts, even in a recession.

Roper Technologies (ROP)

Roper Technologies is a specialized industrial company that manufactures products such as medical and scientific imaging equipment, pumps, and material analysis equipment. Roper Technologies also develops software solutions for the healthcare, transportation, food, energy, and water industries.

On July 21st, 2023, Roper reported its Q2 results for the period ending June 30th, 2023. On a continuing operations basis, quarterly revenues and adjusted EPS were $1.53 billion and $4.12, indicating a year-over-year increase of 17% and 20%, respectively. The company’s momentum during the quarter remained strong, with organic growth coming in at 9%.

Organic growth was once again driven by broad-based strength across its portfolio of niche-leading businesses. Backed by Roper's growth momentum, balance sheet strength, and a large pipeline of high-quality acquisition opportunities, management continues to believe Roper is well positioned for continued double-digit cash flow growth.

Roper upgraded its adjusted EPS guidance for FY2023, expecting it to land between $16.36 and $16.50 (up from $16.10 and $16.30 previously). The midpoint of the updated range implies a year-over-year increase of 15%.

Roper has proven consistent growth in its profitability over the years. Over the past five years, the company has grown its EPS by an annualized rate of 10.9%. The company’s pipeline of high-quality acquisition opportunities remains robust, and its existing software subsidiaries keep growing organically, adding to its recurring revenues.

The stock has a 2023 dividend payout ratio of 17%, which leaves lots of room to continue increasing its dividend.

Procter & Gamble (PG)

Procter & Gamble is a consumer products giant that sells its products in over 180 countries. Notable brands include Pampers, Luvs, Tide, Gain, Bounty, Charmin, Puffs, Gillette, Head & Shoulders, Old Spice, Dawn, Febreze, Swiffer, Crest, Oral-B, Scope, Olay and many more. The company generated $80 billion in sales in fiscal 2022. Procter & Gamble has paid a dividend for 133 years and has grown its dividend for 67 consecutive years.

On April 11th, 2023, Procter & Gamble raised its dividend by 3.0%, from $0.9133 per quarter to $0.9407. In late April, Procter & Gamble reported (4/21/23) financial results for the third quarter of fiscal 2023 (its fiscal year ends June 30th). The company grew its sales and its organic sales by 4% and 7%, respectively, over the prior year’s quarter. Organic sales growth resulted from 10% price hikes, which were partly offset by a -3% decrease in volumes. Despite the strong headwind from cost inflation, gross margin expanded by 150 basis points and adjusted earnings-per-share grew 3% thanks to price hikes. The firm sales amid strong price hikes are a testament to the strength of the brands of Procter & Gamble. The company raised its guidance for growth of organic sales in fiscal 2023, from 4%-5% to 6%.

Procter & Gamble’s dividend payout ratio of 63% is well within a reasonable range for such a high-quality firm. We believe that the company can keep growing its dividend at a rate roughly in line with earnings-per-share growth going forward. Procter & Gamble has significant competitive advantages thanks to its strong brands. The company has several category-leading brands such as Crest, Tide, Gillette, Bounty, Febreze, Old Spice, Pampers, and many more. These brands provide Procter & Gamble with pricing power and consistent profits, even in recessions.

Cincinnati Financial (CINF)

Cincinnati Financial is an insurance company founded in 1950. It offers business, home, auto insurance, and financial products, including life insurance, annuities, property, and casualty insurance. As an insurance company, Cincinnati Financial makes money in two ways. It earns income from premiums on policies written and by investing its float, or the large sum of money consisting of the time value between the premium income and insurance claims.

On April 27th, 2023, Cincinnati Financial reported the first quarter results for Fiscal Year (FY)2023. In the first quarter of 2023, the company reported a significant turnaround, with a net income of $225 million, compared to a net loss of $266 million in the same period last year. This positive result includes a $84 million increase in the fair value of equity securities. Overall net income increased by $491 million, driven by higher net investment gains and a decrease in after-tax property casualty underwriting income. The company's book value per share rose to $68.33, indicating a positive trend, and the value creation ratio improved to 3.1% from a negative 6.9% in the first quarter of 2022.

We estimate that Earnings Per Share (EPS) for 2023 to be $4.72 per share. This is an increase of 11.3% compared to 2022.

Cincinnati Financial has a strong dividend growth track record. Unlike many financial industry peers, it did not cut its dividend payout during the last financial crisis. With its dividend record during the financial crisis, BBB+ investment-grade credit rating, and Cincinnati Financial having 63 consecutive years of annual dividend increases, we believe that the risk of a dividend cut is low with this company.
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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.