The S&P 500 is up 10% so far this year, and has nearly quadrupled off its 2009 low.

The stock market keeps racing to record highs. After such a prolonged rally, the valuation multiple of the stock market has expanded significantly since the Great Recession. For example, the S&P 500 Index traded for an average price-to-earnings ratio of 14.9 in 2012, and has increased each year since.

Today, the S&P 500 Index trades at an average price-to-earnings ratio of 24.5, which is the highest point since 2009. This could be an indication that the stock market rally could slow, or even come to an end.

If the market were to head south, stocks that pay dividends could help cushion the blow.

For example, Dividend Aristocrats would be good picks during a downturn—these are companies in the S&P 500 Index, with 25+ consecutive years of dividend increases. You can see all 51 Dividend Aristocrats here.

This article will present a list of the top 10 stocks investors should buy, if the market stalls, or the economy enters a downturn.

Defensive Dividend Stock #10: Campbell Soup (CPB)

Dividend Yield: 3%

Campbell was founded all the way back in 1869. It has a number of strong brands, including Campbell’s, Pepperidge Farm, Bolthouse Farms, Arnott’s, V8, Swanson, Pace, and Prego.

Campbell Soup is a good pick for a portfolio built to protect investors against a market downturn. It operates in a stable industry, food and beverages. And, like many other food and beverage stocks on this list, it would likely see earnings rise in an economic downturn.

During recessions, consumers tend to scale back their discretionary spending. Instead of eating out at restaurants frequently, consumers often spend less to prepare meals at home. This is why Campbell grew earnings-per-share in each year of the Great Recession.

Earnings-per-share during the Great Recession are shown below:

• 2007 earnings-per-share of $1.95
• 2008 earnings-per-share of $2.09 (7% increase)
• 2009 earnings-per-share of $2.15 (2.8% increase)
• 2010 earnings-per-share of $2.42 (12.6% increase)

Campbell has struggled as of late. Organic revenue, which excludes currency exchange impacts, declined 1% in fiscal 2017. The most recent quarterly was particularly difficult. Sales fell 1.8%, and missed analyst estimates by $30 million.

Source: Q4 Earnings Presentation, page 9

Management has attributed this to a difficult environment for shelf-stable products. CEO Denise Morrison said:

“The operating environment for the packaged foods industry remains challenging due to shifting demographics, changing consumer preferences for food, the adoption of new shopping behaviors and the dynamic retailer landscape. In these times, sales growth remains a challenge.”

The good news is, thanks to cost cuts and share repurchases, adjusted earnings-per-share increased 3% for the year. Continued earnings growth should help Campbell increase its dividend moving forward.

Campbell has a business model that will probably lag behind when the economy is growing, because it focuses on packaged goods. Consumers are spending more on organics and natural foods, where Campbell has a small presence.

However, if another recession were to occur, the company would probably see its earnings growth accelerate, as it did during the Great Recession.

Campbell has a solid dividend yield of 3%, and in 2016 the company hiked its dividend by 12%.

Defensive Dividend Stock #9: Dollar General (DG)

Dividend Yield: 1.5%

Dollar General’s first store was opened in 1955. Today, it is a retail giant. It recently celebrated the opening of its 14,000th store.

It is a dollar store, a segment of the industry that offers many products for $1 or less.

Discount retailers hold up well during recessions, as consumers typically scale down their spending when times are tough. Dollar stores operate on the deep-discount end of the pricing spectrum, which is why Dollar General could see traffic rise during a recession.

Indeed, Dollar General might be among the best performers the last time a recession hit in the U.S. Earnings-per-share during the Great Recession are shown below:

• 2007 earnings-per-share of $0.34
• 2008 earnings-per-share of $1.04 (206% increase)
• 2009 earnings-per-share of $1.82 (75% increase)
• 2010 earnings-per-share of $2.22 (22% increase)

As you can see, Dollar General thrived. Earnings soared during the recession, as consumers flocked to dollar stores for their ultra-low prices.

Dollar General expects to keep opening new stores aggressively, and plans for 6%-8% square footage growth per year. By 2020, the company expects to generate net sales of $30 billion, which would be a 50% increase from 2015.

The company believes it will achieve this growth, because there is a large addressable market, both in terms of new geographic regions, and new product categories.

Source: 2020 Vision Presentation, page 11

Dollar General is investing aggressively in new product areas, such as grocery, and believes it can continue to take share.

2016 was another strong year for Dollar General. You may have heard that retail is having a difficult time right now, but Dollar General is a clear exception.

For the year, net sales increased 7.9%, to $22 billion. Sales growth was due to new store openings, and 1% growth in comparable-store sales.

Earnings-per-share increased 12% in 2016, to $4.43. The company expects to open another 1,000 stores in 2017, which should provide for future growth.

Defensive Dividend Stock #8: Brown-Forman (BF-B)

Dividend Yield: 1.4%

Brown-Forman is an alcoholic beverage giant. Its most famous brand is its flagship, Jack Daniels whiskey. The Jack Daniel Distillery has been in operation for more than 150 years. Jack Daniel’s Tennessee Whiskey got its start all the way back in 1865.

Among the company’s other large brands are Herradura and El Jimador tequila, and Finlandia vodka.

“Sin” stocks tend to perform well during recessions. Sin stocks are companies that sell products that are generally viewed as bad for one’s health, such as alcohol and tobacco.

When times are tough, consumers often turn to these products, to relieve the stress of financial difficulties.

Earnings-per-share during the Great Recession are shown below:

• 2007 earnings-per-share of $0.95
• 2008 earnings-per-share of $0.96 (1% increase)
• 2009 earnings-per-share of $1.03 (7% increase)
• 2010 earnings-per-share of $1.19 (16% increase)

Brown-Forman has strong brands which are popular with consumers, which gives the company pricing power. And, the business model is highly profitable. This leads to consistently high returns on invested capital. To that end, Brown-Forman generated over 15% return on capital each year, since 2008.

In the past five years, the company grew operating profit at a 10% compound annual rate each year.

Going forward, there is plenty of growth potential left, as the company further expands its product line, both inside and outside of whiskey.

Source: Annual Stockholder Meeting, page 17

Brown-Forman’s strongest growth categories are its smaller brands, in the premium whiskey segment. Collectively, these high-end brands posted double-digit revenue growth last quarter, led by Woodford Reserve, which was up 16%.

Overall, revenue increased 9.4% last quarter, and beat analyst expectations by $33 million. Earnings-per-share also came in above expectations, and rose by 27% from the same quarter last year.

For the full year, Brown-Forman expects net sales growth of 4%-5%, led by its premium American whiskey and tequila brands. Operating profit is expected to increase by 6%-8%, thanks to sales growth and the benefit of cost cuts.

Brown-Forman is a Dividend Aristocrat, and has increased its dividend for 33 years in a row. It has paid a regular quarterly cash dividend for 71 consecutive years.

Defensive Dividend Stock #7: Church & Dwight (CHD)

Dividend Yield: 1.5%

Church & Dwight is a consumer staples company.

The stock has a lower dividend yield than many of its industry peers, but this is a strategic decision by company management, which aims for a dividend payout ratio of 40%.

But, this allows the company to increase its dividend at high rates. Church & Dwight has increased its dividend for 21 years in a row. It is a Dividend Achiever, a group of 265 stocks with 10+ years of consecutive dividend increases. You can see the full Dividend Achievers List here.

A conservative payout ratio also gives the company enough financial flexibility to invest in growth. Church & Dwight’s growth initiatives primarily involve acquisitions.

Source: 2017 Deutsche Bank Conference, page 9

The company has 10 core brands, which collectively generate 80% of its total sales. These 10 brands are:

• Arm & Hammer
• Trojan
• Xtra
• First Response
• Nair
• Spinbrush
• Oxi-Clean
• Orajel
• Batiste
• Vitafusion

Acquisitions and internal product investment have led to strong earnings growth over the long-term. For example, the company had net sales of $1.5 billion in 2004. By 2016, sales grew to $3.5 billion.

The company maintains a focused product portfolio. Approximately 48% of total sales come from household products, 44% of sales come from personal care products, with the remaining portion from specialty products.

And, over 80% of Church & Dwight’s sales are generated in the U.S., which helped shield the company from the negative effects of the strong U.S. dollar.

The results speak for themselves.

Church & Dwight generated 14% earnings-per-share growth in 2016. And, adjusted earnings-per-share increased 9.4% in the first half of 2017, thanks to 6% growth in U.S. sales volumes.

For 2017, Church & Dwight expects full-year organic sales growth of 3%, leading to 8%-9% growth of adjusted earnings-per-share. This should help the company continue to increase its dividend in the high-single digit range, which makes the stock attractive for dividend growth investors.

Defensive Dividend Stock #6: General Mills (GIS)

Dividend Yield: 3.7%

General Mills makes the list because it has a proven ability to navigate economic ups and downs. The company has paid a dividend for 117 years. In that time, it experienced many recessions, and continued to pay dividends.

General Mills qualifies as a blue chip, which we define as companies with 100+ year operating histories, with 3% dividend yields. You can see the full list of blue chip stocks here.

General Mills is a diversified food company. Its core product is cereal, in which it has the #2 market share position in the U.S., with 3 of the top 5 cereal brands.

Source: Investor Day Presentation, page 9

This is not an advantage for General Mills right now, since cereal consumption has stagnated in the U.S., and has offset growth in other areas.

General Mills recently concluded its fiscal year. Organic sales declined by 6% in fiscal 2017, due mostly to a 5% decline in North America retail sales.

In response, General Mills has invested greater resources in fresher foods. Led by Annie’s, General Mills expects its natural and organics brands to reach $1 billion in annual sales by 2019.

In the meantime, General Mills is cutting costs to maintain earnings growth. Even though sales fell in fiscal 2017, adjusted earnings-per-share increased 6% from fiscal 2016.

For the current fiscal year, management expects another sales decline of 1%-2%. Thanks to cost cuts and share buybacks, adjusted earnings-per-share are expected to increase 1%-2%. This should at least allow the company to raise its dividend again next year.

While General Mills works through its turnaround, investors can collect an attractive 3.7% dividend yield.

And, the stock could be undervalued. General Mills had adjusted earnings-per-share of $3.08 in fiscal 2017. As a result, shares trade for a price-to-earnings ratio of 17.3. This is a significant discount to the S&P 500 Index, which has an average price-to-earnings ratio of 24.6.

Defensive Dividend Stock #5: Consolidated Edison (ED)

Dividend Yield: 3.3%

No article of recession-resistant dividend stocks would be complete without a utility. That’s because electricity should be expected to see consistent demand, even during recessions.

Like General Mills, ConEd is a blue chip. It has been in business for more than 100 years, with a 3%+ dividend yield.

ConEd is not undervalued right now, which means the share price could decline if the stock market turns lower.

The company had adjusted earnings-per-share of $4.05 in the past four reported quarters. As a result, shares trade for a price-to-earnings ratio of 20.8, which is on the high side for a utility.

That said, utilities offer secure dividends during recessions.

ConEd has increased its dividend for 43 years in a row. It is a Dividend Aristocrat, and is the only utility stock on the list.

ConEd is a regulated utility operating in New York. It has approximately 3 million electricity, and 1 million gas customers. It generates approximately $12 billion in annual revenue, with $48 billion in assets. Electricity service accounts for more than 70% of total revenue.

Regulated utilities like ConEd receive approval to raise rates modestly, each year. ConEd expects its rate base to grow by 5.5% compounded annually, through 2019.

Source: Q2 Earnings Presentation, page 20

Along with population growth, this should fuel reliable earnings growth in the low-to-mid single digit range each year.

For example, in 2016, ConEd’s earnings-per-share increased 2%. Utilities are not typically high-growth businesses, but they offer stability.

ConEd is off to a good start to 2017. Earnings-per-share, adjusted for non-recurring items, increased 3.9% over the first two quarters. For 2017, management expects up to 4% adjusted earnings-per-share growth.

With such consistent earnings growth, ConEd should have little trouble increasing its dividend each year, even if the broader economy struggles.

Defensive Dividend Stock #4: Altria Group (MO)

Dividend Yield: 4.1%

Altria makes the list of top dividend stocks to buy if the rally ends, because of its strong business model. Tobacco is an inelastic product, meaning there is very sticky demand. Consumers still buy cigarettes, even with steep price increases each year.

Altria is a giant in the tobacco industry. Its flagship brand is Marlboro, which by itself controls nearly half of U.S. market share.

Source: 2017 CAGNY Presentation, page 42

It also has smokeless tobacco brands, cigar and wine businesses, and a 10% ownership of Anheuser Busch Inbev (BUD).

Strong brands and consistent demand, provide Altria with pricing power. The average pack of Marlboro cigarettes cost $6.63 last quarter, a 7% increase from the same quarter last year.

In 2016, Altria generated $3.6 billion of free cash flow. Adjusted earnings-per-share rose by 8% for the year. The company increased adjusted earnings-per-share by 3.3% through the first half of 2017.

For the full year, Altria expects adjusted earnings-per-share of $3.26-$3.32. This would represent earnings growth of 7.5%-9.5%.

Going forward, Altria is developing new products, to help offset the decline in smoking in the U.S. Specifically, e-vapor and heated tobacco products are the company’s future growth catalysts.

Altria’s MarkTen is now the #2 e-vapor brand in the U.S., and the company is investing in its IQOS heated tobacco product line. Altria will have the rights to sell IQOS in the U.S., and the company hopes for commercial production over the next year.

Consistent earnings growth has allowed the company to raise its dividend for many years. On August 24th, Altria increased its quarterly dividend by 8.2%, to $0.66 per share. The company maintains a target dividend payout ratio of 80%. It has now increased its dividend 51 times in the past 48 years.

With such a strong dividend history, odds are good Altria would continue to increase its dividend during the next stock market decline.

Defensive Dividend Stock #3: Johnson & Johnson (JNJ)

Dividend Yield: 2.6%

Healthcare is another market sector that tends to perform well when the economy takes a dip. Consumers often cannot choose to go without healthcare, which keeps demand steady, even during recessions.

This is reflected in J&J’s amazing dividend track record. It has increased its dividend for 55 consecutive years.

Not only is J&J a Dividend Aristocrat, but it is also a Dividend King. There are only 19 Dividend Kings, which have raised their dividends for 50+ consecutive years. You can see all 19 Dividend Kings here.

To be one of the 19 Dividend Kings is a sure indication of J&J’s durable competitive advantages. The company remains highly profitable each year. Earnings-per-share during the Great Recession are shown below:

• 2007 earnings-per-share of $4.15
• 2008 earnings-per-share of $4.57 (10% increase)
• 2009 earnings-per-share of $4.63 (1% increase)
• 2010 earnings-per-share of $4.76 (3% increase)

J&J grew earnings-per-share in each year of the Great Recession, a very rare achievement. J&J has a balanced, diversified business model. It has pharmaceutical, medical devices, and consumer healthcare segments.

J&J’s adjusted earnings-per-share increased 8.5% in 2016. The best-performing segment for the company last year was pharmaceuticals, which generated 12% sales growth. Medical devices grew by 3.8%, while consumer product sales rose 4.3%.

J&J has continued to grow in 2017. Sales and adjusted earnings-per-share increased 1.9% and 5.2%, respectively, last quarter.

Source: Q2 Earnings Presentation, page 1

J&J should continue to grow revenue and earnings going forward. The pharmaceutical segment is likely to be a source of strength for years to come. For example, J&J’s oncology and immunology revenue increased 24% and 15%, respectively, last year, thanks to its strong pipeline.

And, the $30 billion acquisition of Actelion should be a major boost to J&J’s growth. Actelion operates in pharmaceutical R&D, with a focus on pulmonary arterial hypertension.

The acquisition helps expand J&J’s R&D, into areas with significant unmet need. J&J expects the Actelion acquisition will add at least 1% to annual revenue growth, and even higher earnings growth accretion from cost synergies.

Continued growth means J&J should easily continue its impressive dividend history.

Defensive Dividend Stock #2: McDonald’s (MCD)

Dividend Yield: 2.4%

McDonald’s is an easy choice for this list. Not only is the company highly profitable, but it might actually benefit from a recession. McDonald’s is the largest publicly-traded fast food restaurant stock.

As a fast food giant, McDonald’s is on the low-end in terms of pricing within the restaurant industry. When the economy is booming and consumers are spending more at restaurants higher on the pricing spectrum, McDonald’s growth slows.

For example, from 2011-2016, McDonald’s grew earnings-per-share by just 3%.

But, the opposite is also true: McDonald’s is a recipient of higher traffic when the economy enters a downturn, as consumers scale back their restaurant spending.

Earnings-per-share during the Great Recession are below:

• 2007 earnings-per-share of $2.91
• 2008 earnings-per-share of $3.67 (26% increase)
• 2009 earnings-per-share of $3.98 (8% increase)
• 2010 earnings-per-share of $4.60 (16% increase)

As you can see, the company performed extremely well during the recession.

McDonald’s is investing in new menu offerings, and improving its restaurants. The move to all-day breakfast and rolling out new technology will help boost sales growth. And, earnings will rise from the company’s refranchising strategy.

McDonald’s expects to refranchise 4,000 restaurants by the end of 2017. By next year, over 90% of its restaurants will be franchised. Franchising restaurants provides McDonald’s with higher earnings growth, and a steadier stream of monthly income. It places a significant amount of maintenance and renovation expense onto the franshisees.

As a result, over the next several years, McDonald’s expects to increase sales by 3%-5% annually, and high-single digit earnings growth. The company’s earnings growth forecast should hold up, even if the economy were to deteriorate moving forward.

This will allow McDonald’s to continue increasing its dividend each year. It has increased its dividend for 40 years in a row, and is a Dividend Aristocrat. It increased its dividend by 5.6% in 2016.

Defensive Dividend Stock #1: Wal-Mart Stores (WMT)

Dividend Yield: 2.6%

Taking the top spot is Wal-Mart, which is arguably the most recession-resistant stock of all. Consider that there were two stocks in the Dow Jones Industrial Average to increase in value in 2008. The two stocks were McDonald’s, and Wal-Mart.

Like McDonald’s, Wal-Mart operates on the low end of its industry. It is a discount retailer, and thanks to its huge scale, Wal-Mart offers consistently lower prices than the competition.

This is why Wal-Mart performed as well as it did, during the last recession in the U.S.

Earnings-per-share during the Great Recession are shown below:

• 2007 earnings-per-share of $3.16
• 2008 earnings-per-share of $3.42 (8.2% increase)
• 2009 earnings-per-share of $3.66 (7% increase)
• 2010 earnings-per-share of $4.07 (11% increase)

Wal-Mart is struggling right now, as the retail environment has become much more difficult recently. The threat posed by Amazon.com (AMZN) on brick-and-mortar retailers is a significant challenge for the entire industry.

Wal-Mart is arguably the best-equipped retailer to fend off Amazon. Wal-Mart stores are located within 10 miles of approximately 90% of the U.S. population. There will always be a certain level of demand for physical stores.

In fiscal 2017, Wal-Mart’s U.S. sales rose 3.2% Overall company-wide sales increased 0.6% for the fiscal year. Wal-Mart generated free cash flow of $20.9 billion in fiscal 2017, a 31% increase from the previous year.

And, Wal-Mart’s stores can serve a valuable role as distribution centers for its own e-commerce business. Wal-Mart has invested aggressively in e-commerce.

Source: Investor Fact Book, page 4

It acquired e-commerce giant Jet.com for $3 billion, and it also has an equity investment in China-based e-commerce platform JD.com.

As a result, Wal-Mart had e-commerce sales of $15 billion in 2017.

Wal-Mart’s e-commerce segment reported 60% growth last quarter. This growth should ensure continued dividend growth.

Wal-Mart has increased its dividend for 44 years in a row, and is a Dividend Aristocrat.

Final Thoughts

The stock market has come a long way since the Great Recession, and could be nearing a top. If that’s the case, investors should position their portfolios defensively, and focus on high-quality dividend payers.

If the market drops, Dividend Achievers and Dividend Aristocrats are likely to outperform stocks that don’t pay dividends.

Each of these stocks operates a defensive business model, and might actually sell more of their products in a recession. This would allow them to continue raising their dividends each year.