3 Top-Tier Dividend Stocks to Buy for a Worry-Free Retirement

Every investor dreams of cash flow that keeps rolling in while the principal marches higher. If you want to turn that into reality, it’s a good idea to look into some top-tier dividend stocks. All the dividend stocks in this article have underlying businesses that are recession-resistant.

That said, I would warn that no stock will go the other way during a broader market downturn. If a recession hits, all stocks go down in tandem. The difference is that these businesses are going to take a much smaller hit fundamentally, so their stocks are unlikely to go down too much.

Many dividend stocks are also trading at a discount already, since Treasuries now yield 4-5%. Still, you’ll be making a mistake if you purely hold Treasuries. Bond coupons stay flat while blue‑chip stocks keep rising, and so do their dividends. Here are the three dividend stocks to look into:

United Parcel Service (UPS)

United Parcel Service (NYSE:UPS) holds the infrastructure that keeps American commerce humming. Consumers click “Buy,” and brown trucks bring goods to their doors. Even recessions are unlikely to disrupt the demand UPS will have.

UPS stock is currently down 57.5% from its peak, which it climbed to in the first place because of COVID. Investors believed the COVID-induced demand would stick around, but the numbers quickly fell off to normal levels, and so did the stock. And now that the stock is down to the $90 to $100 level it has historically traded at, it might be a good idea to click buy, especially since the stock comes with a dividend yield of 6.88%.

Obviously, UPS stock is unlikely to stay at these levels forever. E‑commerce keeps expanding, and it is more than double 2019’s level at $1.192 trillion in 2024. Currently, UPS is cleaning up low‑margin contracts. In January, UPS said it will cut Amazon (NASDAQ:AMZN) volume by more than 50% by mid‑2026 and redirect its trucks to higher‑margin small and medium-sized businesses.  Short‑term, that headline spooked traders. Long‑term, it should lift margins because Amazon work is notoriously skimpy on profit.

You can grab the stock at a solid discount right now. It trades at just 14 times earnings vs. the historical PE ratio of 20 times.

McDonald’s (MCD)

McDonald’s (NYSE:MCD) is less of a discretionary and more of a staple. The company has become an integral part of American culture, and it isn’t going away anytime soon. It flourished during the Great Recession, and it was quick to recover in 2020, even though most other restaurant businesses were crushed. It is also on the cusp of becoming a Dividend King.

Free cash flow hit $6.7 billion in 2024, and the trailing‑twelve‑month figure is slightly higher, so the company covers the annual dividend with a comfy buffer.  Even after buybacks, the payout ratio sits near 60%, which leaves room for much more mid‑single‑digit hikes.

Expansion is alive as well. Management plans to open about 2,200 restaurants in 2025, roughly 4% unit growth, with a target of 50,000 locations worldwide by 2027.  New stores require little capital from corporate because 95% of the system is franchised, so fees drop straight to the bottom line and fund buybacks that amplify per‑share results.

MCD stock currently yields 2.25%. You’re paying 28 times earnings, which is historically in line. This stock rarely trades at too big of a discount, and MCD stock doesn’t rally too high either. The stock should continue climbing gently as earnings rise, and you can keep on collecting dividends in the meantime.

Waste Management (WM)

Waste Management (NYSE:WM) should make sense as a safe dividend stock just by reading its name. Waste management is necessary and not discretionary. The company will always have its invoices paid, and it’s unlikely to take a hit to its business during a recession.

People should continue to pay for waste as it constitutes a small amount of their budgets, and it is something necessary. WM also pays decent dividends and is hiking them. These dividends may not be the best, but there’s plenty of growth left, and the underlying stock has been doing great.

Municipalities, businesses, and households cannot allow trash to pile up because regulations require proper disposal. That structural demand means haulers keep working through downturns. The industry also has high barriers to entry, and competitors must pay WM to dump trash if they lack local landfill capacity, so the company’s landfill moat only grows wider over time.

WM’s forward payout ratio sits near 38%, so management retains plenty of cash for share repurchases and bolt‑on buys. The dividend has compounded by 7.9% annually over the last 12 months and 9.3% over three years. Even after the 2025 raise, the forward yield remains well supported by free cash flow that was $2.16 billion last year.

You’re paying a premium at 36 times earnings. That’s mainly because Wall Street is happy paying extra for all the safety, though that does leave more downside risk.

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