Investors tend to flock to areas of safety leading up to, and during periods of recession. This is because when a recession strikes, cyclical companies usually experience a more severe decline in earnings.

This means the technology and consumer discretionary sectors tend to perform poorly in a bear market, while others such as food stocks usually outperform due to their reliable earnings.

In this article, we’ll take a look at 3 food stocks with the ability to continue paying their dividends and providing dividend increases, even in a severe recession.

General Mills (GIS)

General Mills manufactures and distributes branded packaged foods globally. The company sells a diverse slate of goods, including cereals, yogurt, soup, meal kits, snack bars, ice cream, nutrition bars, frozen pizzas, pet food, and more. 

In mid-March, General Mills reported (3/19/25) results for Q3-2025. Net sales and organic sales fell -5% each over the prior year’s quarter, primarily due to retailer inventory reductions. Gross margin expanded from 33.5% to 33.9%, as cost savings offset input inflation. Adjusted earnings-per-share decreased -15%, from $1.18 to $1.00, but exceeded the analysts’ consensus by $0.04. 

General Mills is facing tough comparisons, as the pandemic has subsided. It generates 85% of its sales from at-home food demand. It is also facing high cost inflation, which is likely to persist for a while. In addition, it is currently investing in its pet business to reinvigorate growth.

The stock has proven resilient during recessions and market selloffs because people tend to eat at home more during difficult economic periods. In the Great Recession, while most companies saw their earnings collapse, General Mills grew its earnings-per-share by more than 10% per year from 2007 to 2010. 

The company also reiterated its guidance for fiscal 2024 in its latest conference call. It expects essentially flat organic sales and growth of earnings-per-share of 4%-5%. We expect approximately 5.0% annual earnings-per-share growth until 2029, mostly thanks to Blue Buffalo. Earnings-per-share will also benefit from the resumption of share repurchases now that the balance sheet has strengthened.

This level of EPS growth allows the company to raise its dividend. GIS stock currently yields 4.0%.

Campbell Soup (CPB)

Campbell Soup Company is a multinational food company headquartered in Camden, N.J. The company manufactures and markets branded convenience food products, such as soups, simple meals, beverages, snacks, and packaged fresh foods. The company’s portfolio focuses on two specific businesses: Campbell Snacks, and Campbell Meals and Beverages. Campbell generated annual sales of $9.6 billion in fiscal 2024. 

On March 12, 2024, Campbell closed on its acquisition of Sovos Brands (SOVO) for $23 per share in cash, which represented a total enterprise value of $2.7 billion, and was funded by issuing new debt. Sovos is a leader in high-growth premium Italian sauces, and owns the market-leading Rao’s brand. Campbell had the goal of building a $1 billion sauce business, and it achieved that through this acquisition. Sovos was added to Campbell’s Meals & Beverages division. 

Campbell Soup reported second quarter FY 2025 results on March 5th, 2025. Net sales for the quarter improved by 9% year-over-year to $2.7 billion. This increase was mostly a result of the Sovos Brands acquisition. Adjusted EPS was 8% lower year-over-year at $0.74 for the quarter, which beat expectations by two cents. 

The company repurchased $56 million worth of shares in H1. There remains $301 million remaining under the current $500 million share repurchase program, which is in addition to the existing $205 million remaining on its anti-dilutive share repurchase program. 

Campbell is building a brand powerhouse and focusing on growing its North American business. Campbell Soup has grown its earnings-per-share at an approximate 1.7% average annual rate since 2015. Earnings for 2019 came up short due to higher adjusted net interest expense and being largely a transition year.

CPB shares currently yield 3.9%.

W.K. Kellogg (KLG)

WK Kellogg Co. specializes in offering a range of ready-to-eat cereal products, featuring popular brands such as Frosted Flakes, Special K, Froot Loops, Raisin Bran, Frosted Mini-Wheats, and Kashi.

On May 6th, 2025, WK Kellogg posted its Q1 results for the period ending March 29th, 2025. This was WK Kellogg’s 7th quarter as a standalone company following its separation from Kellanova. For the quarter, the company’s net sales came in at $663 million, down 6.2% from the prior-year period.

While the price/mix was up 3.0%, volume was down 8.6%. In other words, price elasticity and reduced retailer inventory were the main drivers of the decline in revenues.

Despite lower revenues, first-quarter adjusted EBITDA came in at $72 million, reflecting a 4.0% year-over-year decrease. Notably, the company’s adjusted EBITDA margin rose by 20 basis points to 10.8%, due to improved gross margin and disciplined cost management.

Net income was $18 million, down from $33 million last year. On a per-share basis, the net income was $0.20, compared to net income per share of $0.38 reported in the same period last year.

Management lowered its fiscal 2025 organic net sales projections to a range of -2.0% to -3.0%. Adjusted EBITDA growth is now projected to be flat to -2.0%.

WK Kellogg’s payout ratio currently stands at 78%. We believe this is an ok payout level, and that the dividend is safe, for now. Moreover, the company enjoys a substantial competitive advantage attributed to the iconic status of its brands and a well-established North American distribution network. The company holds a 27.4% market share in the U.S. and a 38.9% market share in Canada, which are likely to grow further following the spin-off.