1 Superstar Dividend Growth Stock to Buy if the Market Crashes

Investors bracing for a market crash often turn to dividend growth stocks as a shield against volatility. Among these, one company stands out for its combination of resilience, consistent dividend hikes, and a valuation that’s primed for a rebound: Zoetis (ZTS).

Why Zoetis (ZTS) Is a Dividend Growth Champion

Zoetis, the global leader in animal health, has delivered 21.4% annual dividend growth over the past five years, far outpacing the broader market. The company’s dominance in pharmaceuticals for livestock and companion animals positions it in a $48 billion industry expected to hit $75–85 billion by 2033, driven by rising global demand for protein and pet care.

Key Resilience Factors:

1. Recession-Proof Demand: Animal health is a non-discretionary sector. Farmers and pet owners continue spending on essential medications even during economic slumps.
2. Low Payout Ratio: Zoetis’ dividend payout ratio sits at just 33% of 2025 earnings estimates, leaving ample room to grow payouts even if earnings flatten.
3. Undervalued Now: Shares trade at a P/E of 27x, down sharply from their 10-year average of 41x, offering a potential rebound opportunity.

Data-Driven Case for Zoetis

• Dividend Discipline: Zoetis has raised its dividend every year since its IPO in 2013, a streak unmatched in its industry.
• Balance Sheet Strength: With $12.3 billion in cash and $6 billion in operating cash flow (Q2 2025), the firm can weather a downturn without cutting dividends.
• Global Growth: The company’s revenue mix is split evenly between North America, Europe, and emerging markets, reducing reliance on any single economy.

How Zoetis Outperforms in Downturns

During the 2022–2023 market selloff, Zoetis’ stock fell just 12%, compared to the S&P 500’s 20% drop. This stability stems from its animal health moat:
- Patented Innovations: Products like Cefodizime (a livestock antibiotic) and Galazy (a cat vaccine) face minimal generic competition.
- High Renewal Rates: 90% of customers reorder medications annually, creating predictable cash flows.

The Case for Buying Now

The market currently undervalues Zoetis’ long-term prospects. Analysts project 10% annual earnings growth through 2030, yet the stock trades at a PEG ratio of 2.7, which could compress as growth stabilizes.

Competitors and Contrasting Risks

While utilities like NextEra Energy (NEE) and Consolidated Edison (ED) offer higher yields, their growth is capped by regulatory environments. Costco (COST) benefits from recession-resistant consumer spending but sports a paltry 0.48% dividend yield. Zoetis combines the growth of a tech stock with the safety of a dividend king.

Conclusion: The Ultimate Crash-Proof Dividend Growth Play

Zoetis is the best dividend growth stock to buy if the market crashes due to its:
- 21.4% dividend growth streak, far outpacing the S&P 500’s 5% average.
- 27x P/E valuation, 34% below its historical average, creating a margin of safety.
- $75 billion market opportunity in animal health, shielded from economic cycles.

Investors should consider “nibbling” into Zoetis now—gradually buying as the market declines—targeting a P/E of 20x (a 26% discount to today’s price). Over the next decade, this stock could deliver 15–20% annualized returns, fueled by its dividend growth and undervalued shares.

In a crash, Zoetis isn’t just a safe haven—it’s a growth engine in disguise.

Data as of Q2 2025. Past performance does not guarantee future results.