We just endured a recession that was the worst since the Great Depression. Since the recession ended, the economic recovery has been weak to say the least. Forecasts for economic growth in 2011 and 2012 are hardly awe inspiring.

While anything can happen and the stock market has cyclical bounces and dips at any time along the way, it is only reasonable to seek out investments that have performed well under similar economic circumstances — times of tepid economic growth. Let’s take a look back…

In the economic malaise of 1974 through 1982, GDP growth averaged an anemic +2% per year. During this period, the S&P’s price return was an annualized +4.14% — but total return for this period, which also included dividends, averaged +9.39% per year. That means dividends accounted for most of the market’s total return.

History suggests that it might be a good time to take a look at some reliable dividend paying stocks. Special attention should be paid to those companies that pay secure dividends in good times and bad as well as stocks that the market recovery has neglected.

AT&T (NYSE: T)
This more-than 100-year old company is one of the largest telecommunications providers in the world. The company is the second largest wireless provider in the country, the dominant local phone company in 22 states, and a wireless services provider in more than 220 countries.

Major telecom companies today generally offer steady cash flow but limited growth. A major growth driver in the wireless industry has been data services (Internet access from phones and other mobile devices). AT&T has been far outgrowing rival Verizon (NYSE: VZ) in this area, primarily because AT&T has had exclusive rights to offer Apple’s (Nasdaq: AAPL) iPhone. But, it is widely expected that AT&T will lose exclusivity early next year.

Investors in AT&T have largely dismissed solid recent results in anticipation of lower future results next year. But I think this fear has been overemphasized. While results will likely slip somewhat, the company has plenty of room to grow data services, as 43% of its wireless customers still don’t use them. As well, AT&T has been adding subscribers at a solid pace apart from the iPhone, and other phones are becoming increasingly competitive.

The stock pays quarterly dividends, which at the current rate of $0.42 per share, translates to $1.68 a year for a stellar yield of nearly 6.0%. The company has raised the dividend every year since 1998. The dividend is also rock solid: In the first nine months of 2010, the telecom giant generated free cash flow of $11.6 billion and paid out $7.4 billion in dividends. In the past six quarters, the company had more than $9 billion in free cash flow left over after dividends.

Eli Lilly and Company (NYSE: LLY)
Founded in 1876, Eli Lilly is one of the largest pharmaceutical companies in the world. The company makes top drugs in a variety of areas, including antidepressant drug Prozac and neurological drug Zyprexa. Its products are sold in 143 countries and the company generated about $22 billion in revenue for 2009.

Like most big pharma companies, Lilly faces significant patent expirations in the next several years. But the company’s patent expirations are particularly steep even for the industry, as drugs representing about 40% of sales will lose patent protection between 2011 and 2013.

However, the looming expirations are factored into the price already and the company has taken significant steps to develop new sources of revenue. The company acquired biotech giant Imclone in 2008 and has been investing heavily in its internal pipeline of new drugs. Meanwhile, the stock currently sells for less than eight times earnings, compared with an industry average of 13.

Lilly pays quarterly dividends of $0.49, which translates to a generous 5.7% yield based on recent prices. The dividend has nearly doubled in the past decade and is still well supported with a payout ratio of less than 50% of net income.

Consolidated Edison (NYSE: ED)
Con Ed is the primary electric utility in southeastern New York (including New York City) and also operates in New Jersey and Pennsylvania. The company provides electricity (more than three quarters of revenue), steam and natural gas. It is one of the nation’s oldest utilities, and about 80% of revenue is generated in its regulated segment.

The company has a well-entrenched and difficult-to-duplicate infrastructure in a high demand area and should continue to deliver solid results. Con Ed is in the process of updating and expanding its systems, for which it has been granted a rate increase, and should boost future revenue.

The stock has outperformed both Morningstar’s regulated utilities group and the S&P 500 in every measurable period for the past fifteen years, averaging total annual returns of +7% for the past 10 years, compared with less than +1% for the S&P. But the stock still sells for 14 times earnings compared with the industry average of 22.

As for the dividend, the company pays a current rate of $2.38 a year per share, which translates to a well-above industry average yield of nearly 5.0%. The dividend should grow, too, considering the utility has raised it every year for the past 36 years.

Action to Take –> All three of these companies are reasonably valued, operate in defensive industries and have secure dividends with growth potential. The current market may be ideal for stocks with these characteristics and all can be purchased at current prices.