Volatility Is Spiking. Here Are 3 Dividend Stocks You Can Buy Without Hesitation.
Key Points
Johnson & Johnson has a stronger credit rating than the U.S. government.
PepsiCo's brand loyalty gives it considerable pricing power.
Walmart ranks among the most recession-resistant stocks on the market.
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Fear is in the air. Sure, the S&P 500 (SNPINDEX: ^GSPC) is holding up pretty well in the face of significant uncertainty. However, implied volatility has risen sharply in recent weeks.
Should investors stay away from all stocks with a 10-foot pole? Nope. Here are three dividend stocks you can buy with no hesitation.
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1. Johnson & Johnson
Johnson & Johnson (NYSE: JNJ) remains a favorite among investors who want to sleep at night without worrying about their portfolios. The healthcare giant has an AAA credit rating -- higher than that of the U.S. government.
J&J is a member of the Dividend Kings, a group of stocks that have increased their dividends for at least 50 years. Its streak currently stands at 63 straight years of dividend hikes, but that number is likely to increase soon. Johnson & Johnson's dividend yield tops 2.1%.
Importantly, healthcare demand is typically steady regardless of what's happening with the stock market or the economy. Johnson & Johnson's business should therefore hum along even if current dynamics worsen.
2. PepsiCo
PepsiCo (NASDAQ: PEP) doesn't only market sodas. The company has built a food and drink empire that includes brands such as Aquafina, Bubly, Cap'n Crunch, Cheetos, Cracker Jack, Doritos, Fritos, Gatorade, Lays, Lipton, Ocean Spray, Quaker, Ruffles, Tostitos, and more.
Customers are loyal to these brands, which gives PepsiCo pricing power. The company's products are small "luxuries" that consumers are unlikely to give up. Even if inflation surges, PepsiCo should still deliver solid profits.
Like Johnson & Johnson, this consumer staples stock is a Dividend King and increased its dividend for the 54th consecutive year roughly two months ago. PepsiCo also offers a juicy forward dividend yield of 3.7%.
3. Walmart
If you're concerned about the U.S. economy entering a recession, Walmart (NASDAQ: WMT) stands out as one of the most recession-resistant stocks on the market. The key to Walmart's resilience is its top-tier underlying business.
Walmart is known for its everyday low prices. The company operates more than 3,500 supercenters and over 1,000 smaller stores throughout the U.S. It has also become a formidable player in e-commerce. Consumers seeking to tighten their purse strings buy from Walmart during both good and bad economic conditions.
This stock is also not so coincidentally a Dividend King. Walmart has increased its dividend for 53 consecutive years. Although the company's dividend yield of 0.8% isn't especially high, its stability and steady growth make it an ideal pick for anxious investors.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.
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