Worried About a Market Crash? These 3 Dividend Stocks Could Help Reduce Your Risk

Whether you believe there's a bubble in tech or are just worried about rising valuations in the stock market, there's ample reason to want to reduce risk right now. By diversifying into dividend stocks with stable businesses, you can make your portfolio less vulnerable in the event of a market crash or correction in the near future.

While no investment is entirely free of risk, three dividend stocks that can be great options today are Medtronic (NYSE: MDT), Realty Income (NYSE: O), and ExxonMobil (NYSE: XOM). Here's why these low-volatility stocks can be a good option for reducing your exposure to the stock market's potentially wild swings.

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Medtronic

Medtronic is a leading device maker in the healthcare industry, benefiting from an ongoing need for its products. Healthcare is essential, and demand will remain strong regardless of economic cycles or market volatility. Medtronic's products are used worldwide to treat many conditions.

That stability is evident in its top line, which has been steadily growing. The company did have a particularly strong performance in its most recent fiscal year (which ended on April 24), marking its best annual revenue growth in a decade. But at 8%, it wasn't exactly a terribly high rate of growth. It does, however, underscore the fairly consistent and mild level of growth it typically generates on a yearly basis.

That consistency is what makes Medtronic an appealing stock to own. It has averaged a beta of 0.60, which is well below 1.0 (which would indicate a stock moves in unison with the market). It also pays a fairly high dividend that yields 3.6%; the S&P 500 average is just 1.1%. And with the stock trading at just 13 times its estimated future earnings, based on analyst estimates, it's a fairly cheap buy right now.

Realty Income

A top real estate investment trust (REIT) such as Realty Income can also make for a dependable dividend stock to buy and hold. Its business has grown faster than Medtronic's over the years by adding to its portfolio of properties, enabling it to grow revenue more quickly. In 2025, the company's top line rose by 9%, to $5.7 billion.

And as it adds to its portfolio, it gains a new baseline for recurring revenue. By focusing on a diverse mix of tenants, the REIT isn't too vulnerable to any one company, which is why it can be a suitable option for risk-averse investors. Its beta is 0.73, indicating that it's a bit more volatile than Medtronic, but still fairly stable overall.

The big appeal about REITs is their consistency, reliability, and, of course, dividend income. Realty Income currently yields 5.2%, which is the highest payout on this list. The company has also been routinely increasing its dividend, making it highly likely that the dividend income you collect from the stock will rise significantly in the future.

ExxonMobil

Oil and gas stocks can also make for good investments if you want to reduce risk. And what better option than to consider one of the iconic leaders in the space -- ExxonMobil. The oil and gas giant is known for being a stable income stock, having raised its dividend for decades.

It yields 2.9% today, and that would be a fair bit higher if not for the stock's 26% surge over the past year, as investors have pivoted to oil and gas stocks amid the war in Iran, which has pushed oil prices higher. Exxon's beta is the lowest on this list at just 0.15, indicating that whatever moves the broader market makes are likely to have a limited impact on its share price.

When the S&P 500 crashed by 19% in 2022, Exxon's stock soared by 80%. That might not happen if there's another downturn, but it's an example of why it can be a good investment if you want to diversify your portfolio and collect some excellent dividend income along the way.

David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Medtronic and Realty Income. The Motley Fool has a disclosure policy.