Stock Market Sell-Off: 2 No-Brainer Stocks to Buy Right Now

On April 2, the Trump administration roiled financial markets by introducing wide-ranging tariffs on most of America's trading partners. In addition to a baseline 10% tariff on all imports, the government is expected to start collecting levies of up to 49% on some countries in a move that could dramatically hurt global trade and economic growth.

Stocks are in a freefall, with the S&P 500 down around 15% year to date. However, within the turmoil, some companies are holding up better than others and may make good buys for investors with a long-term perspective. Let's explore why Realty Income (NYSE: O) and Dollar General (NYSE: DG) may have a place in your portfolio.

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Realty Income

Since its founding in 1969, Realty Income has grown to become one of America's most successful real estate investment trusts (REITs) -- a special type of business designed to avoid corporate taxes by returning most of its profits to shareholders through a dividend. It has survived multiple U.S. recessions, bouncing back stronger every time.

What is the secret to Realty Income's longevity and success? Portfolio quality and diversification. Instead of investing in the boom-and-bust housing markets or big city offices, it bets on regular American consumers.

Most of its properties are leased to retail and industrial clients that serve low-priced nondiscretionary goods. These include grocery stores, dollar stores, and automotive services -- things that will likely stay in demand no matter what happens to the rest of the economy. Best of all, around 87% of the company's revenue is earned in the U.S., which is an advantage as the world's largest economy pivots away from international trade.

Realty Income currently offers a dividend yield of 5.84%, and it is part of the Dividend Aristocrats Index, which means it has increased its dividend payout for at least 25 consecutive years.

Dollar General

Analysts at J.P. Morgan give the U.S. economy a 60% chance of entering a recession in 2025. However, a weak economy can benefit companies that focus on low-priced consumer goods, especially in less advantaged areas. Dollar General is built to thrive in this kind of environment.

Unlike a traditional big box retailer, Dollar General offers a relatively bare-bones shopping experience. Its stores are often located in rural or inner city areas where the costs of rent and labor are lower. The company also offers private-label brands that are cheaper than mainstream alternatives. The goal is to pass these cost savings to customers who may be too far away from other low-priced alternatives like Walmart.

Image source: Getty Images.

While it is still early in the year, Dollar General stock is holding up better than the broader market during this worsening economic landscape.

Shares are up 22% year to date, compared to the S&P 500's decline of 15%. Investors should expect continued outperformance because the stock boasts a forward price-to-earnings (P/E) multiple of just 17, compared to the market average estimate of around 20. Shares currently boast an attractive dividend yield of 2.55%.

A falling knife or a golden opportunity?

Realty Income and Dollar General are already trading at valuations that look attractive relative to their long-term potential. That said, this is a period of major uncertainty, because we are yet to see the full brunt of Trump's tariff policy. More risk-averse investors may want to wait for the volatility to settle before getting into the market.

Should you invest $1,000 in Realty Income right now?

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Will Ebiefung has positions in Realty Income. The Motley Fool has positions in and recommends Realty Income and Walmart. The Motley Fool has a disclosure policy.