My 3 Top Stocks to Buy in a Market That's Highly Volatile (Again)

Key Points

• Dominion Energy is the kind of stable utility stock that's great to own during turbulent markets.

• Enbridge has a lower risk than ever before with its midstream and natural gas utility businesses.

• Vertex Pharmaceuticals boasts a strong cystic fibrosis franchise along with exciting new products and pipeline candidates.

• 10 stocks we like better than Dominion Energy ›

"Please fasten your seatbelts."

Anyone who has flown frequently has probably heard those words before. It's what airline pilots and flight attendants tell passengers when the ride is about to get bumpy.

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If you haven't noticed yet, stock market turbulence has returned thanks to a familiar culprit -- tariffs. I suspect it could get worse. Investors may want to fasten their seatbelts metaphorically.

However, being cautious doesn't mean you can't still put money to work. Here are my three top stocks to buy in a market that's highly volatile (again).

Image source: Getty Images.

1. Dominion Energy

Utility stocks tend to fare quite well during turbulent markets. It's easy to see why. Their businesses and revenue streams are largely immune to bad things that happen at the macroeconomic level. Many utilities are regulated monopolies, so they don't even have to worry about competitive threats.

I think Dominion Energy (NYSE: D) is a fantastic utility stock to buy with renewed market volatility. The company provides electricity to 3.6 million residential and business customers in Virginia, North Carolina, and South Carolina. It provides natural gas service to around 500,000 customers in South Carolina. Dominion is also a leading developer of renewable energy. As you might guess, this is the kind of stable business that's great to own when the going gets tough.

Another positive about most utility stocks is that they pay solid dividends. Dominion Energy checks off this box, too. Its forward dividend yield is 4.64% right now. Even if the stock treads water, investors can still make money.

One knock against utility stocks is that they can be boring. However, I don't think that's true for Dominion Energy. Why? For one thing, the company serves markets with fast-growing populations. Also, Dominion's home state of Virginia is the hottest spot on the planet for data centers. With a huge artificial intelligence (AI) tailwind driving data center demand, Dominion's growth prospects look good.

2. Enbridge

A few years ago, Enbridge (NYSE: ENB) probably wouldn't have ranked among my top three stocks to buy in a volatile market. Granted, it wouldn't have been a bad choice. The company's pipelines would still transport oil and gas throughout the U.S. and Canada regardless of stock market dynamics.

Today, though, Enbridge is arguably less risky than ever. Its 2023 acquisitions of three U.S. businesses previously owned by Dominion Energy increased Enbridge's stability. The company is now the largest natural gas utility in North America based on volume.

Enbridge is still classified as a midstream energy stock. However, the company says that it has "a utility-like business profile." That's a good description, in my opinion. Enbridge also pays a dividend that's even better than utility-like, with a yield of 6.11%.

Could the Trump administration's tariff on Canadian imports hurt Enbridge, since many of the company's pipelines transport oil and gas from Canada to the U.S.? I don't think so, at least not all that much. It helps that tariffs on energy imports are 10%, well below the 25% level on most products. More importantly, the U.S. needs Canadian fuels.

3. Vertex Pharmaceuticals

Vertex Pharmaceuticals (NASDAQ: VRTX) isn't a regulated monopoly like Dominion Energy. However, the big biotech company markets the only therapies that treat the underlying cause of cystic fibrosis (CF), a rare genetic disease. You can bet the farm that physicians will continue prescribing Vertex's CF drugs, patients will continue taking them, and insurers will still pay for them regardless of what happens with the stock market.

I expect Vertex's CF business will strengthen in 2025 and over the next few years. Its newest CF therapy, Alyftrek, is as powerful as the company's current top-seller, Trikafta. But its once-daily dosage is more convenient. In addition, Vertex pays lower royalties on Alyftrek than it does with its other CF drugs. There's good news across the board with this new therapy.

But Vertex has even better news. The company recently launched another new drug called Journavx. It's the first new class of pain medication approved by the U.S. Food and Drug Administration in over two decades. Journavx isn't an opioid and doesn't have the addictive qualities and side effects associated with opioids. I predict this drug will quickly become another blockbuster for Vertex.

As icing on the cake, Vertex's pipeline is loaded with promising candidates. I'll mention just one of them: povetacicept. This late-stage program targets IgA nephropathy, a kidney disease that affects more than 1 million patients -- nearly 10 times the patient population for CF.

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Keith Speights has positions in Dominion Energy, Enbridge, and Vertex Pharmaceuticals. The Motley Fool has positions in and recommends Enbridge and Vertex Pharmaceuticals. The Motley Fool recommends Dominion Energy. The Motley Fool has a disclosure policy.