My 3 Favorite Dividend Stocks to Own When the Market Gets Ugly

The S&P 500 (SNPINDEX: ^GSPC) has recovered most of its losses from this year and is roughly flat year to date as of this writing. However, it's correlating with what's happening with the war in Iran, and if the ceasefire doesn't hold or there's continued volatility in oil prices, it could plunge again.

Successful investing means holding on through challenging times and changing markets. Part of that is owning excellent dividend stocks that protect your portfolio when things get rough. If you need some protection, I recommend Realty Income (NYSE: O), Walmart (NASDAQ: WMT), and Coca-Cola (NYSE: KO).

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1. Realty Income

Realty Income is a real estate investment trust (REIT), a type of structure where the company pays out 90% of its earnings as dividends. That's why many dividend investors have a few REITs in their portfolios. Realty Income is one of the largest REITs in the world, and it's focused on essential retail, although it has diversified into some other industries.

Essential retail is an important part of its model, since its tenants are predominantly large chain stores that can reliably pay their rent and withstand changing economies. Its top tenants by size are 7-Eleven, Dollar General, and Walgreens, and grocers make up 11% of its renter base. Its typical lease agreement is long term, which implies committed revenue for several years, and it sports a 98.9% occupancy rate. That's why Realty Income stock offers resilience and protection during recessions and other difficult times.

Realty Income grows in two main ways: acquiring other REITs and buying more properties. It had $121 billion in sourced volume last year, of which it acquired 5%, which means it consistently has ways to ensure dividend growth.

Realty Income has a specific perk that most dividend stocks can't match: It pays a monthly dividend, and it has done so for more than 55 years without missing a month. It has raised the dividend quarterly for the past 114 quarters, and the dividend yields a high 5.1%.

2. Walmart

Walmart's more than 5,000 U.S. discount stores reach 90% of the population, and it's always finding ways to open new stores, improve its systems, and innovate across its platforms. Recently, e-commerce has been an important growth driver, up 24% year over year in the 2026 fiscal fourth quarter (ended Jan. 31). One way it has an edge in e-commerce is through using its vast store base as a fulfillment network.

in addition to its U.S. operations, Walmart has a massive global presence with nearly 11,000 stores plus e-commerce, providing diversification and new opportunities.

Walmart's strength and stability, as well as its consistent growth, make it an excellent anchor stock to own at any time, and even more so when there's market chaos. That's why even though it's not your typical young growth stock, Walmart stock has trounced the S&P 500 over the past five years, up 190% versus 78% for the broader index.

Walmart is a Dividend King, or a company that has raised its dividend for at least 50 years, and it has raised its dividend through thick and thin for the past 53 years. That's a dividend you can count on whether there's a bull or bear market or in any kind of economy.

3. Coca-Cola

Coca-Cola is the world's largest beverage company, and it's been in operation for more than a century. It has a well-established model of acquiring new brands that add growth to the business, and incorporating them into its global distribution system improves profitability.

However, its eponymous Coca-Cola-branded drinks do most of the heavy lifting for the company, and loyal fans continue to buy these cheap luxuries through all kinds of circumstances. Sales increased 5% year over year in the 2025 fourth quarter.

Coca-Cola is also a Dividend King, and it has one of the longest histories of raising its dividend at 64 years. That's why investors feel they can count on Coca-Cola to provide passive income, even when the company's payout ratio has surpassed 100%. That's real commitment.

That's why Coca-Cola stock inevitably does well when the market is experiencing upheaval. It's up 12% this year while the S&P 500 is roughly flat. Coca-Cola's dividend typically yields around 3%, but it's only at 2.7% at its recent price because the stock has performed so well.

If you're looking for a forever stock that can shield your portfolio when things get ugly, Coca-Cola is an excellent candidate.

Jennifer Saibil has positions in Walmart. The Motley Fool has positions in and recommends Realty Income and Walmart. The Motley Fool has a disclosure policy.