Why Johnson & Johnson, Altria, Verizon, and Other Safe Dividend Stocks Climbed Today
Key Points
Traders rotated out of high-flying semiconductor stocks and into less volatile investments.
Dividend stocks can help you protect your wealth.
- 10 stocks we like better than Verizon Communications ›
The rally in artificial intelligence (AI) chip stocks ran out of steam on Tuesday, driving investors to seek refuge in steadier, dividend-paying stocks.
By the close of trading, Johnson & Johnson (NYSE: JNJ), Altria (NYSE: MO), and Verizon (NYSE: VZ) all enjoyed share price gains of at least 3%.
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Defensive stocks are becoming popular again
With many AI stocks up sharply over the past year, concerns of a possible bubble in tech stock valuations are mounting. Even massively popular stocks like SpaceX have pulled back from their highs in recent days.
That's forcing short-term focused traders to dial back the risk profiles of their portfolios. Yet traditional safe havens like gold are also underperforming, due in part to fears that persistent inflation could force the Federal Reserve to raise interest rates.
Investors seeking to prudently manage risk are thus beginning to allocate more capital to blue chip dividend stocks, as their appreciation for the steady cash-generating capabilities of defensive giants like J&J, Altria, and Verizon grows.
3 solid dividend stocks for your watch list
If you think Johnson & Johnson is just some stodgy drugmaker, think again. The healthcare titan also offers investors diversified exposure to innovative medical devices and advanced technologies, such as robotic surgery. J&J has raised its dividend for a remarkable 64 straight years.
Altria is battling declining smoking rates with consistent price increases and cost reductions. At the same time, oral nicotine pouches like on! and other smoke-free products are providing new sources of growth. Altria's stock sports a hefty dividend yield of nearly 6%.
Verizon's new marketing strategy is designed to eliminate customer pain points by offering simple, cost-effective wireless and home internet plans. The telecom leader, in turn, expects to gain up to 1 million new retail postpaid phone subscribers in 2026. And its shares are trading for less than 10 times its projected earnings for this year.
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Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson and Verizon Communications. The Motley Fool has a disclosure policy.
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