When the stock market as a whole becomes correlated in one single path lower, as it has recently done amid President Trump's recent trade tariff announcements, capital starts to rotate in and out of certain areas. As investors have seen recently, some market areas have seen worse price action than others, suggesting that preferences have begun shifting already.
With this in mind, strong fundamentals matter more than ever, making it crucial to focus on the right opportunities—a move that can not only protect portfolios but also push them back into the green. Anticipating what other investors might want to own in the near future is one way to make incredible returns in the market, and that is where today’s list of dividend stocks comes into play.
Focused on the safest areas of the economy, such as the consumer defensive sector and the real estate sector, this list can carry investors through this recent turmoil and even ensure that their portfolios retain some sort of return as well. Names like Realty Income Co. (NYSE: O), Altria Group Inc. (NYSE: MO), and Phillip Morris International Inc. (NYSE: PM) all act in the same way and theme during today’s elevated volatility environment.
The Safest Property Portfolio: Realty Income
[content-module:DividendStats|NYSE: O]Not all real estate investment trusts (REITs) are created equal. Some in the residential or consumer sector (like malls) may see higher-than-usual volatility when the underlying economic situation remains uncertain, as it is today. On the other hand, there are portfolios like Realty Income’s that focus on leasing to defensive tenants only.
With this stability, investors gain an added benefit through a much lower beta, implying less volatility and risk. This is a much-needed benefit during today’s uncertainty. With this stability at hand, management is able to pay out not a quarterly but a monthly dividend to shareholders.
This added liquidity of $3.22 per share translates into an annualized dividend yield of u to 5.9%. Buying the dips on attractive businesses when this volatility spike subsides will be made easier with this additional income and liquidity coming in every month.
This is why up to $4.7 million of institutional capital has made its way into Realty Income stock for this quarter alone, which began merely a week ago in April 2025. These might also be the reasons that Wall Street analysts have kept a $62.4 per share price target on the stock, calling for as much as 13.3% upside from today’s prices, not common in REITs.
As Defensive as It Gets: Tobacco
Although cigarette smoking has slowed in recent years, nicotine remains—for better or worse—a habit many consumers can’t shake. Whether through vaping or the latest breakout in nicotine patch use, two stocks are deeply entrenched in this enduring trend.
Altria Group: Steady Cash Flow and Attractive Yield
[content-module:DividendStats|NYSE: MO]As cash flows and sales become predictable, if not outright stable, in these consumption trends, these are companies that can easily manage their finances and afford ongoing dividends.
Altria Group offers its shareholders as much as $4.08 per share in payouts, which is a 7.3% annualized dividend yield at today’s prices.
In addition, Altria's long-standing dominance in the U.S. tobacco market gives it a defensive edge in uncertain economic times.
With strong brand loyalty and pricing power, the company is positioned to keep rewarding investors even as traditional cigarette use declines.
Altria has consistently raised its dividend for over 50 consecutive years, making it a Dividend King.
Backed by strong free cash flow generation and modest leverage relative to earnings, the company’s dividend appears secure and well-covered heading into the future.
Philip Morris International: Global Reach and Market Outperformance
[content-module:DividendStats|NYSE: PM]Then there is Phillip Morris, who chose to go with a $5.4 per share in dividends. That yield, while not as high as Altria’s, still beats the inflation rate in the United States economy at 3.6% in yield.
Of course, locking in a high-income yield is not the only reason investors should buy a stock.
These are also low-beta stocks that have proven their benefits in recent price action.
For example, as the S&P 500 index has declined by over 15.6% in the past quarter alone, Phillip Morris stock managed to keep above ground with an impressive return of 23.5%, crystalizing the fact that markets now prefer to go with safety rather than excitement.
In addition to its stability, Philip Morris has been aggressively expanding into smoke-free products, which now make up a growing share of its revenue. This strategic pivot not only future-proofs the business but also signals management’s ability to adapt to shifting consumer preferences.
Combined with a healthy balance sheet and global market reach, Philip Morris offers a compelling blend of income and resilience for investors seeking long-term security.
Upside and Income, Best of Both
While investors can get a much higher yield in Altria, the safety and preference for this stock seems to be already priced in, as judged by Wall Street’s consensus price target. Therefore, investors worried about locking in high yields can satisfy that need in Altria but then find a tradeoff in Phillip Morris.
As the stock trades at a price-to-earnings (P/E) ratio of up to 33.4x today, Phillip Morris commands a steep premium above the rest of the staples sector and its average P/E of 15.5x. Markets will typically pay up for stocks that expect to outperform the individual peer group as well as the broader market, something that Phillip Morris has proven it can do.
More than that, as of February 2025, analysts from Barclays decided to reiterate their Overweight rating on Phillip Morris stock, this time placing a $175 price target on it as well. From where the stock trades today, this view would imply a net upside potential of as much as 16.3% to reiterate the benefits investors can enjoy here.
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