Unlock Steady Gains: 7 Dividend Stocks Poised to Outperform, Defy Market Volatility

A recent analysis by Hartford Funds, conducted in collaboration with Ned Davis Research, suggests that dividend-growing stocks have historically outperformed the broader market over extended periods while exhibiting lower volatility. This trend indicates that companies capable of consistently increasing their dividend payments often possess stable business models and strong cash management, making them potentially appealing for long-term investment portfolios.

Investing in Dividend-Growing Stocks

Companies that consistently reward shareholders with steady dividend payments are often seen as indicators of financial strength and stability. The ability to maintain and raise dividends over time signals robust business health, which can be a key factor for investors seeking a combination of income and growth.

Seven Dividend Stocks for Long-Term Portfolios

For investors interested in dividend-paying companies, the following seven stocks are highlighted for their consistent performance and dividend growth.

Coca-Cola (KO)

Coca-Cola’s market appeal is attributed to its global brand portfolio, extensive distribution network, and high-margin beverage concentrate model. Operating in over 200 countries, the company generates steady cash flows, with bottlers typically bearing most capital costs. Coca-Cola has increased its dividend for 63 consecutive years, reflecting consistent free-cash-flow generation and disciplined capital management.

Procter & Gamble (PG)

Procter & Gamble is recognized for its dividend reliability, having made uninterrupted payments for over 135 years and grown its dividend for 69 consecutive years. The company’s strength stems from its portfolio of trusted consumer brands, including Tide and Pampers, which deliver consistent, recession-resistant cash flow. Its scale and global reach enable stable margins even amidst inflationary pressures.

Enterprise Products Partners (EPD)

Enterprise Products Partners operates as a master limited partnership (MLP) managing a fee-based energy infrastructure network across North America. The company’s revenue primarily derives from fee-based contracts tied to the volume of oil, gas, and natural gas liquids transported, rather than commodity prices, insulating it from market volatility. Enterprise Products Partners has increased its distribution for 26 consecutive years, supported by its stable model and growth in domestic energy production.

ExxonMobil (XOM)

ExxonMobil functions as an integrated oil and gas company, engaging in activities from exploration and production (upstream) to refining and product manufacturing (downstream). This diversified business model helps the company navigate volatile oil prices and has contributed to 42 consecutive years of dividend growth. Its strategic expansions into liquefied natural gas (LNG), Guyana oil production, and low-carbon technologies are expected to enhance future cash-flow resilience.

Realty Income (O)

Realty Income, a diversified real estate investment trust (REIT), is known for its monthly dividend payments. The company holds a portfolio of over 15,000 properties leased to creditworthy tenants such as Walgreens and Dollar General, primarily through long-term triple-net leases. This lease structure shifts most property expenses to tenants, ensuring predictable cash flow and enabling dividend increases every year since 1994.

Aflac (AFL)

Aflac provides life and supplemental insurance, offering coverage that complements traditional health plans. The company’s stability as a dividend payer is rooted in its conservative underwriting practices and strong market presence in both the U.S. and Japan. Aflac has a history of profitability, fueling its dividend, which has seen consistent growth for over 42 years, supported by a focus on high-return insurance lines and disciplined cost control.

Chubb (CB)

Chubb is a global insurance provider with operations in 54 countries, offering a range of policies including commercial and consumer property and casualty (P&C), personal accident, and life insurance. The company’s strength is its underwriting discipline, consistently achieving a combined ratio that outperforms the industry average. Chubb has recorded more than three decades of uninterrupted dividend increases, with a payout ratio of 33%, suggesting sustainability and potential for continued growth.

Key Takeaways

For investors seeking to build long-term wealth, focusing on companies with a history of consistent dividend growth can offer both a reliable income stream and potential for capital appreciation, underpinned by strong operational fundamentals and disciplined financial management.