Three Resilient Dividend Stocks for Current Market Conditions

The broader Stock market indexes have shown significant recovery in recent weeks. Despite this, some investors remain concerned that tariffs might push the economy toward recession, which could affect earnings and stock prices over the long term.

Visa (NYSE: V), Kenvue (NYSE: KVUE), and Essential Utilities (NYSE: WTRG) are three dividend-paying stocks that could perform well even if economic conditions worsen. Here’s why these stocks may be worth considering now.

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Visa Demonstrates Strong Resilience

Daniel Foelber (Visa): Visa continues to demonstrate resilience amid economic uncertainty, as reflected in its quarterly earnings report. In the fiscal second quarter of 2025, which ended on March 31, the company announced a 9% increase in revenue and a 10% rise in non-GAAP (adjusted) earnings per share (EPS). Payment volumes surged by 8%, and processed transactions grew by 9%.

At the time of writing, Visa’s stock has risen over 8% year-to-date, contrasting sharply with a less than 1% gain in the financial sector and more than a 5% decline in the S&P 500 (SNPINDEX: ^GSPC). Visa’s strong performance is reinforced by its impressive results.

Visa’s reliable results underscore its effective business model. The company earns fees based on transaction volume and frequency. Therefore, even if consumer spending declines during a downturn, Visa remains well-positioned to generate significant free cash flow.

Over the years, Visa has broadened its cross-border volume, reducing its reliance on U.S. payment volumes. In the first half of fiscal 2025, Visa produced an impressive $9.42 billion in free cash flow, allocating $8.41 billion to stock repurchases and $2.33 billion to dividends. Although Visa’s stock currently yields just 0.7%, this low yield is a result of its outstanding stock performance over the years—investors would see a yield of over 3% if all capital returns were issued as dividends instead of stock buybacks.

For the full fiscal year, Visa expects low-double-digit net revenue growth and a low-teens increase in diluted EPS. This growth rate meets investor expectations, indicating that the company continues to operate effectively even amidst tariff challenges and economic uncertainties.

With a price-to-earnings (P/E) ratio of 34.4, Visa exceeds its 10-year median P/E of 33.1. However, given its strong performance, the premium valuation can be rationalized.

Management’s Potential for Value Creation in Kenvue

Lee Samaha (Kenvue): The spinoff from Johnson & Johnson currently yields 3.5% and presents a value opportunity in a stable industry. While many firms face performance challenges based on market conditions in 2025, Kenvue’s trajectory is heavily influenced by management’s ability to revitalize its underperforming skin health and beauty segment, which includes well-known brands like Aveeno and Neutrogena.

This presents a classic value stock scenario: investors hope to realize significant value as the company strives to enhance this segment’s performance to match that of its competitors, such as Beiersdorf and L’Oreal.

However, management has acknowledged that the recovery is taking longer than expected. Kenvue is investing in brand marketing and in-store promotions to regain the segment’s growth rate; organic sales saw a decline of 1.9% in 2024. On a brighter note, Neutrogena regained its No. 1 position in the U.S. face care market, and the segment remains strong in Europe and Latin America.

In other areas, Kenvue is performing reasonably well. Its other two segments—self-care products (featuring Tylenol, Benadryl, and Nicorette) and essential health goods (like Listerine and Band-Aid)—saw organic sales growth of 1.9% and 4.1% respectively in 2024.

Kenvue is also collaborating with activist investor Starboard Value, having appointed three new members to its board of directors. This move reassures investors that Kenvue is serious about improving its performance.

While the operational improvement is not guaranteed, the stock appears to be a fair value, and its dividend offers added reassurance. Thus, the downside risk seems limited, while potential upside exists if management executes effectively.

Essential Utilities: A Solid Choice for Conservative Investors

Scott Levine (Essential Utilities): Amid considerable media focus on market pessimism, it can be challenging for investors to maintain their optimism—yet there are stocks that help minimize anxiety during such turbulent periods. Essential Utilities serves as a water utility, offering cautious investors an opportunity to strengthen their portfolios and benefit from the stock’s attractive 3.2% forward dividend yield.

Even as some consumers limit spending on dining out or delay major purchases, water usage remains largely unaffected. This stable demand makes Essential Utilities appealing, providing water and wastewater services to 1.1 million customers, with 99% of its earnings sourced from these essential services.

It’s worth noting that both water and wastewater segments operate in regulated markets. This regulatory framework guarantees certain returns, ensuring revenue stability for Essential Utilities. Furthermore, the company’s resilience in the face of the current economic environment positions it as a reliable investment choice.