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As stock market jitters arise, investors might feel tempted to sell off their holdings. However, seasoned long-term investors understand that decisions driven by emotion can lead to missteps.

Instead of a hasty exit, consider investing in companies aligned with your risk tolerance to meet your financial goals. Dividend stocks offer a reliable source of income, enabling you to avoid selling off positions. Targeted choices include strong contenders like Lockheed Martin (NYSE: LMT), American Water Works (NYSE: AWK), and Kenvue (NYSE: KVUE). All three exhibit resilience in their business models, making them attractive investments for 2025.

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1. Lockheed Martin: A Reliable Dividend Choice

Lockheed Martin’s stock hit an all-time high earlier this year but has since faced a significant downturn, mainly due to concerns about valuation. Its current price-to-earnings (P/E) ratio stands at 17.6, closely aligning with its 10-year average of 17.9.

This defense contractor offers a diversified portfolio — from aeronautics to space systems. While growth prospects may seem modest, the company enjoys stable sales predominantly from the U.S. government, ensuring a consistent revenue stream.

With a history of dividend increases, Lockheed recently announced its 22nd consecutive dividend raise, offering a yield of 2.7% — notably higher than the S&P 500‘s 1.2% yield. Investors concerned about market fluctuations can find comfort in Lockheed’s impressive $166 billion order backlog as of September 29, outclassing projected 2024 sales of $71.25 billion.

In summary, Lockheed Martin is a solid dividend stock at an appealing value as we approach 2025.

2. American Water Works: Stability in Essential Services

American Water Works serves essential drinking water and wastewater services across several U.S. regions, including California and Hawaii. Its straightforward business model collaborates with regulators to ensure fair pricing, allowing the company to operate efficiently and invest in infrastructure.

The focus on dividend growth is compelling, with targeted annual growth rates of 7% to 9% and a payout ratio of 55% to 60%. The recent 13% drop in share price means its dividend yield has risen to 2.5%, making it a prudent choice for conservative investors seeking promise in uncertain times.

Though growth may be slow, American Water Works’ service stability makes it a reliable dividend stock for risk-averse investors in 2025.

3. Kenvue: A Steady Income Source

Kenvue, the consumer healthcare firm, might not exhibit high excitement, but it does present a noteworthy passive income opportunity with a yield of 3.8%.

Brands like Aveeno and Tylenol fall under Kenvue’s umbrella. Rather than depend on rapid innovation, the strategy involves sustaining leadership in established brands and gradually increasing prices. Since its spinoff from Johnson & Johnson in August 2023, Kenvue now carries on J&J’s legacy of consistent dividend payments. Its first dividend increase as an independent entity was a 2.5% raise announced in July, which, while not large, still adds value given the high yield.

Activist investor Starboard Value’s recent stake in Kenvue hints at untapped potential within its leading brands. As steady demand exists for its products regardless of economic fluctuations, Kenvue remains a commendable pick for investors focused on dividend income and capital preservation.

Your Chance for Exceptional Investment Opportunities

Have you ever felt like you’d missed your chance to invest in some of the best-performing stocks? You might find this moment exciting.

Occasionally, financial analysts issue a “Double Down” stock recommendation when they foresee substantial growth potential. If you’re concerned about missing out, now could be an ideal time to buy. Consider these impressive past performances:

• Nvidia: If you invested $1,000 when we doubled down in 2009, you’d have $355,269!*
• Apple: If you invested $1,000 when we doubled down in 2008, you’d have $48,404!*
• Netflix: If you invested $1,000 when we doubled down in 2004, you’d have $489,434!*

Right now, three incredible companies are featured with “Double Down” alerts, offering a potentially rare investment opportunity.

See 3 “Double Down” stocks »

*Stock Advisor returns as of December 23, 2024

Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Kenvue, Johnson & Johnson, and Lockheed Martin. The Motley Fool additionally recommends options: long January 2026 $13 calls on Kenvue. The Motley Fool maintains a disclosure policy.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.