Top Dividend Stocks to Consider Amid Market Volatility

As market conditions fluctuate, now is a favorable time to consider dividend stocks that can provide stability. With tariffs continuing to be a significant concern, they are likely to influence stock performance in both the near and medium term.

This article explores four stocks with appealing yields that are worth buying at this time.

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Energy Transfer and Enterprise Products Partners

Two prominent midstream master limited partnerships (MLPs) in the U.S., Energy Transfer (NYSE: ET) and Enterprise Products Partners (NYSE: EPD), offer robust distributions backed by their distributable cash flow. This cash flow is derived from operating cash flow minus maintenance capital expenditures (capex). Currently, Energy Transfer boasts an 8.3% forward yield, while Enterprise’s yield is 7.4%.

Both companies benefit from rising natural gas demand and enjoy a largely fee-based business model—over 80%—that includes minimum volume commitments or take-or-pay provisions. These arrangements safeguard their cash flows, even during periods of economic or energy sector weakness. Furthermore, Enterprise has a storied history of resilience, having increased its distribution for 26 consecutive years.

However, they are not immune to tariff impacts. Both companies are pursuing growth opportunities, but tariffs on materials like steel could inflate project costs, potentially eroding project returns if they cannot pass those costs to customers. Additionally, both firms export natural gas liquids (NGLs), making them susceptible to retaliatory tariffs.

Despite these challenges, both are solid companies trading at attractive valuations, poised to benefit from ongoing natural gas demand driven by the rise of artificial intelligence (AI). Energy Transfer trades at an enterprise value (EV)-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple of 8.1 times, while Enterprise stands at 9.8. Both figures are notably below the average 13.7 times EV/EBITDA multiple seen from 2011 to 2016, during which time the companies maintained weaker balance sheets and narrower distribution coverage ratios.

Image source: Getty Images.

Philip Morris International

Philip Morris International (NYSE: PM) stands out as a growth stock within a defensive sector, offering an enticing dividend yield of 3.6%.

The company has limited exposure to tariffs, with its traditional cigarettes and IQOS heated tobacco units (HTUs) manufactured and sold outside the U.S. Its Zyn nicotine pouches are produced and sold domestically, and its association with the China National Tobacco Company (CNTC) for the Marlboro brand limits tariff exposure in that market.

Growth for Philip Morris is propelled by its smokeless portfolio, particularly Zyn and IQOS. Zyn has shown remarkable growth, with volumes climbing 46% to 183.8 million cans last quarter. The company anticipates Zyn volumes will grow 34% to 41% this year, equating to 780 million to 820 million cans. IQOS volumes also rose 13% last quarter, and the company plans to reintroduce IQOS to the U.S. market after regaining the rights from Altria.

Importantly, Zyn and IQOS offer better economics than traditional cigarettes. The product contribution level for Zyn is six times that of cigarettes, while IQOS is between 2 to 2.5 times better.

Valuation-wise, the stock trades at a forward price-to-earnings (P/E) ratio of over 21 times this year’s analyst consensus, with a price/earnings-to-growth (PEG) ratio below 0.4. Generally, stocks with PEGs under 1 suggest undervaluation.

Verizon

In an economic downturn, consumer dependence on cell phone service and broadband makes Verizon Communications (NYSE: VZ) and its current 6.4% yield an appealing choice.

The telecom giant has experienced modest revenue growth, hindered by churn from its legacy businesses and the phasing out of the Affordable Connectivity Program, which previously subsidized wireless internet for lower-income households. Nevertheless, strong subscriber growth in both wireless and broadband segments is promising.

Additionally, Verizon is actively pursuing opportunities in the artificial intelligence (AI) sector with its AI Connect solution, leveraging existing fiber and 5G assets to handle AI workloads. Major companies like Alphabet and Meta Platforms are already utilizing this service. Verizon is also in the process of acquiring Frontier Communications, which will enhance its fiber network and support its plans for an “intelligent edge network” focused on AI and the Internet of Things (IoT). Moreover, collaboration with Alphabet to use AI in customer service has helped reduce call times, allowing representatives to engage in more sales opportunities.

Most importantly, Verizon is recognized for its strong cash flow generation, achieving $19.8 billion in free cash flow last year, a figure that comfortably exceeds the $11.2 billion allocated for dividends.