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3 Dividend Stocks to Buy If You're Worried About the Stock Market

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It’s easy for investors to identify reasons to be fearful. Stock market valuations are frothy. Interest rates are likely to rise. The delta variant is causing COVID-19 cases to increase. We could add plenty of other items to the list.

© Provided by The Motley Fool 3 Dividend Stocks to Buy If You’re Worried About the Stock Market

There’s an old saying that “stocks climb a wall of worry.” In other words, stocks can continue to perform quite well even during periods when investors are anxious and uncertain. Knowing this often happens doesn’t make it easier to invest, though.

However, there are some stocks that should be less scary even for jittery investors. Here are three dividend stocks to buy if you’re worried about the stock market.

© Getty Images Worried person sitting in front of a laptop.

Duke Energy

Utility stocks offer a significant amount of stability. Although they might fall during an overall stock market pullback, they tend to hold up better than most stocks. Duke Energy (NYSE: DUK) ranks as one of the best utility stocks to consider.

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Duke Energy provides electricity to 7.9 million customers in six states. It also provides natural gas to 1.6 million customers in five states.

There isn’t much risk that the demand for electricity will evaporate. Duke is also transitioning away from fossil fuels to renewable energy sources. It hopes to reduce its carbon emissions by at least 50% by 2030 and achieve net-zero carbon emissions by 2050.

Duke won’t deliver jaw-dropping growth. However, the company projects that its earnings per share will rise between 5% and 7% annually through 2025. 

Duke’s dividend is also rock solid. It currently yields 3.7%. The company has increased its dividend for 15 consecutive years.

Easterly Government Properties

It’s hard to come up with a steadier dividend stock than a utility like Duke Energy. However, Easterly Government Properties (NYSE: DEA) could give Duke a run for its money.

Easterly is a real estate investment trust (REIT) that focuses on buying and leasing properties to federal government agencies. The company currently owns 83 properties, all but two of which are leased to U.S. government agencies. Easterly’s leases are backed by the full faith and credit of the U.S. government.

You might be pleasantly surprised at Easterly’s growth prospects. CEO William Trimble said in the company’s Q2 conference call that the acquisition pipeline combined with lease renewals for its existing properties “set the stage for delivering strong risk-adjusted returns to our shareholders.” 

Easterly’s dividend is especially juicy with a yield of 4.9%. And as a REIT, the company must return at least 90% of its taxable income to shareholders as dividends.

Viatris

It’s probably an exaggeration to say that Viatris (NASDAQ: VTRS) stock is so cheap right now it can’t go any lower. However, it’s not much of an exaggeration. Shares of the generic-drug maker trade at less than four times expected earnings. Viatris is priced well below its book value. 

It’s no wonder that Wall Street analysts love this stock. The consensus price target for Viatris reflects a premium of over 30%. One analyst thinks that shares could more than double over the next 12 months.

Viatris probably won’t be a growth engine anytime soon. However, its pipeline could provide new biosimilars that could fuel a boost in revenue within the next few years.

The company initiated its first dividend earlier this year with a yield of around 3%. Look for dividend increases from Viatris in the future.

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Keith Speights owns shares of Viatris Inc. The Motley Fool recommends Duke Energy, Easterly Government Properties, and Viatris Inc. The Motley Fool has a disclosure policy.

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