One of the best ways to protect your portfolio from downside is with dividend stocks.
After all, companies with strong cash flows and attractive yields tend to outperform even the worst of markets. According to The Wall Street Journal:
“Dividend stocks have become the new darling on Wall Street, and investors looking for income are pouring billions of dollars into them. These securities are considered a good buffer during times of market volatility. They also are seen as an inflation hedge, considering that S&P 500 dividend growth has outpaced inflation since 2000.”
Plus, dividend stocks allow investors to profit in two ways: one, through potential appreciation of the stock price, and two, through dividend distributions. Better, many dividend paying companies also have a good amount of cash and hand, and are typically strong companies with good prospects for long-term growth.
Look at Altria (MO), for example.
With a current yield of 8.5%, the company’s CEO Billy Gifford and chief financial officer, Sal Mancuso have said the MO dividend is a top priority for the company.
Even better, the company believes U.S. revenue from smoke-free products could double. As noted by Barron’s, “It believes this new array of products can help the company reach two of its enterprise goals for 2028. The goals include growing total U.S. smoke-free volumes by at least 35% and approximately doubling its total U.S. smoke-free net revenue to $5 billion in the same period, ‘with $2 billion coming from innovative smoke-free products.’”
Helping even more, the company announced a new $1 billion buyback program to be completed by the end of this year. That’s after completing its $3.5 billion buyback program.
Technically, after finding double bottom support around $44.31, we’d like to see the MO stock race back to $47 resistance near term.