The stock market is currently riding a wave of optimism, with major indexes soaring to near all-time highs. Investors are buoyed by recent actions from the Federal Reserve, which has cut interest rates and hinted at more reductions in the future. However, experts point out that significant challenges may lie ahead that could disrupt this seemingly endless upswing.
As in many narrative arcs, the stock market’s prolonged prosperity may be setting the stage for a downturn. The valuation of stocks is at a historically high level, and the Federal Reserve has expressed concern, noting that “uncertainty about the economic outlook remains elevated.” Predictions of a market correction, potentially by early 2026, are becoming increasingly plausible.
While market fluctuations often induce anxiety, they can also present unique investment opportunities. Financial analysts have identified three resilient dividend stocks that could be worthwhile additions to a portfolio, especially in the event of a market sell-off.
AbbVie (ABBV) stands out as a formidable option. Initially, its price-to-earnings ratio may seem exorbitantly high at 103, but this figure reflects past performance rather than future potential. Current forecasts suggest a more attractive forward earnings multiple of around 15, coupled with a remarkably low price-to-earnings-to-growth (PEG) ratio of 0.39. AbbVie’s strengths lie in its strong sales projections for its autoimmune drugs, Skyrizi and Rinvoq, as well as migraine therapies Qulipta and Ubrelvy. The company’s extensive pipeline boasts approximately 50 programs in mid- and late-stage clinical development, positioning it favorably in the pharmaceutical landscape. Given the essential nature of its products, AbbVie’s share price is likely to remain stable during market downturns, further enhanced by its status as a Dividend King, which has consistently raised its dividend for over 50 years.
Enterprise Products Partners (EPD) is another strong contender. This midstream energy company has shown exceptional resilience through various economic downturns, including the financial crisis and the impact of COVID-19. Operating over 50,000 miles of pipeline, Enterprise offers critical infrastructure for transporting crude oil and natural gas, a model that is not heavily affected by recessions. Approximately 90% of its long-term contracts contain inflation-adjustment clauses, shielding it from inflationary pressures. Additionally, the rise of data centers for artificial intelligence applications is expected to be a significant growth driver, given their substantial energy requirements. With a distribution yield of 6.8% and a 27-year streak of increasing distributions, Enterprise is a favorite among dividend enthusiasts.
Pfizer (PFE) rounds out the list, offering a compelling dividend yield of 7.15%. Although the company has struggled with stock performance and is facing a patent expiration dilemma for several key products, many believe the risks are already reflected in its current stock price. Trading at just 7.7 times forward earnings, Pfizer is viewed as a potentially undervalued stock, especially given its PEG ratio of 0.96, which suggests a strong valuation. Moreover, the pharmaceutical giant has promising products in its pipeline, including treatments for eczema, migraines, and cancer. This, combined with its robust development pipeline of 108 candidates—28 of which are in late-stage testing—positions Pfizer well to mitigate losses expected from upcoming patent expirations.
While the stock market appears buoyant, caution is warranted as potential corrections loom. Investors may find sanctuary in these three established dividend stocks, which not only provide good yields but also have strong fundamentals to weather any impending storm.
