Investors have witnessed significant stock market volatility over the past four years, with the S&P 500 swinging from bull to bear markets. While the current trend suggests an upward trajectory, seasoned investors recognize the ever-looming possibility of the next correction.
Warren Buffett, anticipating market shifts, has been strategically selling stocks, amassing a substantial $157 billion war chest. As the Oracle of Omaha prepares for the next bear market, investors are wise to follow suit.
One effective strategy to weather market uncertainties is investing in dividend stocks. These companies, known for sharing their success with investors, demonstrate resilience through various market conditions. Historical data shows that dividend-payers on the S&P 500 have generated positive returns in every decade since 1930, a testament to their stability.
Amid the potential bear market, three income stocks stand out:
1. Altria (NYSE:MO):
- Dividend Yield: 9%
- Altria, a tobacco giant, remains profitable despite the secular decline in smoking. With a reliable income stream and strategic moves like the acquisition of NJOY, Altria is poised to make a lasting impact in the smoke-free future.
2. Walgreens Boots Alliance (NASDAQ:WBA):
- Dividend Yield: 9.3%
- Despite challenges, Walgreens remains a top-performing business. The company’s dividend, yielding 9.3%, positions it as one of the highest-yielding Dividend Aristocrats. With a focus on healthcare and strategic acquisitions, Walgreens is a dividend stock to consider before a potential bear market.
3. International Business Machines (NYSE:IBM):
- Dividend Yield: 4.1%
- IBM, once considered a slow-growth tech company, has evolved into a nimble player in various tech facets. With a robust presence in cloud computing, AI, IoT, and more, IBM’s diversified portfolio offers both growth opportunities and downside protection. Its 4.1% dividend yield adds an extra layer of stability in uncertain market conditions.
As the market remains unpredictable, incorporating these dividend stars into your portfolio can provide a solid foundation and potential gains even in the face of a bear market.
