By Ian Salisbury
With the world feeling so uncertain, stocks that deliver solid dividends and growth without getting caught up in the market's violent ups and downs look pretty appealing.
So far the S&P 500 is more or less flat in 2026, delivering a return of 0.6%. But that hides the fact that the index surged to an all-time high in late January, before plunging close to correction territory in the weeks following President Trump's attack in Iran.
While the market's volatility has been gut-wrenching, scaling back your stock exposure could be a big mistake. Wall Street analysts are forecasting profit growth of more than 17% for 2026, suggesting the market could rally sharply, if it can just find its footing.
For dividend-focused investors the moment calls for stocks with solid dividends and profit growth that have managed to keep pace with the market this year but won't subject shareholders to large price swings. To find names that fit the bill, we screened for S&P 500 stocks with a well-covered dividend of at least 3% and estimated 2026 earnings growth of at least 7%. Together, those factors could help deliver a total return of around 10%.
We also looked for stocks that had at least kept pace with the stock market's 0.6% year-to-date return and that boast a beta of less than 1. Beta is a key measure of volatility. For example, a stock with a beta of 0.9 would be expected to decline about 9% when the S&P 500 falls 10%.
It's a long list of requirements, and only eight names fit the bill. Most of these were energy and utility companies, including Kinder Morgan, Phillips 66, Public Service Enterprise Group, Consolidated Edison, and Evergy.
Energy stocks have rallied sharply since the start of the war in Iran. But owning them isn't necessarily going to shield your portfolio from that volatility -- they're likely to fall as quickly as oil prices do. That's less true for utility stocks, which are highly regulated, but these can also be subject to energy price swings.
That leaves the three other names, which may be worth a closer inspection from investors: AT&T, Darden Restaurants, and Philip Morris International.
The long-term bear case against Philip Morris International, which sells Marlboro cigarettes and other tobacco products to markets outside the U.S., is obvious. Cigarettes are dangerous and smokers in developing countries are gradually abandoning the habit.
But Philip Morris International has worked hard to rebrand itself as a company that can usher in a smoke-free future. Whatever you think of smoke-free tobacco's health claims, the strategy has helped the company return to growth. Over the past three years sales of smoke-free products nearly doubled to $16.6 billion from $9.9 billion.
Those gains are trickling down to the company's bottom line. Wall Street expects earnings to grow 12% in 2026 and 9% in 2027, according to FactSet. Shares trade at around 19 times forward earnings, which is more or less in line with other consumer staples companies. The stock also boasts a 3.6% yield.
Analysts forecast profits at Darden, which runs the Capital Grille and Olive Garden restaurant chains, to grow 11% in 2026 and 7% in 2027. Shares trade at 17 times 2026 earnings and the stock yields 3.1%. Restaurants have faced headwinds, such as rising beef prices and weak consumer sentiment. But Darden's scale and comparatively upscale clientele should give it a leg up.
As for AT&T, it's a classic defensive stock -- even gloomy consumers need their cellphones. Analysts forecast profit growth of 8% to 11% over the next two years. The shares trade at 11 times forward earnings and the stock boasts a 4.3% dividend yield.
Write to Ian Salisbury at ian.salisbury@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 14, 2026 16:48 ET (20:48 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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