7 Low-Volatility Dividend Stocks for Peace of Mind

Dividend stocks are a well-worn prescription for what ails an investor’s upset stomach.

Dividend stocks are a well-worn prescription for what ails an investor’s upset stomach. Are a cascade of troubling headlines and fears of Wall Street volatility making you nauseous? A regular stream of cash distributions can help smooth out your returns and restore your sanity.

But investors also are increasingly targeting a more direct solution to volatility: low-volatility funds. These products are designed to piece together a basket of stocks whose movements aren’t as exaggerated as the rest of the market, and they’re gaining in popularity. The iShares Edge MSCI Min Vol USA ETF (USMV (opens in new tab)), for instance, had enjoyed nearly $6 billion in net inflows through 2019’s midway point. Invesco S&P 500 Low Volatility ETF (SPLV (opens in new tab)), which is roughly a third of the size of USMV, had brought in $2 billion.

Fortunately, dividends and low volatility aren’t an either/or proposition. You can get both, and DIVCON can help us discover these more stable dividend stocks.

The DIVCON system from exchange-traded fund provider Reality Shares examines the payout health of all dividend stocks among Wall Street’s 1,200 largest companies. It does that by poring into metrics including profit growth, free cash flow (how much cash companies have left over after they meet all their obligations) and even the Altman Z-score, which helps assess a company’s likelihood of a bond default or bankruptcy. The resulting rating system (a 1-5 scale in which DIVCON 5 indicates the healthiest of payouts and DIVCON 1 indicates dividends at the most risk) provides a measure of a dividend’s sustainability and chance of future growth.

Here are seven dividend stocks for a little peace of mind. All seven stocks not only boast strong DIVCON 4 ratings, but have exhibited lower volatility and total-return outperformance (that’s price plus dividends) versus the S&P 500 over the past year.

Price, market value and yield data is as of Sept. 16. DIVCON scores and measurement data such as earnings growth, levered free cash flow (LFCF)-to-dividend ratio and Altman Z-score are as of Sept. 1. Stocks listed in order of DIVCON score. Dividend yields are calculated by annualizing the most recent payout and dividing by the share price. You can view other scores at Reality Shares’ DIVCON site.

Kyle Woodley

Kyle Woodley is the Editor-in-Chief of Young and The Invested (opens in new tab), a site dedicated to improving the personal finances and financial literacy of parents and children. He also writes the weekly The Weekend Tea (opens in new tab) newsletter, which covers both news and analysis about spending, saving, investing, the economy and more.


Kyle was previously the Senior Investing Editor for Kiplinger.com, and the Managing Editor for InvestorPlace.com before that. His work has appeared in several outlets, including Yahoo! Finance, MSN Money, Barchart, The Globe & Mail and the Nasdaq. He also has appeared as a guest on Fox Business Network and Money Radio, among other shows and podcasts, and he has been quoted in several outlets, including MarketWatch, Vice and Univision. He is a proud graduate of The Ohio State University, where he earned a BA in journalism. 


You can check out his thoughts on the markets (and more) at @KyleWoodley (opens in new tab).