Market Volatility Boosts Appeal of Dividend Stocks

Amid stock market volatility, safer investments like high-quality dividend stocks are becoming essential. Enterprise Products Partners and NNN REIT stand out with solid dividend growth, helping investors secure reliable returns in uncertain times.

Date: 12-04-2025

AI Rating: 7

The report highlights the volatility in the stock market, primarily driven by concerns over tariffs and potential recession. In such uncertain times, the emphasis is on safe investments, notably high-quality dividend stocks. The two companies cited—Enterprise Products Partners and NNN REIT—each demonstrate the ability to deliver consistent and reliable dividend growth.

Enterprise Products Partners (NYSE: EPD) operates as a significant player in the energy midstream segment. The company boasts a stable cash flow via long-term contracts and has maintained a commendable distribution yield of nearly 7.5%. The ability to cover its distribution 1.7 times with generated cash flow indicates a robust profit margin and reinforces investor confidence, making it an appealing option during market instability.

NNN REIT (NYSE: NNN), focusing on single-tenant retail properties, can be regarded similarly. The REIT operates under long-term triple net leases which afford it reliable rental income. With a high dividend yield of over 6% and sufficient excess free cash flow exceeding $200 million annually, NNN REIT displays a solid free cash flow performance. Its history of consistent dividend increases (35 years) strengthens its position in the market.

Both companies demonstrate characteristics that professional investors look for during downturns, such as durable business models and conservative financial management. These features are particularly pertinent if the economy does slide into recession, offering a degree of reliability for dividend-seeking investors.

Overall, this analysis suggests a focused approach on dividend stocks like EPD and NNN REIT could yield stable returns versus the current volatility affecting broader market indices. It is a tactical move for professional investors to hedge against risks while ensuring continued cash flow through dividends.

Stocks: EPD NNN