Navigating the market’s wild swings may be nerve-wracking, but certain dividend stocks can help smooth the ride, according to investor Jenny Harrington. Stocks rebounded on Tuesday after three sessions of steep declines. The market rout began after President Donald Trump announced his sweeping tariff policy last week. On Monday, the S & P 500 briefly entered bear market territory, but was up 3.8% on Tuesday. Harrington, CEO of Gilman Hill Asset Management, focuses on creating income that is not only attractive but keeps flowing even during difficult times. That can stop investors from selling when the market tumbles, she said. “The emotional comfort that this portfolio brings by reminding clients, ‘Don’t worry, your income’s there. Don’t worry your income is safe,’ is a huge risk mitigating factor, because it mitigates the biggest risk of all — which is bad behavior at the wrong time” said Harrington, who is the author of the new book, ” Dividend Investing: Dependable Income to Navigate All Market Environments .” Her strategy was shaped in part by her experiences growing up. Her father was a serial entrepreneur, so the family saw “very high highs and very low lows,” she said. The family declared bankruptcy when Harrington was a teenager and things were rough until she left college and got a job at Goldman Sachs. “The financial swings were nauseating and severely anxiety inducing,” Harrington recalled. “Somehow through all these weird twists and turns, I gravitated towards an investment strategy where even when there was financial volatility in the background … there’s completely steady income throughout,” she said. Harrington’s approach is to create an indelible 5% or better income stream for clients. When searching for stocks, she wants those that have a dividend yield over 3.5% and a market capitalization of over $150 million. She then looks at the sector and industry, as well as historical earnings and dividend growth rates. To make sure the dividend is covered by earnings, she also pays attention to the earnings and dividend per share. Price-to-earning multiple, both current and forward, and leverage ratios are also useful. “Every company is fundamentally and individually researched with the eye towards — can we go through an environment like we’re in right now and the income remains uninterrupted?” Harrington said. To help gauge that ability, she looks at whether they were able to maintain their dividend during the global financial crisis and the Covid-19 pandemic. These days she sees opportunities in names that have the majority of their revenues come from the United States. This way, they have better tariff insensitivity than the broader market, she said. Here are her top picks. ConAgra has a 5.4% dividend yield and is undervalued, trading at 11 times earnings, Harrington said. After this year, earnings are expected to grow in the low single-digit range, she noted. The consumer packaged goods company, whose products include frozen food brands like Birds Eye, Marie Callender’s and Healthy Choice, has about 91% of its revenues coming from the U.S., she pointed out. Most production is domestic, although it sources some ingredients outside the country, she said. “They have, on average, a bit healthier product line than most of their peers,” Harrington said. “If the GLP-1s continue at the pace they’re at, and if [Health and Human Services Secretary Robert F. Kennedy Jr.] does make America healthy again, they should be relatively insulated.” Shares are down about 7% year to date. Harrington finally got the opportunity to buy Ryman Hospitality Properties on Friday after it sank in the market rout. The real estate investment trust has a 5.7% dividend yield and is trading at 9.6 times forward funds from operations, she said. The FFO metric is used by REITs to measure cash flow generated from their operations. Ryman Hospitality Properties has 100% of its revenue in the U.S. While it is lumped in with hotel REITs, their dynamics are completely different, said Harrington, who was waiting for an entry point into the stock for months. The company has big non-gaming conference centers that get booked by large companies for annual meetings two to five years in advance, she said. It also has a big cancellation fee if things really went south with the economy. “The rest of the hotel REITs are highly leveraged, and they do have a problem if there is a recession,” she said. “This one’s just really [the] baby thrown out with the bath water.” The stock has lost 20% so far this year. Another name Harrington likes is Bristol Myers Squibb , which yields 4.5%. The biopharmaceutical company is trading at 8.5 times earnings, she said. Some 71% of its sales come from within the U.S. In this case, it is difficult to assess the tariff situation , Harrington said. Pharmaceutical companies were exempt from the reciprocal levies announced last week, but may ultimately see sector-specific duties. BMY YTD mountain Bristol Myers Squibb Bristol Myers Squibb has a lot of drugs coming off patent and earnings look “terrible,” she noted. However, there is an opportunity for the company to put its “significant” free cash flow generation to work. “They have enough cash and they can buy their way back to growth. They can just buy smaller biotech, they can buy other drugs, and use that cash constructively,” she said. “This is truly a yield play with balloon potential at the end.” Shares have slipped 2% year to date. Meanwhile, Kinder Morgan may be considered “kind of rich” — trading at 19 times earnings — but it has about 11% earnings growth ahead, Harrington said. The stock has a dividend yield of 4.5%. In addition, all of the midstream energy company’s business is domestic. Kinder Morgan has an interest in or operates about 79,000 miles of pipelines that transport natural gas, crude oil and more. It also has 139 terminals that store and handle fuels and other products. “The biggest risk they have from tariffs is if the cost of steel for their pipes went up,” Harrington said. “But most of the midstream energy companies really haven’t been doing much development and rather just using the assets they have to transport fuel.” The stock is down 4% so far this year. Lastly, investors can get a juicy 6.4% yield with Verizon . The stock is trading at nine times earnings, with low-single-digit earnings growth ahead, Harrington said. All of its revenues come from the U.S., she noted. Any potential tariff risk could come from a jump in iPhone costs, she said. “We don’t know yet who is going to bear the brunt of an increase in iPhones, but there is no diminishment in the usage of cell service or in the use of Verizon service,” Harrington said. Shares have gained nearly 8% year to date. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
