Baby Boomers Can Pick Through the Sell-Off Rubble and Grab Our 4 Favorite Safe Dividend Stocks

While getting to retirement age can be a blessing, counting on the U.S. government to provide for your needs is not the best idea. The full retirement age is 66 if you were born from 1943 to 1954. The full retirement age increases gradually if you were born from 1955 to 1960 until it reaches 67. For anyone born in 1960 or later, full retirement benefits are payable at age 67.

The past week has likely been a chilling reminder for baby boomers that having too much of their assets in risky investments when a big sell-off comes into play can prove to be deadly. The sheer velocity of the selling saw the major indexes move from bull to bear market status in just a few weeks

Why do we cover dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciation has contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations. A study from Hartford Funds, in collaboration with Ned Davis Research, found that dividend stocks delivered an annualized return of 9.18% over the half-century period from 1973 to 2023. Over the same timeline, this was more than double the annualized return for non-payers (3.95%).

Time to take advantage of the massive sell-off

The violent selling of the past few weeks has been exacerbated by hedge funds taking massive short positions and betting heavily against a stock market that has gained over 100% on a total return basis since 2021. The average return for the S&P 500 through that period would have been closer to 10% per year or 40%, which has been the standard for the venerable index since its launch in 1957.

For baby boomers and retirees who have followed our suggestions since the start of the year and raised some cash, now may be a good time to put some of that money to work. We say that with a hint of caution, as we are in uncharted waters and the selling and tariff/recession concerns could return at any time. One thing is sure: don’t look for the Federal Reserve to bail out the economy soon with rate cuts, as inflation remains an issue. Here are four of our favorite dividend stocks buried during the recent downturn, all rated Buy on Wall Street.

Altria

This is one of the world’s largest producers and marketers of cigarettes and other tobacco-related products. Altria Group Inc. (NYSE: MO) stock offers value investors a great entry point. The company manufactures and sells smokable and oral tobacco products in the United States.

It provides cigarettes primarily under the Marlboro brand, as well as:

• Cigars and pipe tobacco, principally under the Black & Mild and Middleton brands
• Moist smokeless tobacco and snus products under the Copenhagen, Skoal, Red Seal, and Husky brands
• on! Oral nicotine pouches
• e-vapor products under the NJOY ACE brand

Altria sells its tobacco products primarily to wholesalers, including distributors and large retail organizations, such as chain stores.

Altria used to own over 10% of Anheuser-Busch InBev, the world’s largest brewer. Last year, the company sold 35 million of its 197 million shares through a global secondary offering. That represents 18% of its holdings but still leaves 8% of the outstanding shares in its back pocket. Altria also announced a $2.4 billion stock repurchase plan partially funded by the sale.

Recently, Altria increased its quarterly dividend by 4.1%, from $0.98 to $1.02 per share, marking its 59th dividend increase in the past 55 years.

Bank of America Securities has a Buy rating with a $61 target price objective.

Dominion Energy

Dominion Energy Inc. (NYSE: D) is an American energy company headquartered in Richmond, Virginia. Many of the Wall Street firms we cover remain optimistic about utilities despite the sharp move higher over the past year. Dominion Energy operates through four segments:

• Dominion Energy Virginia
• Gas Distribution
• Dominion Energy South Carolina
• Contracted Assets

The Dominion Energy Virginia segment generates, transmits, and distributes regulated electricity to residential, commercial, industrial, and governmental customers in Virginia and North Carolina.

The Gas Distribution segment engages in

• Regulated natural gas gathering
• Transportation
• Distribution and sales activities
• Distributes nonregulated renewable natural gas

This segment serves residential, commercial, and industrial customers.

The Dominion Energy South Carolina segment generates, transmits, and distributes electricity and natural gas to residential, commercial, and industrial customers in South Carolina.

The company’s portfolio of assets included approximately:

• 30.2 gigawatts of electric generating capacity
• 10,500 miles of electric transmission lines
• 85,600 miles of electric distribution lines
• 94,200 miles of gas distribution lines

Dominion serves approximately 7 million customers

Barclays has an Overweight rating with a $54 target.

Enterprise Products Partners

This American midstream natural gas and crude oil pipeline company is headquartered in Houston, Texas. Enterprise Products Partners L.P. (NYSE: EPD) is one of the largest publicly traded energy partnerships and pays a stellar 6.95% dividend. It provides various midstream energy services, including:

• Gathering
• Processing
• Transporting and storing natural gas, natural gas liquids (NGL) fractionation
• Import and export terminalling
• Offshore production platform services

The company has four reportable business segments:

• Natural Gas Pipelines and Services
• NGL Pipelines and Services
• Petrochemical Services
• Crude Oil Pipelines and Services

One reason many analysts like the stock might be its distribution coverage ratio. The company’s coverage ratio is well above 1x, making it relatively less risky in the MLP sector.

JPMorgan has a Buy rating with a $38 target price.

Verizon

Commonly known as Verizon, this American multinational telecommunications conglomerate provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. This top stock offers tremendous value, trading at 8.8 times estimated 2026 earnings. Plus, Verizon Communications Inc. (NYSE: VZ) shareholders receive a dependable dividend.

Verizon operates in two segments:

• Verizon Consumer Group
• Verizon Business Group

The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements.

It also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:

• Smartphones
• Tablets
• Smartwatches and other wireless-enabled connected devices

The segment also offers wireline services in the Mid-Atlantic (including the District of Columbia) and northeastern United States through its fiber-optic network, Verizon Fios product portfolio, and copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice

Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally.

The Goldman Sachs price target for the Buy-rated stock is set at $52.

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