Don't Panic — Buy These Dividend Stocks Instead | The Motley Fool

The geopolitical conflict in the Middle East has pushed oil prices higher. High oil prices have investors worried about a global recession. If you are worried about the future, you might want to focus on reliable dividend stocks like Chevron (CVX 1.39%), Procter & Gamble (PG +0.12%)and NextEra Energy (NEE 0.95%). Here’s why.

High oil prices could tip the world into a recession

Elevated oil prices are an immediate headwind to economic growth. They will also have a lingering effect, as energy prices work their way through the global supply chain. Investors are justified in their recession fears.

The oil patch, meanwhile, is likely to be one of the most volatile areas of the market. If you want exposure to energy, a good way to manage the uncertainty is to focus on a financially strong, globally diversified energy giant like Chevron. It has proven it can survive the entire energy cycle, as evidenced by its decades’ worth of annual dividend increases. And it offers a well-above-market 3.8% dividend yield right now.

Outside of the oil patch

If you actually want to avoid direct oil exposure, a good option is global consumer staples giant Procter & Gamble. This Dividend King, with over 50 consecutive annual dividend increases, produces products such as deodorant and toilet paper that consumers use every day. Consumers aren’t going to stop buying P&G’s products during a recession. The yield is 2.8%, which is near its highest levels in five years.

Today’s Change

(-1.39%) $-2.68

Current Price

$190.63

Key Data Points

Market Cap

$386B

Day’s Range

$189.75 – $194.09

52wk Range

$133.77 – $214.71

Volume

10M

Avg Vol

12M

Gross Margin

14.66%

Dividend Yield

3.57%

Another interesting option could be NextEra Energy, a utility set to benefit from increasing electricity demand. The giant utility has increased its dividend for decades, and it offers an attractive 2.6% yield. Notably, it operates one of the largest U.S. regulated utilities and owns one of the world’s largest solar and wind companies. In other words, it offers both a solid utility foundation and a growth-oriented clean energy business in one package.

Don’t lose sleep, invest differently

Wall Street is always volatile, though some market environments are more concerning than others. If high oil prices have you worried today, you can adjust by switching to a reliable dividend-paying energy giant like Chevron. If you want to avoid oil altogether, a reliable consumer staples Dividend King like P&G could be a good choice. And if you want to hit energy from a different direction, a growth-oriented utility like NextEra Energy could work. The key is to figure out which stocks will help you avoid the panic that can come with the heightened market uncertainty we see today.