Though the markets have been actively digesting the latest news, Wall Street overall has struck a cautious tone. Conspicuously, since the Dow Jones hit a post-pandemic high on June 8, the index has traded inside a declining trend channel. With trouble at every corner, it’s no surprise that pessimism is creeping in.

For one thing, daily infections of the novel coronavirus recently hit a record high in the U.S., prompting concerns about another big wave. As a result, several states have paused or reversed their reopening measures. Not surprisingly, many investors are on the sidelines. Further, it’s not inconceivable that they may remain gun shy, given that they probably feel they barely escaped in the nick of time.

It goes without saying that investors need to be selective with their funds. And that was a relevant sentiment prior to this crisis. Fortunately, with dividend stocks, investors have more margin of error due to their generally stable nature.

Of course, the economic shakeup brought on by Covid-19 has had some nervous about the possibility of dividends getting slashed as companies focus on maintaining liquidity to ride out current macrotrends.

“Research shows that dividend cuts are associated with significant share price declines on announcement,” Cornell University Professor of Finance and Harold Bierman Jr. Distinguished Professor of Management Andrew Karolyi told InvestorPlace in an email. “Since dividends provide important signals about future earnings prospects (cuts imply uncertainty), they are often delayed, and are interpreted as a last resort action.”

Dean Karolyi went on to say that those sectors that are likely to see dividend cuts are those that have high yields and relatively high fractions of dividend-payers, compounded with “uncertainty about future earnings during the COVID crisis.”

In fact, those dividend stocks that are set to do well, and those that seem liable to trim their yields, fall neatly into the sectors respectively winning and losing on the back of the coronavirus lockdowns. Per Karolyi:

“Those S&P 500 sectors with the highest dividend yields and highest fraction of dividend payers include utilities, telecommunication services, consumer staples and energy, in that order. But these are defensive sectors and are not facing a spike in uncertainty because people are not shutting off their power, turning off their internet, or stopping their food purchases. Those sectors with less predictable earnings right now, which still have dividend yields, include material goods, industrials and consumer discretionary.”

Investors who have been watching the markets over the past few months probably won’t find that information surprising, but it’s important to remember when choosing which dividend stocks to buy.

After all, although picking high-flying growth companies is a spicier endeavor, they aren’t always the smartest picks. With passive-income yielding firms, you get the potential to make capital gains and obtain residual payouts to bolster your position. During a down period, dividends can also help you ride out the storm.

But don’t mistake benefiting from these yields as “boring” strategies. As with any asset class, you can dial up the risk for the chance of greater rewards. No one knows your investment style better than you!

The following ideas are broken down into three sections: stable, mid-level and high-yield (speculative). Each section has something to offer, depending on how much risk you’re willing to take.

• Johnson & Johnson (NYSE:JNJ)
• Procter & Gamble (NYSE:PG)
• Walmart (NYSE:WMT)
• Sempra Energy (NYSE:SRE)
• HNI (NYSE:HNI)
• Coca-Cola (NYSE:KO)
• Coty (NYSE:COTY)
• Kimco (NYSE:KIM)
• Altria Group (NYSE:MO)

Best Dividend Stocks: Johnson & Johnson (JNJ)

Current Dividend Yield: 2.91%

If you love stable dividend stocks, Johnson & Johnson is one of the best dividend stocks to buy. It is the powerhouse brand of powerhouse brands. Better yet, JNJ is levered toward the ultimate in non-cyclical industries: healthcare. Selling consumer-level products, pharmaceuticals, and medical devices, JNJ offers a robust secular business.

Of course, the company’s brand has taken a hit due to various controversies. However, the novel coronavirus has given JNJ stock renewed relevance. While pharmaceutical companies like Gilead Sciences (NASDAQ:GILD) have been finetuning their treatment solutions, Covid-19-related hospitalizations have increased in many states.

As well, the vaccination race is far from finished and may require a longer period than many anticipate. For now, your best bet for mild symptoms is over-the-counter medication, something that Johnson & Johnson specializes in. For now, your best bet for mild symptoms is over-the-counter medication, something that Johnson & Johnson specializes in.

Presumably, that may be the case for any future infectious diseases. Therefore, don’t assume that JNJ stock is just for this current pandemic.

Procter & Gamble (PG)

Current Dividend Yield: 2.69%

Given that the present economic fallout was caused by a health crisis (as opposed to a fundamental shock to the system), companies like Clorox (NYSE:CLX) have naturally exploded higher this year. Nowadays, everybody is cleaning and disinfecting whatever they touch. But we can’t forget taking care of our bodies, which is where Procter & Gamble comes in.

In any circumstance, some exposure to PG stock makes sense. No matter what kind of economy we face, we all need to brush our teeth, take daily showers and wash our clothes – and if you don’t, you should! But with this pandemic, Procter & Gamble’s importance as one of the best dividend stocks has taken on greater urgency.

Also, don’t forget that the coronavirus has a direct positive effect on PG stock. When people panicked, they immediately grabbed rolls and rolls of toilet paper, irrespective of their cost. If we suffer a second wave — and that scenario seems to grow likelier by the day — that could see a nice lift for PG.

Best Dividend Stocks: Walmart (WMT)

Current Dividend Yield: 1.81%

Personally, I’ve never found Walmart that appealing. Every time I visit, I encounter an ambiance that resembles a pawn shop. But to many folks, whether shoppers or investors, Walmart is the king of big-box retailers. During this pandemic, I’m not going to argue that point. WMT stock deserves its place among the best dividend stocks to buy.

Apparently, not many Americans prepare for worst-case scenarios. When the coronavirus first breached the U.S., people immediately flooded their local Walmart stores. Not that I condone this, but the early birds were able to hoard massive amounts of toilet paper and emergency supplies, while stocking up on their groceries.

Further, Walmart can continue to organically market their alternative service options, such as deliveries or curbside pickup. Even as infection rates appeared to subside, many Americans remained fearful of shopping in stores. Now, with hot spots sprouting in certain parts of the country, more customers may take advantage of these options.

I’ll be remiss not to mention that WMT stock faced some risks due to the initial outburst of violence a few weeks ago. However, the protests now have been much more laser-focused on the issues rather than an excuse for some bad actors to cause trouble.

Also, UBS recently upgraded WMT to buy from neutral, suggesting that investors are more confident in Walmart’s long-term stability.

Sempra Energy (SRE)

Current Dividend Yield: 3.54%

When you’re in a downturn, one of your best bets for dividend stocks is utility firms. Basically, when people flip the switch, they expect the lights to turn on. Bad things happen when they don’t.

If you’re a real numbers person, you’ll want to pay attention to Duke Energy (NYSE:DUK). Based on a quantitative model that our own Louis Navellier developed, DUK is one of the best dividend stocks to buy.

Mixing in commonly used metrics (i.e. earnings momentum) as well as propriety methods, DUK appears primed for a stellar new year.

But if you’re on the adventurous side, you may want to check out Sempra Energy. Compared to Duke Energy, which is mostly concentrated in the southeastern regions of the U.S., Sempra focuses on southern California, with businesses in Nevada, Texas, Louisiana, and many parts of Latin America.

Geographically, SRE stock has a critical advantage. Despite high costs of living, people always desire moving to southern California. Plus, the Golden State’s coastline represents prime economic firepower. Basically, this area will never go out of style.

Put another way, you always want to go where the money is. For today and the foreseeable future, that’s “SoCal,” making SRE stock an astute idea.

Best Dividend Stocks: HNI (HNI)

Current Dividend Yield: 3.94%

As one of the leading companies in the office furniture space, it wasn’t too shocking that HNI tumbled at the onset of the Covid-19 pandemic. With no one in the office, there wasn’t much demand for furniture. To be fair, the corporate office paradigm is still adjusting to the new normal, presenting risks to HNI stock.

However, if you can look past the challenges, this may be one of the more underappreciated dividend stocks. As people embrace the concept of remote work, demand for aesthetically professional home offices will likely increase. Given the company’s multiple recognized brands, this may add a revenue stream to compensate for the disruption among big corporate offices.

Also, HNI stock is levered to the residential side with the underlying company’s fireplace products. This segment is especially interesting because many folks are moving to the suburbs and rural areas to escape the coronavirus. A second wave would only make this business more highly demanded.

Coca-Cola (KO)

Current Dividend Yield: 3.7%

At first glance, Coca-Cola doesn’t seem the most intuitive choice for dividend stocks to buy, especially during a time like this. We all know that drinking soda isn’t the best thing for your health. And in a health crisis, you don’t want to compromise yourself. Yet KO stock has proven resilient over past recessions and it may do well in the current downturn.

One of the key factors driving this robust sentiment is that Coca-Cola’s namesake products represent a respite. It’s a tantalizing treat for the senses, helping people cope with the present crisis. No, I’m not recommending that you drink your troubles away with soda. However, it’s a far cheaper alternative than many guilty pleasures.

Further, because Coca-Cola flagship products are mostly caffeinated, it’s a less expensive alternative to buying high-priced coffee. When you’re trying to save money, such an option can go a long way.

Best Dividend Stocks: Coty (COTY)

Current Dividend Yield: 10.55%

If you want reasonably reliable dividend stocks with high yields, investors should consider telecommunications firms like Verizon (NYSE:VZ) or AT&T (NYSE:T). As kings of their trade – and an indispensable one at that – you can usually sleep comfortably with these names in your portfolio. However, if you’re willing to lose some sleep for both high yields and big capital gains, look no further than Coty.

A beauty and cosmetics specialist, COTY stock has not enjoyed the new normal to say the least. At the beginning of this year, shares were trading in double-digit territory. Now, they’re firmly priced at single digits. Nevertheless, Coty may have scored a huge victory. Just recently, the company announced that it bought a 20% stake in Kim Kardashian West’s cosmetics company KKW Beauty.

Scoff as you might, management may be onto something. Kim Kardashian – and her entire family – have incredible influence. It’s what the kids want. Thus, COTY stock could ride coattails to tremendous profits. Just be careful on your exposure.

Kimco Realty Corp (KIM)

Current Dividend Yield: 8.58%

I will tell you straight up that anything involving brick-and-mortar retail is a risky game. Earlier this year, I cautioned my readers about investing in retail REITs. With overall declining foot-traffic, the physical retail space doesn’t have the appeal it once did. And with shelter-in-place orders, the risk factor is amplified to a frankly unknown degree.

Beyond this crisis, the most important factor is eCommerce. Why sit in traffic and wait in lines when you can shop conveniently at Amazon (NASDAQ:AMZN)?

The flip side to this argument is that there are some retail sectors that Amazon has trouble ousting. For instance, most people find it more convenient to size their clothing at a physical apparel shop than guessing online.

In addition, some store brands offer better pricing or a better experience than Amazon. Think Walmart, Costco (NASDAQ:COST) and Best Buy (NYSE:BBY).

However, a retail REIT that focuses on strong brands just might have a chance post-coronavirus, hence Kimco. KIM features multiple properties running highly demanded store brands. Moreover, a good chunk of their properties is located in lucrative markets.

Will it be enough to overcome the risk to the entire sector? Additionally, will the nationwide looting and general lawlessness continue? I’m not so sure, which helps explain Kimco’s more than 8% dividend yield. But if you’re a believer, KIM stock gives you a solid opportunity.

Best Dividend Stocks: Altria Group (MO)

Current Dividend Yield: 8.39%

If you’re looking for high-yield dividend stocks but with at least a somewhat realistic chance of upside, you may want to consider Altria. Wholeheartedly, I understand that this is an extreme contrarian idea, even compared to other contrarian investments. As a result, MO stock is not for everybody. But if you can stomach the risk, please hear out this compelling idea.

First, the vice industry has a tendency of performing well during periods of economic pressure. During the last global recession that started more than a decade ago, evidence suggests that former smokers relapsed into their old habits. Logically, during an economic or health crisis, stress goes up, causing an increase in smoking rates. When you have both factors present, I would imagine that this is cynically a net positive for MO stock.

Second, U.S.-China relations have worsened considerably since the coronavirus outbreak. That opens the door to further trade sanctions. It’s particularly significant for Altria stock because most vaporizer products, which compete with traditional cigarettes, are – surprise, surprise! – made in China.

Like I said, it’s a risky proposition. But it’s also logical enough that I’m going to take a modest bite.

As of this writing, Josh Enomoto is long AT&T and Altria.