After UnitedHealth Group(NYSE: UNH) delivered a surprisingly weak first-quarter report last Thursday, its stock price crashed more than 22% on Friday -- the insurer's worst single-session drop since August 1998. Prior to that sell-off, UnitedHealth was the largest component in the price-weighted Dow Jones Industrial Average(DJINDICES: ^DJI). Now, the baton has been passed to Goldman Sachs.
Numerous top Dow holdings have sold off considerably this year, pushing the index into correction territory -- defined as a decline of at least 10% from a recent high. In fact, the Dow, S&P 500, and Nasdaq Composite are all currently in correction territory.
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Despite UnitedHealth's dramatic sell-off, there are arguably better Dow dividend stocks to buy now. In particular, Visa(NYSE: V), Chevron(NYSE: CVX), and Procter & Gamble(NYSE: PG) are worth a closer look.
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Visa's competitive advantages shine no matter the economic backdrop
Payment processor Visa collects fees every time credit or debit cards issued through its network are swiped, tapped, or digitally utilized. Like Mastercard, Visa partners with financial institutions that bear the credit risk in exchange for generating interest income on borrowers' outstanding balances.
Visa's scale is truly unmatched in its space, and it has grown steadily over the years. The higher its transaction volume and frequency, the more fees it collects.
Visa has very low operating expenses. In fact, its operating margin is 66.2% and its profit margin is a staggering 54.3% -- it's converting over half of its revenue into pure profit.
One advantage of Visa's business model compared to other financial services companies is that it can still generate substantial profits even during an economic slowdown or recession. Growth may slow to a halt, but it can still generate sufficient funds to cover its dividend, repurchase stock, and reinvest in the business. Visa's payout at the current share price only yields 0.7% because the company spends significantly more on stock buybacks than dividends. Those appear to have been a better use of capital over time, given the stock's strong performance. If it were to devote its entire capital return program to dividends alone, Visa's payout would yield over 3%.
American Express has arguably more upside potential, but Visa is an ultra-safe Dow stock that investors can be confident buying even if the stock market's broad downturn persists.
Chevron combines dividend reliability with a high yield
Chevron's dividend yield of 5% at the current share price makes it the second-highest yielding Dow component, behind only Verizon Communications. The integrated oil and natural gas major has a track record of 38 consecutive years of payout increases, despite industrywide downturns and economic slowdowns along the way.
Chevron and the broader energy sector have been selling off in 2025 due to falling oil and natural gas prices, which are down due to concerns about President Donald Trump's trade war, which has forecasters expecting weaker demand growth for oil amid macroeconomic headwinds, even as the OPEC+ group moves ahead with production hikes.
Given these risks, investors may wonder why Chevron is a worthwhile investment at this time. The investment thesis can be boiled down to three factors.
The first is that its dividend offers a sizable incentive to buy and hold the stock over the long term. Second, Chevron has an impeccable balance sheet with low long-term debt and leverage, providing it with a cushion in the event of a prolonged downturn. Finally, Chevron has made improvements to its operating structure over the years by reducing production costs and investing in high-margin plays such as the Permian Basin. Chevron delivered the first oil from its expansion project in Kazakhstan earlier this year and is expanding operations offshore the Gulf of Mexico. Chevron has a geographically diverse production portfolio, as well as a sizable refining business and a growing low-carbon business.
The stock is down by 16% over the last month, and that sell-off is certainly a buying opportunity for income investors.
A safe stock for risk-averse investors
Procter & Gamble and the consumer staples sector have thus far withstood the broader stock market sell-off well. During times of economic uncertainty, investors tend to flock to consumer staples companies for their steady results and reliable dividends. Consumers are less likely to cut their spending on products like toothpaste and dish soap than they are on discretionary goods and services, making companies like P&G safe bets regardless of the economy's state.
P&G has considerable international exposure due to its complex supply chain and distribution network, which make it somewhat vulnerable to tariffs, trade wars, and foreign currency fluctuations. However, the company has historically been able to pass along its higher costs to consumers via price hikes thanks to its size and product mix, which give it operating leverage compared to competitors.
P&G will report its fiscal 2025 third-quarter earnings on Thursday. Investors should be on the lookout for management commentary on tariffs and China. In fiscal Q2, P&G improved its results in Greater China, but it wouldn't be surprising if its business in the region has taken a step back due to the intensified trade war.
With 69 consecutive years of dividend increases and a 2.5% yield, P&G is the ultimate safe stock for investors to consider now. However, its valuation is somewhat expensive at 27.2 times earnings, so investors should only buy it if they are willing to pay a premium price.
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American Express is an advertising partner of Motley Fool Money. Daniel Foelber has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chevron, Goldman Sachs Group, Mastercard, and Visa. The Motley Fool recommends UnitedHealth Group and Verizon Communications. The Motley Fool has a disclosure policy.
