U.S. stocks are facing some daunting headwinds right now. Every U.S. stock index has seen a major spike in volatility since the start of the year, thanks to the unfavorable mix of geopolitical tensions, sky-high inflation, rising bond yields, and tighter monetary policies by the Federal Reserve. 

What's the best way to counteract this surge in market volatility? While it might be tempting to stick to the sidelines during this turbulent period, history has shown that high-quality dividend stocks are a great way to mitigate wild price fluctuations in the market.

The passive income provided by dividend stocks can drastically improve a portfolio's overall performance amid high levels of volatility. Moreover, dividend reinvestment plans can further smooth out the rough patches by taking advantage of potential discounts on stock purchases via dollar-cost averaging

Which dividend stocks are the most appealing buys right now? The big pharma stocks AstraZeneca (AZN 0.62%) and Pfizer (PFE 1.47%) are both outstanding buys at current levels. Here's why. 

A piggybank with bandaids on it.

Image source: Getty Images.

AstraZeneca: An underappreciated wealth escalator

At 15 times forward earnings, AstraZeneca stock is the cheapest it has been in over two years. Even so, the pharma giant's shares have essentially traded sideways this year -- despite this bargain-basement valuation, an exceedingly strong outlook for the balance of the current decade, and a top-notch dividend program. Astra's recent weakness is a testament to the overwhelmingly negative sentiment toward equities right now. But this marketwide pessimism shouldn't stop savvy investors from taking advantage of all this pharma giant has to offer.

On the income side of the ledger, Astra recently boosted its annualized dividend by $0.10 to $2.90 per share. Equally important, the U.K. pharma giant should have no problem funding its dividend program in the years ahead. After all, Wall Street expects Astra's top line to rise at a compound annual growth rate of 11.4% over the next 24 months. Astra's top line, in fact, is forecast to grow at one of the fastest clips within its entire big pharma peer group over this two-year period. 

The company's annual sales are surging at the moment due to a host of newly approved growth products, the strong performance of its core established products, along with its recent acquisition of the rare disease specialist Alexion. Topping it off, Astra also sports one of the deepest clinical pipelines in the industry, a fact which bodes well for the company's long-term growth prospects.  

All told, this dividend-paying pharma stock ought to deliver healthy returns for investors in 2022 and beyond.  

Pfizer: A table-pounding buying opportunity 

After a record-breaking 2021, Pfizer's shares have gotten off to an extremely poor start this year. The pharmaceutical behemoth's stock has lost over 15% of its value since the start of the new year.

Pfizer's shares have come under enormous pressure in recent weeks due to concerns about the commercial longevity of its COVID-19 franchise. Despite the company calling for another record year in terms of annual revenue in 2022, Wall Street seems convinced that the sales of Pfizer's juggernaut COVID-19 vaccine, Comirnaty, and its oral antiviral pill, Paxlovid, will come in well below expectations this year. 

The fact of the matter, however, is that Pfizer's initial revenue forecast for 2022 is almost certainly going to turn out to be a lowball figure once everything is said and done. After all, the company didn't include potential revenue from any future coronavirus contracts in this year's first revenue guidance. 

Pfizer, in turn, will likely blow away earnings estimates as the year unfolds. 

Want another compelling reason to buy this blue chip pharma stock? Pfizer's shares have never been this cheap from a forward-looking price-to-earnings ratio perspective:

PFE PE Ratio (Forward) Chart

PFE PE Ratio (Forward) data by YCharts

The market, in effect, has gotten carried away with the doom and gloom toward this elite drugmaker.

Lastly, Pfizer's stock also yields a handsome 3.15% on an annualized basis at these depressed levels. So, if you're looking for a wildly undervalued dividend stock, Pfizer should arguably be at the top of your list.