The big news of late has been the quick decline suffered by the Nasdaq Composite (^IXIC +1.33%) and the S&P 500 index (^GSPC +1.08%), both of which fell into correction territory. It remains to be seen if this is the first stop on the way to a bear market, however that outcome is certainly what investors are worrying about.
But stocks go up and stocks go down -- it is just part of investing. If you want to sidestep the worry, focus on collecting reliable dividends from companies like Realty Income (O +0.90%) and Toronto-Dominion Bank (TD +1.21%) instead.
Realty Income's goal is reliable dividends
Realty Income has trademarked the nickname "The Monthly Dividend Company," which speaks to the frequency of its dividend and to its commitment. In fact, the real estate investment trust (REIT) specifically states that it has "a mission to deliver stockholders dependable monthly dividends that grow over time." So far the dividend has been increased annually for 30 consecutive years.
Image source: Getty Images.
Realty Income's dividend is backed by a portfolio of more than 15,600 single-tenant net lease properties. Net leases require that the tenant pay for most property-level operating costs.
Roughly 75% of the company's rents come from the retail sector, where properties are rather generic and fairly easy to buy, sell, and release. The rest of the rent is derived from industrial assets and a few more unique properties, like casinos and vineyards. Adding to the REIT's diversification is the fact that it owns properties in both North America and Europe.
But having a lot of levers to pull when it comes to growth isn't all that's attractive here. Realty Income is also financially strong, with an investment grade rated balance sheet. And, given its large size (its market cap is $50 billion or so), it tends to have advantaged access to capital markets relative to smaller peers when it comes to raising capital. Every year won't be a good one, but historically Realty Income has proven to be a solid income stock. And it comes with a hefty 5.6% dividend yield at this writing.
NYSE: O
Key Data Points
Toronto-Dominion Bank's misstep is a long-term opportunity
Toronto-Dominion, usually just called TD Bank, is one of the largest banks in Canada. The Canadian bank sector is highly regulated and the largest banks basically have entrenched industry positions. Moreover, the strict regulation has led to a conservative ethos that pervades all aspects of the leading Canadian banks. Notably, TD Bank has paid a dividend every single year since 1857.
From a business perspective, TD Bank is a fairly low-risk financial stock. But it isn't perfect, and a recent business misstep has opened up an opportunity for dividend investors who think in decades and not days.
Specifically, the company's U.S. division has gotten in hot water with U.S. regulators because it was used for money laundering. That's bad and it resulted in a large fine, an overhaul of the company's money laundering controls, and an asset cap placed on the U.S. division. The first two aren't terrible, the last one is a problem.
NYSE: TD
Key Data Points
Basically, TD Bank's U.S. business was expected to be the company's growth engine. A regulatory asset cap specifically stops this business from growing. And it may take until 2028, or longer, for TD Bank to regain regulator trust and get the cap removed. Investors have reacted to this multiyear headwind by selling the stock. That has pushed the dividend yield up to a historically high 5% or so. The dividend, however, doesn't appear to be at any risk; it was increased 3% at the start of 2025.
It was a token dividend hike, but one that speaks to management's commitment to return value to investors over time via a growing income stream. And if you don't mind sitting back and collecting large dividend checks while TD Bank works through the company-specific headwinds it faces, this could be a comfortable way to sidestep the volatility of the broader market.
Take the easy way out of market volatility
Instead of thinking about whether or not you should get in, or out, of the market, buying Realty Income and TD Bank let you take the much easier path of focusing on collecting reliable dividend checks.
Indeed, with high yields and strong dividend histories, these two investments reward you well for sticking around through thick and thin. If you have $2,000 or $2 million, the market's current volatility will probably make owning income stocks like Realty Income and TD Bank sound like a smart move.
