The stock market has been doing well, and it might seem like that may go on for some time. The S&P 500 gained 16.4% in 2025, and it's off to a good start this year, up 1.1% through Jan. 8.
The market's volatility has been low by historical standards, with the CBOE Volatility Index (VIX, also known as the Fear Index) at 15.7 as of Jan. 8. By comparison, it was more than 60 in early April after the administration announced its initial tariff policy.
But stocks can't go up forever, and higher volatility will return at some point. Dividend-paying companies typically provide stability. The key is to select strong companies with a commitment and ability to sustain payments in various economic climates.
These two companies, both Dividend Kings (increased payouts for more than 50 straight years), fit the bill.
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1. Procter & Gamble
Procter & Gamble (PG 1.15%) sells a range of consumer staples, which are products that people need and use in their everyday lives. Its products include shampoos, conditioners, deodorants, razors, detergents, and diapers.
Procter & Gamble sells these items under well-known brands, such as Head & Shoulders, Old Spice, Gillette, Tide, and Pampers. These brands command a high market share.
Despite consumers facing a tough economic climate, Procter & Gamble managed to grow sales. Its fiscal first-quarter (ended Sept. 30) sales grew 2%. Price and mix each contributed 1 percentage point, while volume was flat. Its sales figures have been adjusted to eliminate foreign-currency translation effects and the impact of acquisitions and divestitures.
NYSE: PG
Key Data Points
Management took a cautious approach to guidance, expecting flat to 4% sales growth for the year. Its sales growth may not look great, but when economic conditions improve, Procter & Gamble's top-line growth should increase.
After all, it has popular products and a stable business. It's no wonder the company has paid a dividend for 135 years and raised the payouts for the last 69 straight years. These payments look sustainable, too. Procter & Gamble has a payout ratio of 60%, indicating the company produces plenty of profit to support dividends.
Procter & Gamble's shares have a 3% dividend yield. That's nearly triple the S&P 500 index's 1.1%.
2. Johnson & Johnson
It's hard to imagine, but Johnson & Johnson (JNJ +0.35%) has become purely a healthcare company following its spinoff of the consumer products division. That business became the publicly traded company Kenvue (KVUE 0.14%).
While Johnson & Johnson has planned other steps, such as spinning off its orthopedics business, the company's core business remains finding innovative drugs and medical technology. Its drugs and treatments focus on areas such as immunology (e.g., rheumatoid arthritis), infectious diseases, neuroscience (e.g., schizophrenia), oncology, cardiovascular, and metabolism (e.g., diabetes).
Naturally, its business doesn't depend on the economic cycle. After all, people need their important treatments. In some cases, it's a matter of life or death.
Johnson & Johnson's third-quarter adjusted sales grew 4.4% year over year. Its diluted earnings per share jumped 15.7%.
NYSE: JNJ
Key Data Points
Its business generates plenty of free cash flow (FCF) to support dividends. During the first nine months of 2025, Johnson & Johnson had FCF of $14.3 billion. That's plenty to pay dividends of $9.3 billion.
While the business has changed, prioritizing dividends remains a focus. Last April, the board of directors increased the quarterly payout by 4.8% to $1.30 a share. That ran the company's streak to 63 consecutive years with a raise.
Johnson & Johnson's stock has a 2.5% dividend yield, more than double that of the S&P 500.
