Recently, there has been significant news regarding the rapid drop in both the Nasdaq Composite (^IXIC 0.52%) and the S&P 500 index (^GSPC 0.08%), both of which have entered correction territory. Whether this marks the beginning of a bear market remains uncertain, but it is certainly a concern for investors.
Stock prices fluctuate as part of the investment landscape. For those seeking to avoid anxiety during these times, it may be wise to focus on earning consistent dividends from companies such as Realty Income (O -1.19%) and Toronto-Dominion Bank (TD -0.57%).
Realty Income’s Commitment to Steady Dividends
Realty Income has earned the nickname “The Monthly Dividend Company,” reflecting both the regularity of its dividends and its dedication to them. The real estate investment trust (REIT) emphasizes its mission to provide shareholders with reliable monthly dividends that increase over time, having raised its dividend annually for 30 consecutive years.
Backing Realty Income’s dividends is a portfolio that includes over 15,600 single-tenant net lease properties. Net leases stipulate that tenants are responsible for the majority of property-related operating expenses.
Approximately 75% of Realty Income’s rental income is generated from the retail sector, which features relatively standard properties that are simple to buy, sell, and lease. The remaining income is sourced from industrial properties and a few specialized assets such as casinos and vineyards. Additionally, the REIT diversifies its holdings across both North America and Europe.
Long-Term Opportunities with Toronto-Dominion Bank
Toronto-Dominion Bank, commonly referred to as TD Bank, stands as one of Canada’s leading banks. The banking sector in Canada is heavily regulated, resulting in dominant positions for the largest banks. This regulation fosters a cautious approach throughout these institutions. Importantly, TD Bank has a history of paying dividends every year since 1857.
Though TD Bank is regarded as a relatively low-risk investment, it has recently faced challenges that now present opportunities for dividend investors who prioritize long-term gains. Specifically, the U.S. division has encountered trouble with regulators due to issues related to money laundering, resulting in significant fines and a cap on asset growth within that division. It may take several years for TD to rebuild trust with regulators and lift this growth limitation.
While the market has reacted negatively to these developments, elevating the dividend yield to a historically high level of around 5%, the dividend itself remains secure, having been increased by 3% at the beginning of 2025. This modest increment highlights management’s commitment to providing consistent returns to investors. For those willing to hold while TD Bank addresses its challenges, this could be a prudent strategy amidst overall market fluctuations.
Choosing Stability Amid Market Volatility
Investing in Realty Income and TD Bank offers an easier path during times of market volatility, allowing you to concentrate on receiving steady dividend payouts instead of trying to time market entries and exits. Thanks to their high yields and robust dividend histories, both investments provide solid returns for those who are willing to ride out market ups and downs. Whether your investment amounts to $2,000 or $2 million, incorporating income-generating stocks like Realty Income and TD Bank appears to be a wise choice in current market conditions.
Reuben Gregg Brewer has positions in Realty Income and Toronto-Dominion Bank. The Motley Fool has positions in and recommends Realty Income. The Motley Fool has a disclosure policy.
