Getting Defensive: 3 Dividend Payers Reporting Strong Q3 Earnings

If you’re a parent, you’ve likely battled with your children over different options at dinner time. What kid wouldn’t love to eat hot dogs for dinner every night and then wash it down with a milkshake? But as a parent, you know that adding fruit and vegetables to their diets will create stronger bones and sharper minds.

Financial advisors face a similar problem during bull markets.

Every investor wants exposure to the hottest AI or semiconductor stocks when markets are going straight up, and few want to hear about creating a strong foundation with dividend-paying stocks. And just like that frustrated parent, advisors are well aware that overdoing it on the treats can lead to future repercussions.

With tech stocks teetering, it may be time to revisit the dividend portion of your portfolio. Herea are three previously downtrodden dividend payers that reported quality Q3 earnings.

Dividend Stocks Can Provide Stability Amidst Market Turbulence

Markets are still within a hair of all-time highs, but cracks are beginning to show in the aging bull market. Volatility has returned with a bang, and large swings in major indices are becoming increasingly more common.

In addition, risky stocks in profit-light industries like quantum computing and nuclear energy have been getting hammered as investors exit their speculative holdings. Even a Magnificent Seven member, Meta Platforms Inc. (NASDAQ: META), is staring at a nearly 20% drawdown since the beginning of August.

When the winners begin to wobble, markets often brace for corrections.

Correction odds increase as participation broadens, and those investors sitting on significant unrealized gains must grapple with elevated downside risk. Dividend stocks aren’t immune to volatility, but they can offer a bit of insurance against excessive downside risk. Dividend payers are forced to maintain financial discipline because a portion of their revenue must be returned to shareholders. Cash flow is crucial, and companies that pay dividends must build balance sheets that can survive harsh economic environments.

Dividend stocks span a spectrum of industries but tend to cluster in defensive sectors such as finance, consumer staples, healthcare, and industrials. As cap-weighted industries become increasingly concentrated in tech, dividend stocks offer a natural diversification across both sectors and scopes. Dividend payers are often established firms with predictable revenues, which may not be a recipe for stock outperformance, but is a path for consistent income and peace of mind. If concerns over a correction are keeping you up at night, you might want to consider a more defensive portfolio posture. 

3 Dividend Stocks With Optimistic Earnings Reports

The following three dividend payers operate in different industries, but they share a few common traits. They may not be the highest-yielding stocks—and their shares have underperformed the S&P 500 so far in 2025—but these companies each maintain a sustainable dividend. In addition, their Q3 earnings reports highlight potential upside in the stocks.

Travelers Companies: Record Profits Boosting Returns and Dividend Payouts

The Travelers Companies Inc. (NYSE: TRV) has the best-performing stock on our list year-to-date (YTD), but it still lags the S&P 500 by a significant margin.

However, its Q3 earnings report, released premarket on Oct. 16, shows a company that’s thriving despite the uncertain environment.

Earnings per share (EPS) and revenue both came in well above analyst expectations, and net income was up 50% year-over-year (YOY).

One of the biggest drivers was a sharp reduction in catastrophe losses, down to $402 million from $939 million in Q3 2024.

The current yield is 1.59%, supported by a 17.3% payout ratio and 21 years of consecutive annual dividend increases.

The chart also indicates a strong technical uptrend, but the stock is hitting resistance at the 50-day simple moving average (SMA). If the Relative Strength Index (RSI) continues to trend upward, the price can break through this resistance level and enter the next stage of the trend.

Elevance Health: Strong Dividend With Diverse Business Model

Everyone needs health insurance, which is why insurance plan providers like Elevance Health Inc. (NYSE: ELV) are popular dividend plays.

Elevance reported Q3 earnings on Oct. 21 and beat both the top and bottom-line estimates, highlighted by 12% YOY operating revenue growth.

Margins are under pressure, though, and the company is seeking to remedy this by exiting certain Medicaid Advantage plans.

The dividend yield is a healthy 2.16%, accompanied by a 28% payout ratio and 14 consecutive years of dividend increases.

However, the stock chart suggests that the earnings upside might not be holding much sway with investors.

The price was rejected at the 200-day SMA for the second time this year, and is now approaching Oversold levels on the RSI. The dividend payout is steady, but the stock's direction remains uncertain.

Church and Dwight: Surprising Growth for a Consumer Staples Firm

Church & Dwight Inc. (NYSE: CHD) is the consumer staples giant behind popular brands like Arm & Hammer, OxiClean, and TheraBreath.

Consumer staples are typically dividend payers because demand for their products is inelastic and sales are often easily forecast.

In addition to a sturdy dividend, Church & Dwight has undertaken several initiatives to drive sales growth.

During its Q3 earnings release (another top and bottom-line beat), the company reported organic sales growth of over 3% YOY and raised its full-year cash flow guidance.

Executives also highlighted the acquisition of hand sanitizer maker Touchland as an unexpected positive, with double-digit growth.

CHD’s yield is minimal at 1.36%, but the dividend payout rate is just 37% and the company has raised annual payouts for 29 straight years. However, the next obstacle for the stock is the 50-day SMA, which has been acting as stiff resistance since June.

The RSI shows slight upward momentum beginning to churn following the upbeat earnings news, but the stock will need to overcome the 50-day SMA to reverse its 2025 downtrend.

Where Should You Invest $1,000 Right Now?

Before you make your next trade, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

The article "Getting Defensive: 3 Dividend Payers Reporting Strong Q3 Earnings" first appeared on MarketBeat.