The S&P 500 is coming off a strong year with a 25% year-to-date return. If the market takes a downturn in 2025, investors can attempt to lower their portfolio volatility by reviewing a stock’s standard deviation, a common proxy for risk.

Generally, the higher the standard deviation, the more volatile a stock price could be relative to its past performance. Conversely, stocks with low standard deviation could decline less in a market downturn.

The following 3 low-volatility stocks can reduce portfolio volatility due to their low standard deviation, along with their dividend payouts.

Procter & Gamble (PG)

Procter & Gamble is a consumer products giant that sells its products in more than 180 countries and generates roughly $82 billion in annual sales.

Its core brands include Gillette, Tide, Charmin, Crest, Pampers, Febreze, Head & Shoulders, Bounty, Oral-B, and many more.

P&G has slimmed down to just 65 brands, from 170 previously. This transformation has weighed on the top line, but it should allow Procter & Gamble to focus on its strongest, most profitable brands moving forward. Indeed, the company has returned to solid growth mode in the last six years.

In mid-October, Procter & Gamble reported (10/18/24) financial results for the first quarter of fiscal 2025. Its sales dipped -1% while its organic sales grew 2% over last year’s quarter thanks to 1% price hikes and 1% volume growth. Core earnings-per-share grew 5%, from $1.83 to $1.93, beating the analysts’ consensus by $0.03.

Management reaffirmed its guidance for 3%-5% growth of organic sales and 5%-7% growth of earnings-per-share in fiscal 2025.

Procter & Gamble’s dividend payout ratio has oscillated between 50% and 75% in the last decade, with the current mark at 58%. This is well within a reasonable range for such a high-quality firm. We believe that the company can keep growing its dividend at a rate roughly in line with earnings-per-share growth going forward.

Verizon Communications (VZ)

Verizon is one of the largest wireless carriers in the country.

Wireless contributes three-quarters of all revenues, and broadband and cable services account for about a quarter of sales. The company’s network covers ~300 million people and 98% of the U.S.

On October 22nd, 2024, Verizon reported third quarter results for the period ending September 30th, 2024. For the quarter, revenue declined 0.1% to $33.3 billion, which missed estimates by $120 million.

Adjusted earnings-per-share of $1.19 compared unfavorably to $1.22 in the prior year, but this was $0.01 more than anticipated.

For the quarter, Verizon had postpaid phone net additions of 239K, which was much better than loss of 51K that the company had in the same quarter a year ago. Retail postpaid net additions totaled 349K.

Wireless retail postpaid phone churn rate remains low at 0.89%. Wireless revenue grew 2.7% to $19.8 billion while the Consumer segment increased 0.4% to $25.4 billion.

VZ yields over 6% and has increased its dividend for 20 consecutive years.

Consolidated Edison (ED)

Consolidated Edison is a holding company that delivers electricity, natural gas, and steam to its customers in New York City and Westchester County. The company has annual revenues of more than $14 billion.

On November 7th, 2024, Consolidated Edison reported third quarter results for the period ending September 30th, 2024. For the quarter, revenue improved 5.7% to $4.1 billion, which topped estimates by $26 million.

Adjusted earnings of $583 million, or $1.68 per share, compared to adjusted earnings of $561 million, or $1.62 per share, in the previous year. Adjusted earnings-per-share were $0.10 more than anticipated.

As with prior periods, higher rate bases for gas and electric customers were the primary contributors to results in the CECONY business, which accounts for the vast majority of the company’s assets. Average rate base balances are still expected to grow by 6.4% annually through 2028.

Thanks to rate hikes and population growth, the company has been able to raise its dividend for 50 years. Consolidated Edison initiated its biggest investment program in its history last year. It has completed its installation smart meters in its network.

This will help customers optimize energy use while the company will be able to realize lower peak demand and thus reduce its operating cost. The company also expects capital investment of ~$4.8 billion for 2024, and ~$23 billion for 2025 through 2028.

One key competitive advantage for Consolidated Edison is that consumers do not curtail their electricity consumption even during the roughest economic periods, so the stock is resilient during recessions.

Disclosure: No positions in any stocks mentioned

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Bob Ciura has worked at Sure Dividend since October 2016. He oversees all content for Sure Dividend and its partner sites. Bob received a Bachelor’s degree in Finance from DePaul University, and an MBA with a concentration in Investments from the University of Notre Dame.