Let’s not sugarcoat it: volatility is the price of admission in the stock market. And lately, that ticket’s been pricier than usual. Between inflation jitters, interest rate whiplash, and economic data that can’t decide if we’re heading toward recession or another soft landing rerun, investors are understandably hesitant. The knee-jerk reaction? Sit on cash. Wait it out. Be “prudent.”
But here’s the problem with prudence in its purest form—it often disguises itself as paralysis.
I get it. Cash feels safe. It doesn’t scream, it doesn’t plunge 5% in a day, and it doesn’t tank your portfolio overnight. But let’s be clear: cash is not a wealth-building strategy. It’s a holding pattern. And in today’s environment, where some of the best dividend-paying companies are trading at fire-sale prices, sitting in cash is the equivalent of watching filet mignon being marked down and deciding you’d rather nibble on rice cakes.
That’s why I’m putting cash to work—strategically, deliberately, and with two dividend-paying juggernauts that are not just attractively priced but are also built to endure. These aren’t speculative fliers or meme stocks hoping to “moon.” These are real businesses with real cash flow, fortress balance sheets, and a management team that actually knows how to operate outside of a tech bubble.
Let’s dive in.
Why Timing Matters—Even When You’re "Long-Term"
Let’s tackle a common misconception: “You can’t time the market.” Sure, you can’t perfectly predict the bottom or top of any given stock. But guess what? That doesn’t mean you should ignore valuation altogether. That’s like refusing to haggle at a car dealership because you don’t know the exact moment the market for sedans will peak.
What you can do is recognize when great companies are trading at a discount to their intrinsic value—and pounce. That’s not timing. That’s value investing. And the real money in dividend investing isn’t made by collecting 3% to 5% yields on overbought blue chips. It’s made by locking in high starting yields on temporarily unloved stocks that are poised for a bounce.
So, what am I buying now?
Two companies that check all the right boxes:
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A history of paying and growing dividends
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Strong fundamentals with stable cash flow
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Undervalued compared to historical norms and industry peers
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Sectors with long-term relevance, even if short-term sentiment is shaky
Let’s get to the headliners.
Dividend Pick #1: 3M (Ticker: MMM)
Dividend Yield: ~6.4%
Forward P/E: ~11
Price Target: Deep Value With a Legal Discount Tag
Look, I know what you're thinking. “3M? The lawsuit magnet with the forever chemicals?”
Yes. And that’s exactly why I’m buying.
Let’s unpack the bearish case first, because it’s always good to know what you’re getting into. 3M is facing billions in potential legal settlements over defective earplugs and PFAS (forever chemicals). These are real headwinds. No denial here. But here’s the thing: markets have a nasty habit of overpricing bad news—especially when it’s front-page material.
What the headlines don’t mention?
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3M has already set aside billions to address these liabilities and is working toward global settlements.
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The company is spinning off its healthcare division (the most stable and profitable segment), which could unlock significant shareholder value.
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Despite the noise, 3M continues to generate strong free cash flow, which easily supports its dividend.
And let’s talk about that dividend. This isn’t just a random payout—it’s a Dividend King with over 60 years of consecutive dividend increases. Do you know how rare that is? That’s the kind of consistency you expect from a Swiss watch, not an industrial conglomerate.
Why Now?
3M is trading at levels not seen since the early 2010s. It’s not just cheap—it’s historically cheap. A forward P/E near 11 is basically a flashing neon sign that says “bargain bin.”
And here’s the kicker: once the legal dust settles, the market will re-rate this company. That doesn’t mean it shoots back to $200 overnight, but a move from ~$90 to ~$130 in the next few years, plus a juicy 6% yield, is more than enough to make me allocate.
Is it sexy? No. Is it reliable, contrarian, and financially sound? Absolutely.
Dividend Pick #2: Verizon Communications (Ticker: VZ)
Dividend Yield: ~6.7%
Forward P/E: ~8
Price Target: Cash Cow in Telecom’s Doghouse
Verizon is a classic case of “hated but necessary.”
The stock has been under pressure for what feels like an eternity. Concerns about wireless competition, capital expenditures for 5G, and a sluggish stock price have kept sentiment in the gutter.
So why on earth would I want to own it?
Because everyone else is focused on the noise, and they’re missing the core signal: Verizon is a free cash flow machine.
While AT&T still struggles to untangle itself from its disastrous content adventures, and T-Mobile plays the “growth at any cost” card, Verizon is just grinding it out—year after year. It delivers stable revenue, manages its debt responsibly, and continues to support one of the most generous dividends in the S&P 500.
The 5G Payoff Is Coming
Let’s not forget that Verizon has spent years investing in its 5G infrastructure. Yes, it was expensive. But the heaviest capex phase is largely behind us. What’s next? Operating leverage. As the network matures and consumer adoption rises, Verizon’s margins will expand.
Add to that:
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High barriers to entry (spectrum licenses, infrastructure)
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Sticky customer relationships
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A dividend payout ratio that remains reasonable despite the high yield
And you have a recipe for steady total returns—even if the stock just stays flat.
But if sentiment shifts (say, on a few quarters of positive growth), Verizon could easily rerate back toward a P/E of 11 or 12. That’s 30-40% upside baked in—and again, that doesn’t include the almost 7% income stream you’re getting just for waiting.
The Psychology of Buying When Others Won’t
Let’s zoom out for a second. Why are these stocks so cheap?
Because they’re boring.
Because they don’t benefit from AI hype or crypto bubbles or IPO mania.
Because they’re the stocks your dad liked—and maybe your granddad too.
But you know what? Dad and Granddad didn’t lose sleep over every market wobble. They weren’t chasing meme stocks and YOLOing options. They were clipping coupons—metaphorically and sometimes literally—and living off reliable income from companies that made actual products, not just promises.
Investing in 3M and Verizon right now isn’t just smart. It’s a declaration of independence from the hype cycle. It’s betting on fundamentals in a market drunk on narratives.
It’s adulting.
What About the Risks?
No investment is without risk. Here’s what to keep in mind:
3M Risks:
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Legal liabilities are still developing. The company might have underestimated final settlement costs.
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The industrial sector could lag if global manufacturing slows significantly.
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Spinoff execution (the healthcare division) could hit roadblocks.
Verizon Risks:
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Continued pricing wars in wireless could pressure margins.
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Fiber and 5G may not yield returns as quickly as bulls expect.
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Debt load, while manageable, still needs careful oversight.
But guess what? Risk is the price of return. The goal isn’t to eliminate risk. It’s to take intelligent risks where the odds are tilted in your favor. Both of these stocks offer asymmetric reward potential—because the worst-case scenario is largely priced in.
Putting It Together: The Dividend Math
Let’s do a back-of-the-napkin calculation.
Assume you put $10,000 into each stock.
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3M @ 6.4% yield: $640/year in dividends
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Verizon @ 6.7% yield: $670/year in dividends
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Total: $1,310/year on $20,000 invested
That’s a 6.55% blended yield.
Now assume no capital gains—just reinvested dividends compounding annually at the same yield.
In 10 years, you’d have:
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~$28,000 from that original $20,000
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An income stream now paying $1,834/year
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All without the stock price moving an inch
Now factor in modest capital appreciation (say, 4% annually), and your total return jumps north of 100%.
Final Thoughts: Ignore the Noise, Embrace the Math
While others are waiting for “clarity,” I’m buying into value.
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3M is beaten down due to headline risk, but remains a cash-generating empire.
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Verizon is the Rodney Dangerfield of telecom—it gets no respect, yet pays one of the highest dividends in the game.
Both are undervalued. Both offer outsized yields. Both are solid enough to anchor any retirement portfolio—and cheap enough to juice your total return.
So yes, I’m putting cash to work. Not recklessly. Not blindly. But deliberately—into two rock-solid dividend payers that are on sale.
Because in a market where everyone wants the next big thing, sometimes the smartest move is to go with the tried-and-true, especially when it’s cheaper than it should be.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Do your own research and consult with a financial advisor before making any investment decisions.