With stock indexes like the S&P 500 down just a few percentage points year to date, it is far too soon to be talking about a possible stock market crash. But if macro and/or geopolitical concerns worsen as 2026 unfolds, consider it a fine time to consider some more defensive plays to add to your portfolio.
Many of the best defensive stocks, or stocks that provide consistent returns irrespective of economic cycle, are high-quality dividend stocks, including blue chip dividend stocks with long track records of dividend growth.
In more simple terms, dividend stocks soften the blow during a market downturn, effectively paying you to wait for a recovery. Right now, the following three dividend stocks stand out as strong choices to buy and hold ahead of a downturn: Energy Transfer (ET +1.25%), Digital Realty Trust (DLR 0.76%), and Verizon Communications (VZ +0.82%).

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Energy Transfer offers a strong mix of yield and growth
Energy Transfer owns a broad portfolio of midstream energy assets, including pipelines and storage facilities. Midstream is generally a more stable segment of the energy sector, with revenue and earnings less subject to the wild swings seen in upstream oil and gas exploration and downstream oil and gas refining.

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As a master limited partnership (MLP), a tax-efficient pass-through entity, Energy Transfer must pay out at least 90% of its pretax income in distributions. Thanks to these high distributions, Energy Transfer has a very high forward yield, around 6.9%. Better yet, with management targeting annual distribution growth of 4% to 6%, shares could deliver double-digit returns over time.
Digital Realty Trust: An AI stock for a downbeat market
When you think of real estate investment trust, or REIT, entities owning portfolios of apartment or office buildings may first come to mind. However, there are also specialty REITs focused on owning specific types of real estate assets. Digital Realty Trust is in that category. As its name suggests, Digital Realty owns and leases out space for data centers.

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Thanks to the artificial intelligence (AI) boom, Digital Realty is growing rapidly. While the REIT’s cash distributions provide a forward dividend yield of around 2.8%, sell-side forecasts call for earnings growth in the 9% to 10% range over the next two years. Such growth should translate into further increases in Digital Realty Trust’s distributions and lead to shares appreciating in line with this growth.
Verizon Communications is shaking off its “value trap” reputation
Up 25% year to date, Verizon Communications is shaking off its reputation as a yield and value trap. For years, shares in the telecommunications company have been mired with this bad reputation, as a high dividend yield but a lack of price appreciation resulted in poor total returns.
But now, as the company has started reporting better-than-expected quarterly results and subscriber growth, investors have rewarded the stock with a higher valuation. However, if you’ve yet to buy, it’s not as if you’ve missed the boat. Shares still sport a high 5.5% forward yield. Verizon also has a multidecade track record of dividend growth. While not certain, this latest growth resurgence could result in a higher rate of dividend growth as well.