3 Dividend Stocks To Reduce Portfolio Risk

One of the big advantages of dividend growth investing is that it reduces risk and investment mistakes by focusing solely on stocks that pay rising dividends. Investing in quality stocks – and in particular dividend growth stocks – offers risk reduction based on the nature of the investment.

Buying a portfolio of quality dividend stocks leads to diversification. Diversification reduces risk mathematically; if you have only 5% of your portfolio in a stock, you can’t lose more than 5% in that stock.

Dividend growth stocks represent proven businesses. The longer a company’s dividend streak, the more it demonstrates its ability to generate actual cash and return it to shareholders. This is why we recommend stocks with at least 10+ consecutive years of dividend increases, which we call ‘blue chip’ stocks.

The following 3 dividend stocks can help reduce portfolio risk.

Air Products & Chemicals (APD)

• Dividend Yield: 3.0%

Air Products & Chemicals is one of the world’s largest producers and distributors of atmospheric and process gases, serving other businesses in the industrial, technology, energy, and materials sectors.

Air Products & Chemicals operates through three main business units: Industrial Gases – Americas, Industrial Gases – EMEA, and Industrial Gases – Asia.

Its 43-year streak of consecutive dividend increases qualifies it to be a member of the Dividend Aristocrats Index.

Air Products & Chemicals reported its financial results for the third quarter of fiscal 2025 in August. The company generated revenues of $3.02 billion during the quarter, which was up 1.0% year-over-year, beating the analyst consensus estimate by $30 million.

The company saw its operating margin decline in the Americas and in Europe, although margins improved in Air Products & Chemicals’ Asia business, where operating margins expanded by 150 base points, which is why operating income, overall, was flat.

Air Products & Chemicals was able to generate adjusted earnings-per-share of $3.09 during the fiscal third quarter, which was down 3% compared to the previous year’s period.

Medtronic plc (MDT)

• Dividend Yield: 3.2%

Medtronic is the largest manufacturer of biomedical devices and implantable technologies in the world. It serves physicians, hospitals, and patients in more than 150 countries and has over 95,000 employees.

Medtronic has four operating segments: Cardiovascular, Medical Surgical, Neuroscience and Diabetes. Medtronic has raised its dividend for 47 consecutive years. The company generated $34 billion in revenue in its last fiscal year.

In mid-August, Medtronic reported (8/19/25) results for the first quarter of fiscal 2026. Organic revenue grew 5% over the prior year’s quarter thanks to strong growth in Cardiovascular and Diabetes. Earnings-per-share grew 2%, from $1.24 to $1.26, and exceeded the analysts’ consensus by $0.03.

In addition, Medtronic reiterated its guidance for ~5.0% growth of revenue and organic revenue in fiscal 2026 and raised its guidance for annual earnings-per-share from $5.50-$5.60 to $5.60-$5.66.

Archer Daniels Midland (ADM)

• Dividend Yield: 3.7%

Archer-Daniels-Midland is the largest publicly traded farmland product company in the United States. Its businesses include processing cereal grains, oilseeds, and agricultural storage and transportation.

Archer-Daniels-Midland reported its first-quarter results for Fiscal Year (FY)2025 on May 6th, 2025. The company reported second-quarter 2025 earnings that fell sharply from last year but still beat profit expectations. Revenue declined 4.9% year-over-year to $21.17 billion, missing consensus estimates, while net earnings dropped 55% to $219 million.

Reported EPS was $0.45, down from $0.98 in the prior-year quarter, though adjusted EPS of $0.93 beat expectations despite falling 10% year-over-year. Segment operating profit declined 10% to $830 million, reflecting weakness in Ag Services & Oilseeds and Carbohydrate Solutions, partly offset by modest growth in Nutrition.

Performance varied across ADM’s business lines. Ag Services & Oilseeds profit fell 17% to $379 million, with crushing operations hit hardest due to weaker vegetable oil demand tied to biofuel and trade policy uncertainty. Carbohydrate Solutions declined 6% to $337 million, as higher corn costs pressured international starch and sweetener margins.

Nutrition was a relative bright spot, with operating profit up 5% to $114 million, driven by improvements in Animal Nutrition and ongoing cost optimization, though Human Nutrition saw declines tied to lower margins and temporary plant impacts. Year-to-date, adjusted EPS was $1.63, down 35% from the prior year, and operating profit fell 26%.