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Investors looking for stability amid summer market swings may want to take a closer look at dividend stocks. While the broader market struggled in July, high-quality dividend payers delivered stronger results, and Wall Street analysts still see meaningful upside in several established names.

August has historically been one of the weaker months for stocks, ranking as the third-worst according to the Stock Trader’s Almanac, with the S&P 500 typically posting only marginal gains. This summer has already brought volatility, driven by geopolitical tensions in the Middle East and ongoing uncertainty around Federal Reserve policy. July reflected that unease: the S&P 500 finished the month down 0.1%, the Nasdaq Composite dropped 3.2%, and the Dow Jones Industrial Average managed a modest 0.3% gain.

Dividend-focused strategies fared better. The ProShares S&P 500 Dividend Aristocrats ETF (NOBL) rose nearly 8% during the month, while the Vanguard Dividend Appreciation ETF (VIG) advanced about 1%. NOBL currently yields roughly 2.42% with a 0.35% expense ratio, and VIG yields about 1.54% with a low 0.04% expense ratio.

Investors often turn to dividend stocks during uncertain periods because they can offer more predictable income and help cushion downside moves. Dividend growth can also serve as a partial offset to stickier inflation. As ClearBridge Investments’ Michael Clarfeld noted earlier this year, the case for dividends remains strong given market volatility, future uncertainty, and the value of growing payouts.

Not every high-yielding stock is attractive, however. An unusually elevated yield can sometimes signal underlying distress. Many investors prefer Dividend Aristocrats—companies that have increased their dividends for at least 25 consecutive years. These tend to be higher-quality businesses with durable competitive positions rather than pure yield plays.

CNBC Pro screened the holdings of the NOBL ETF for Aristocrats that appear to have further room to run. The criteria included at least 15% upside to the average Wall Street price target (per FactSet) and a buy rating from at least 55% of covering analysts. Three names stood out.

Albemarle (ALB) was one of the weaker performers in July, falling 13%. Despite the decline, analysts see substantial recovery potential, with an average price target implying about 63% upside. The stock offers a 1.4% dividend yield, and roughly 58% of analysts rate it a buy. Lithium supply concerns have weighed on the shares, but Citi analyst Patrick Cunningham, who upgraded the stock in June, does not expect a meaningful glut to materialize. He views Albemarle as a primary beneficiary of longer-term structural demand for lithium thanks to its high-quality assets, conversion network, and ability to direct capital toward high-return growth projects. Current valuation levels, in his view, underappreciate the company’s next phase of growth. Albemarle is scheduled to report earnings on Wednesday.

Air Products and Chemicals (APD) carries the highest yield among the three at approximately 2.5%. Analysts see roughly 17% upside to the average price target, and 56% of those covering the stock rate it a buy. Shares were essentially flat in July. Last week the industrial gases company reported better-than-expected earnings for its fiscal third quarter, though revenue came in light. Management raised full-year earnings guidance while lowering capital expenditure expectations. CEO Eduardo Menezes pointed to decisions that further optimize the company’s large project portfolio, creating a clearer path to lower capital spending and continued profitable growth through high-quality traditional industrial gas projects.

Walmart (WMT) offers a more modest 0.9% dividend yield but carries nearly 26% upside to the average price target. About 67% of analysts rate the stock a buy. Shares slipped roughly 2% in July. In May the retailer issued a cautious outlook, reaffirming full-year adjusted EPS guidance of $2.75 to $2.85—below the $2.91 consensus expected by analysts at the time. More recently, however, Morgan Stanley’s consumer survey showed Walmart+ membership reaching a record high in July. The company reports results on August 20. Bernstein, which rates the shares overweight, has suggested buying on any meaningful pullback tied to softer comparable sales. Analyst Zhihan Ma noted that despite potential near-term deceleration in comps, Walmart remains in a strong fundamental position thanks to price leadership, improved assortment, and convenient delivery options.

These three Dividend Aristocrats illustrate why quality income stocks can appeal in uncertain markets. They combine established records of rising payouts with analyst conviction and measurable upside potential. As always, individual circumstances, risk tolerance, and further due diligence matter. Dividend stocks are not immune to declines, but their income component and generally more defensive profiles have historically helped investors navigate choppy periods like the one markets have faced this summer.

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