The major equity indices ended last week in the red after witnessing high volatility fueled by COVID-19 omicron variant fears, regarding its potentially negative impact on the economy. So, we think it could be wise to sidestep market volatility by betting on quality dividend-paying stocks Intel (INTC) and GlaxoSmithKline (NYSE:GSK). They also look undervalued at their current price levels. Let’s discuss.Growing concerns about the potential economic impact of the COVID-19 omicron variant and related restrictions contributed to the major stock market indexes closing in the red on Friday, capping off a week of extreme market volatility. The Dow Jones Industrial Average slipped 532.20 points intraday to close Friday’s trading session at 35,365.44, while the S&P 500 and Nasdaq Composite Index fell 48.03 points and 10.75 points, respectively, to close at 4,620.64 and 15,169.68.
Investors have remained cautious about taking new long positions because November inflation data showed that consumer prices have surged to a 6-8%, 40-year high, their fastest increase since 1982. Inflationary pressures have forced the Fed to act, and it has indicated that it will halt its pandemic-driven asset purchases early next year, giving way to three interest rate hikes in 2022 to counter the high inflation threat. However, according to a FactSet report, the S&P 500 will close at or above 5,000 by fiscal 2022.
So, we think it could be wise to bet on quality dividend-yielding stocks to hedge one’s portfolio against market volatility by ensuring a steady income stream. Given their stable dividend yield, Intel Corporation (NASDAQ:INTC) and GlaxoSmithKline plc (GSK) could be solid additions to one’s portfolio. In addition, they are currently trading at a discount to their peers.