Investing in Safe Havens Amidst Geopolitical Uncertainty
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Conflict in the Middle East has shaken markets over the last few weeks, driving up oil prices and market uncertainty.
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When uncertainty reigns, investors look for safe havens with steady revenue and strong dividends.
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Verizon Communications and American Electric Power offer the best of both worlds: steady returns and income, plus insulation from the Iran war.
The war in Iran has already sent multiple shockwaves through the markets. Gas prices have soared, tankers are on fire in the Strait of Hormuz, and crude oil futures are trading like 2021 meme stocks. With the resumption of normal shipping patterns at least a few weeks away, the disruption will continue to snake its way through market indices, even in energy-independent markets like the United States. When geopolitical pressure enters the picture, investors often take risk off the table and search for stable stocks that offer yield and minimal volatility.
However, because of the Middle East’s significant influence on global markets, it’s important not only to seek steady dividends but also to invest in companies that are resilient to disruption from the Iran war specifically. The two stocks discussed below were chosen because they offer strong dividends and operate primarily within the United States, minimizing exposure to Middle East risks. These qualities make them suitable for risk-averse portfolios if the conflict continues.
When seeking safe havens amid geopolitical headwinds, investors focus on sectors with predictable income and limited international exposure. In the current climate, this means selecting companies with revenue sources largely independent of the Middle East. Telecom and utilities stand out, as they offer steady revenue, healthy dividends, and operations that minimize the risk of Middle East disruptions.
A growth story from Verizon Communications Inc. (NYSE: VZ)? Believe it or not, the telecom giant is in the middle of a turnaround that’s surprising even the most optimistic analysts.
In Q4 2025, the company reported 616,000 quarterly postpaid phone net adds (best since 2019) and more than 370,000 broadband subscribers, and the Frontier acquisition added another 16 million wireless and broadband connections to the Verizon network.
Can you spot on the chart where the earnings news dropped? VZ shares soared 11% following their Q4 report, then tacked on another 12% in the following three weeks. The massive surge created a Golden Cross on the 50- and 200-day moving averages, but also sent the Relative Strength Index (RSI) deep into overbought territory. Now that the parabolic momentum has faded, shares are consolidating around the $50 level while the RSI recedes back into a healthy range. Verizon’s Q4 earnings changed the stock’s outlook, and there’s now an opportunity for upside with the steady dividend income.
The utility sector is a popular place to invest during geopolitical turmoil, largely thanks to its steady dividend payments and minimal volatility.
The American Electric Power Company (NASDAQ: AEP) is a regionally operated utility based in Ohio, serving 11 states and supplying electricity to residential and business customers. Middle East disruptions are already impacting natural gas prices, but American Electric Power’s diverse supply mix of natural gas, coal, nuclear, and renewables helps offset price shocks in any one commodity.
Regulated utilities also have adjustment clauses that pass through fuel increases to ratepayers, and the company has little exposure to shipping or commodity trading that could impact short-term margins.
The company reported strong Q4 2025 results on Feb. 12, with operating EPS of $5.97, beating analysts’ expectations, and Q4 revenue exceeding forecasts. Management’s 2026 EPS guidance points to 7%-9% earnings growth. Investors also benefit from a 2.9% yield and a 57% payout ratio. The firm has raised payouts for 15 straight years, growing dividends at a 5.7% annual rate over five years.
In addition to the value proposition, AEP also boasts one of the best-looking charts a dividend seeker can ask for. The stock is in the middle of a long-term uptrend, which has propelled shares up more than 28% over the last 12 months. With strong support at the 50-day moving average and an RSI back under the Overbought threshold of 70, AEP shares could be consolidating for the next leg up in the trend.
The article “2 Dividend Stocks Insulated From Middle East Conflict” was originally published by MarketBeat.
