Investors looking to protect themselves from the risks of artificial intelligence may want to consider certain dividend stocks, according to investor Jenny Harrington. In fact, dividend stocks have outperformed so far this year as investors shift away from large-cap stocks and toward “old economy” stocks, he said. The iShares Select Dividend ETF is up nearly 11% year-to-date, and the Schwab U.S. Dividend Stock ETF is up about 15%. Meanwhile, the S&P 500 was almost flat. DVY 1Y Mountain iShares Select Dividend ETF One-Year Performance Gilman Hill Asset Management CEO Harrington said investors are now rebalancing their portfolios as they realize the disparity in performance and valuations between big tech and old economy stocks has become “unreasonably wide.” High valuations for tech companies and concerns about disruption from artificial intelligence have hurt some sectors of the market. For example, software stocks tumbled earlier this month after Anthropic’s latest AI models appeared to allow companies to pursue legal procedures and build programs that otherwise would have required paying expensive licenses. The iShares Expanded High-Tech Software Sector ETF is down nearly 23% since the beginning of the year. Harrington’s Stock Picks In this environment, Harrington is looking for names that he believes won’t be disrupted or destroyed by AI. “Even if people lose their jobs en masse, they’re still buying toilet paper and diapers,” she says. In fact, one of her top picks is Kimberly-Clark, which makes Huggies and Cottonelles. The company’s stock has risen more than 7% since the beginning of the year, and its dividend yield is 4.66%. Harrington noted that the company has paid dividends for 92 years and increased dividends for 54 years. According to him, the company’s stock trades at a P/E ratio of approximately 14.5 times. Earnings growth has been minimal, but Harrington expects profits to pick up once the benefits of the Kenview acquisition become clear. KMB 1Y Mountain Kimberly-Clark’s One Year Results Kimberly-Clark announced in November that it had agreed to acquire the Tylenol maker for $48.7 billion. In September, Tylenol came under intense scrutiny by the Trump administration, which made unsubstantiated claims linking the use of Tylenol’s active ingredient during pregnancy to autism. “If this merger goes through, the factors that caused the stock prices of both companies to decline will be diminished, and a truly creative, better, and more substantial business will emerge from it,” Harrington said. Another name Harrington finds attractive is Vici Properties, a real estate investment trust that leases to Las Vegas casinos such as Caesars Palace, MGM Grand and the Venetian Resort. This stock has a dividend yield of 6.06%. The company is a triple net lease REIT, meaning all operating costs, including taxes, improvements, and maintenance, are borne by the tenant. He pointed out that it is trading at 12 times its funds under management. “What we have here is a very high-quality asset,” Harrington said. VICI 1Y MOUNTAIN VICI Properties’ one-year performance tenants, who have been on leases for decades, have been through long economic downturns and know how to weather them, she said. “Even if there is a massive disruption by AI, I don’t think it’s permanent. I don’t think there’s a 30-year apocalypse ahead of us,” she said. “I think it’s about a five-year period before people realize, ‘Okay, my job is over, let’s find a new one.'” The company’s earnings are growing at about 9%, and its dividend is likely to increase as it grows, Harrington said. Unilever is also on her list. The global consumer staples company sells everything from food to personal care and household products, and includes brands such as Hellmann’s and Vaseline. The stock has a P/E ratio of 17 times. “Because the company is located outside the U.S., it trades at a discount to peer Procter & Gamble (20.5x),” Harrington said. UL 1Y Mountain Unilever International’s U.S.-listed stock had an outperforming one-year performance and was trading at a historically deep valuation discount. “We’re seeing the evaluation gap narrowing,” she says. “There’s still room to work on that.” Harrington also likes Enterprise Products Partners, which provides midstream energy services to producers and consumers of natural gas, natural gas liquids, crude oil, among others. He said the company’s balance sheet is conservative, with durable production volumes and options to increase exports. The stock’s stock yield is 6.09%, up 13% year-to-date. Exclusive Invitation: CNBC Pro Live — Wealth for Women: As a valued CNBC Pro subscriber, you are invited to an exclusive live in-person event on May 28th on Nasdaq Marketsite. Designed specifically for serious investors looking for more than surface-level market commentary. Tickets are limited and CNBC Pro subscribers have exclusive access to special discounts.
