Election season has a way of making portfolios feel more fragile than they are. Polls point one direction, betting markets point another, and stocks swing on every headline about who controls Congress next.
That anxiety tends to push investors toward positioning for an outcome nobody can reliably call. Polling has missed badly in recent cycles, and fractures inside both parties make the numbers even harder to trust.
There’s a cleaner approach. Instead of betting on a winner, own companies that pay cash regardless of the result. That’s where midterm election dividend stocks earn their place. Dividend income shows up whether the market rallies or stumbles, and it compounds when reinvested.
Three names fit that mold across three very different corners of the market: an insurer leaning into higher rates, a drug giant with a long record of raising payouts and a refiner that Wall Street may be underestimating.
The Year After a Midterm Has Historically Favored Stocks
History leans bullish on the other side of the vote. Going back to 1900, the market has gained about 12.5% on average in the year after a midterm, according to Marc Lichtenfeld, Chief Income Strategist at The Oxford Club.
Narrow the window to 1980 onward, and the average return on the S&P 500 climbs to roughly 17.5%. Since 1938, the post-midterm year has been positive about 95% of the time, by his count.
The logic is less mystical than it sounds. By a president’s second year, early enthusiasm fades, the opposition often gains ground, and gridlock sets in. Fewer sweeping laws mean businesses can plan with more certainty, and markets tend to reward that.
None of that is a reason to trade the election. Money needed within a year or two doesn’t belong in stocks, in Lichtenfeld’s view, and long-term investors are better off staying the course. A 3% to 5% dividend yield makes it easier to stomach when the market turns.
Rising Rates Turn Insurers Into Quiet Winners
Insurers collect premiums and invest them conservatively so claims can be paid. When rates climb, those portfolios earn more, but a $300,000 home policy still pays $300,000. The spread widens in the insurer’s favor.
Lincoln National Today
Lincoln National
$39.86 -1.25 (-3.04%) As of 10/23/2026 03:59 PM Eastern This is a fair market value price provided by Massive. Learn more.52-Week Range$32.18
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$47.67
Dividend Yield4.52%
P/E Ratio3.45
Price Target$48.67
Lincoln National NYSE: LNC is Lichtenfeld’s pick for this theme, but with a caveat. Annuities are one of its biggest revenue drivers, and he has long warned investors about their cost, complexity and steep early-exit penalties.
Demand doesn’t care about that critique. Fixed annuities are popular, and higher rates make them more appealing. A 4% annuity was a tough sell a few years ago. At 6% to 7%, the math gets interesting for retirees chasing certainty.
Lincoln National has also transferred some reserves to a reinsurer, shifting a portion of potential life insurance claims off its own books. Add a dividend yield near 4.5%, and the stock pays investors to wait.
The market has cooled on financials after a run to record highs, partly a sell-the-news move once higher rates arrived. A steady climb in rates could lift margins and sentiment. A sudden spike is the risk worth watching.
Drug Demand Holds Up No Matter Who Controls Washington
Healthcare is about as recession-resistant as markets get. People with serious conditions find a way to fill prescriptions, regardless of the economy or the party in power.
AbbVie Today
$285.66 +0.47 (+0.16%) As of 10/23/2026 03:59 PM Eastern This is a fair market value price provided by Massive. Learn more.52-Week Range$190.75
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$291.40
Dividend Yield2.42%
P/E Ratio80.69
Price Target$279.86
AbbVie NYSE: ABBV has been one of Lichtenfeld’s long-running favorites, dating back to when the stock was widely disliked. It has raised its dividend every year since its spinoff from Abbott Laboratories NYSE: ABT more than a decade ago, the kind of perpetual dividend raiser income investors prize.
The growth hasn’t stalled. Revenue rose 10% in the second quarter, backed by a deep pipeline, some of the world’s top-selling cancer drugs and a strong record on acquisitions.
The common objection is valuation after a long run. At roughly 20 times forward earnings, AbbVie isn’t cheap—but it isn’t stretched either. Continued earnings growth or a big pipeline win could support a higher multiple, and stocks making new highs often keep making them.
Policy is the real swing factor. Medicare price negotiations and Food and Drug Administration (FDA) approval timelines affect AbbVie just as they do Eli Lilly NYSE: LLY, Pfizer NYSE: PFE and Merck & Co. NYSE: MRK. A broad drug portfolio spreads that risk, and the industry ranks among Washington’s largest lobbyists.
An Oil Risk Premium Could Keep Refiner Margins Elevated
Energy’s case rests on a shift that may not unwind quickly. The disruption around the Strait of Hormuz exposed how easily supply can be choked off. Even with a peace deal, Lichtenfeld expects a lasting risk premium that ke
Source: www.marketbeat.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
