Investors have poured money into artificial intelligence stocks, leaving several dependable dividend payers trading outside the spotlight. A leading income manager says Williams Companies, Unilever and Automatic Data Processing could offer income, durability and exposure to long-term growth.
A Market Built Around One Powerful Theme
The stock market remains near record territory, yet much of its strength continues to depend on a relatively narrow group of mega-cap technology companies.
That concentration has created an unusual environment. Major indexes look healthy, while many profitable businesses with dependable cash flows and established dividends receive limited investor attention.
Michael Clarfeld, portfolio manager for ClearBridge Investments’ dividend strategy, believes the fixation on AI has produced compelling opportunities elsewhere in the market.
“People are so myopically focused on things to do with AI that they’re overlooking things in other areas, and it’s really creating some pretty terrific opportunities,” Clarfeld said.
Clarfeld helps manage the ClearBridge Dividend Strategy Fund and the Franklin ClearBridge Enhanced Income ETF. His approach emphasizes companies with durable businesses, healthy balance sheets and the ability to increase dividends over time.
That last point matters. A stock’s current dividend yield tells investors how much income they receive today. Dividend growth provides a clue about what that income could become several years from now.
ClearBridge’s strategy has trailed the S&P 500 during the current momentum-driven market. That result is understandable. Dividend portfolios generally hold less of the high-growth technology companies responsible for a large portion of the index’s gains.
History suggests the relative performance gap can eventually narrow when market participation broadens and investors begin paying more attention to valuation, cash flow and income.
Clarfeld highlighted three stocks that may benefit from that shift.
Williams Companies: An AI Power Play Hiding in a Pipeline Stock
Williams Companies is one of the largest natural gas infrastructure operators in the United States. Its network moves roughly one-third of the nation’s natural gas through pipelines connecting major production regions with utilities, industrial customers and population centers.
The stock recently offered a dividend yield of approximately 3%.
At first glance, Williams looks like a conventional energy infrastructure company. Its growing exposure to electricity demand gives it a more interesting role in the AI investment cycle.
Data centers require enormous quantities of dependable power. Electricity demand continues around the clock, making intermittent generation sources difficult to rely on without substantial storage or backup capacity. Natural gas can provide the dispatchable power needed to keep those facilities operating when renewable generation is unavailable or insufficient.
Williams therefore occupies a valuable position between rising natural gas production and rising electricity consumption.
The company reported record second-quarter 2026 results, including higher adjusted earnings and adjusted EBITDA. Management also increased its quarterly dividend by 5% earlier this year, extending a pattern of annual dividend growth.
The Financial Case
Pipeline operators generally make money by transporting and processing energy rather than making a direct bet on the daily price of natural gas. Long-term contracts and regulated assets can create relatively predictable cash flows.
That does not eliminate commodity risk. A prolonged decline in production or weak customer finances can still affect volumes and growth projects. However, Williams’ business model offers more stability than a traditional exploration and production company.
The company could also benefit from several overlapping trends:
- Growing U.S. electricity demand
- New natural gas generation
- Expanding LNG exports
- Data center construction
- Manufacturing reshoring
- Increased demand for reliable power infrastructure
These trends require pipelines, storage and connections that can take years to permit and construct. Existing infrastructure becomes more valuable when demand rises faster than new capacity can be added.
The Main Risk
Williams shares have already gained substantially this year. A strong stock price can compress the dividend yield and leave less room for valuation expansion.
Investors should also watch capital spending. New infrastructure projects can create growth, but they require significant funding and carry regulatory, construction and execution risks.
The central question is whether Williams can convert rising power demand into sustained cash-flow growth without weakening its balance sheet.
Unilever: A 3.5% Yield Backed by Everyday Products
Unilever is the least exciting company on this list, which may be precisely why it deserves attention.
The company owns a global portfolio of household and personal-care brands, including Dove, Hellmann’s, Vaseline, Ben & Jerry’s and Knorr. Consumers may reduce discretionary spending during a slowdown, yet they continue purchasing soap, deodorant, food and other daily necessities.
Unilever shares recently yielded approximately 3.5%, the highest of Clarfeld’s three highlighted stocks.
The company has also been generating organic volume growth at a time when many consumer-goods businesses have struggled to expand the number of products they sell.
Volume growth is an important distinction. Consumer companies can increase revenue by raising prices, selling more units or combining the two. Price increases can support short-term results, though excessive increases may encourage shoppers to trade down to cheaper private-label products.
Unit growth indicates that demand for the underlying brands remains healthy.
The Financial Case
Unilever combines several qualities that income investors typically seek:
- Recurring demand for essential products
- Global geographic diversification
- Established consumer brands
- Consistent cash generation
- A dividend yield above the broader market
The company can also use its scale to spread advertising, distribution and product-development costs across many countries and brands.
If management continues improving the portfolio and shifting resources toward its strongest products, earnings could grow even in a relatively slow consumer environment.
Currency movements add another layer. Unilever reports in euros while generating sales throughout the world. Exchange rates can create volatility in reported revenue and earnings even when the underlying business remains stable.
The Main Risk
Consumer staples face persistent pressure from retailer-owned brands, changing consumer preferences and weak demand in certain markets.
Unilever must balance price increases with affordability. If shoppers feel squeezed, they may switch to lower-cost alternatives. The company also needs to prove that its recent volume growth can continue after several years of inflation-driven pricing.
For investors, the key signal is the relationship between volume, pricing and operating margins. Healthy volume combined with stable margins would suggest the company’s brand investments are working.
ADP: A Dividend Grower the AI Sell-Off May Have Mispriced
Automatic Data Processing processes payroll and provides human-resources technology to more than 1.1 million clients across more than 140 countries.
The stock recently offered a dividend yield of approximately 2.4%.
ADP came under pressure as investors questioned whether generative AI could disrupt established software and business-service companies. Clarfeld believes payroll is among the areas least vulnerable to sudden displacement because the service is deeply embedded in customer operations.
“When you think about businesses that are likely to be disintermediated by AI, payrolls would seem like it’s one of the last of them,” he said. “It’s very mission critical.”
Payroll errors create immediate problems for employees, employers and regulators. Companies need accurate tax withholding, wage calculations, compliance records and on-time payments. That complexity gives experienced providers an advantage.
Changing payroll platforms can also be costly and disruptive. Those switching costs contribute to recurring revenue and high customer retention.
The Financial Case
ADP has several characteristics of a high-quality compounder:
- Recurring subscription and processing revenue
- High customer retention
- Regulatory and compliance expertise
- A large base of client funds
- Strong cash generation
- A long history of dividend increases
ADP also earns interest on client funds held before payroll and tax payments are distributed. Higher interest rates can increase that income, although the exact benefit depends on balances, investment yields and interest-rate movements.
AI could eventually strengthen ADP’s business by automating customer support, detecting payroll errors, improving workforce analytics and reducing administrative work.
That creates an important possibility. Some investors may be treating AI as a threat to ADP’s software, while the technology could improve its products and operating efficiency.
The Main Risk
ADP is closely connected to employment. A weaker labor market can reduce the number of workers on client payrolls, slow new business formation and pressure bookings.
Valuation also matters. High-quality companies frequently trade at premium earnings multiples. Even a durable business can produce disappointing stock returns if investors pay too much for it.
The most useful signals will be client retention, new-business bookings, payroll volumes and management’s fiscal 2027 outlook.
The Dividend Durability Test
A tempting yield can become expensive if the underlying business weakens or the dividend gets cut. Investors evaluating these three stocks can use a simple three-part framework.
1. Cash-Flow Visibility
How predictable is the company’s cash generation?
Williams benefits from contracted and regulated infrastructure. Unilever sells frequently purchased consumer products. ADP earns recurring revenue from essential payroll and human-resources services.
Each company has a different business model, but all three possess some level of recurring demand.
2. Dividend Capacity
Can earnings and cash flow support both the dividend and future business investment?
Investors should compare dividend payments with free cash flow, debt obligations and capital expenditures. A company that distributes nearly all its available cash has little flexibility when conditions deteriorate.
Dividend growth supported by rising cash flow is generally healthier than a high payout funded through additional borrowing.
3. Reinvestment Runway
Where can the company deploy capital after paying its dividend?
Williams has energy infrastructure projects tied to power demand and LNG exports. Unilever can reinvest in brands, product innovation and emerging markets. ADP can expand its technology platform and cross-sell additional workforce-management services.
The strongest income stocks often combine current distributions with opportunities to reinvest capital at attractive returns.
The Quiet Companies May Be AI Beneficiaries Too
The most interesting aspect of Clarfeld’s picks is that two have meaningful connections to the AI economy.
Williams supplies infrastructure needed to deliver fuel for data center power. ADP can incorporate AI into a mission-critical platform used by more than a million customers.
This shows how the economic impact of AI may spread beyond chipmakers, cloud platforms and software developers.
The next stage of the AI investment cycle could reward companies providing electricity, natural gas, cooling, networking, payroll, compliance and other essential services. These businesses may capture some of AI’s growth while offering cash flows that are less dependent on constantly rising expectations.
Unilever plays a different role. It offers defensive consumer exposure and a dividend that could help stabilize a portfolio if technology stocks experience a valuation reset.
Together, the three companies represent infrastructure, consumer resilience and recurring business services. That combination explains why they can serve as diversification tools in a concentrated market.
Income Investors Should Look Beyond the Yield
Williams, Unilever and ADP offer yields ranging from roughly 2.4% to 3.5%, but the investment case extends beyond current income.
Williams provides exposure to America’s growing need for natural gas and reliable electricity. Unilever offers global consumer brands and defensive cash flow. ADP combines recurring payroll revenue with the potential to use AI inside a deeply embedded platform.
None is free from risk. Williams has already rallied, Unilever must sustain volume growth, and ADP faces employment sensitivity and valuation concerns.
Still, these companies demonstrate what an overlooked dividend opportunity can look like: a durable business, visible cash flow, a manageable payout and a credible path to future growth.
In a market captivated by AI, dependable businesses can appear boring. Boring can become valuable when expectations, valuations and market leadership begin to change.
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