The first quarter of 2022 is behind us and it was chock-full of twists and turns, fueled by soaring inflation, a Russian invasion, rising interest rates, and subdued guidance. The S&P 500 posted its biggest quarterly decline since the start of 2020, closing Q1 down 5%. But things looked a lot worse only serval weeks ago.

The S&P 500 surged back above its 200-day moving average and is down around 6% off its highs, after falling into correction territory multiple times in Q1. The Nasdaq ripped off a 14% run following its drop into bear market levels around the middle of the month, with it currently trading roughly 12% below its November records.

Selling might return and the next three quarters could remain volatile given all of the very real factors tugging at economic growth and earnings multiples. What’s next in Ukraine remains difficult to gauge and it is unclear how quickly inflation will start to come down from its 40-year highs given the ongoing supply chain issues.

What investors can count on is how difficult it is to call a market bottom, with the first quarter and the last two years providing ample examples. Therefore, investors who can handle downside risk and swings in the near term shouldn’t be afraid of buying strong stocks they plan to hold for years.

Interest rates also appear poised to continue to accommodate stocks, even though they are rising and the Fed Funds Rate is officially off its rock-bottom levels. The 10-year U.S. Treasury is well above its covid/historic lows of below 0.60% at around 2.4% as of Friday afternoon.

A rising rate environment doesn’t support the sky-high valuations we saw during the initial covid boom. And the market already hammered countless growth names. Just look at where the ARK Innovation ETF (ARKK) is still trading.

That said, 10-year yields are barely at three-year highs and well within the range of the past decade. The nearby chart showcases how low 2.4% yields are compared to pre-financial crisis levels. This backdrop could leave Wall Street looking to stocks as the best way to outpace 8% inflation.

Here are a few dividend-paying stocks that are ready to thrive as they help power the economy and perhaps your portfolio…

Image Source: Federal Reserve Economic Data - St. Louis Fed

NextEra Energy (NEE Quick QuoteNEE - Free Report)

NextEra Energy, through its various subsidiaries, is one of the country’s biggest electric utilities and a leader in renewable energy, boasting that it’s the world’s largest producer of wind and solar energy. Crucially, given the variability of wind and solar, NEE is also a global leader in battery storage. And NextEra generates clean, emissions-free electricity from seven commercial nuclear power units.

Nuclear, which currently accounts for 20% of U.S. electricity generation, is gaining steam as more countries, from China to France, invest heavily to help reach a carbon-neutral, clean energy future. Plus, renewable’s share (not including nuclear) of U.S. electricity generation is projected to soar from 20% to roughly 40% by 2050, with wind and solar set to be the biggest gainers. These trends clearly benefit NextEra Energy.

NEE is coming off two slightly down years that saw its revenue decline YoY. NextEra Energy’s outlook is strong, having added over 7K net megawatts of new renewables and battery storage projects to its backlog in 2021. Zacks estimates call for its FY22 revenue to surge 36% to blow away its FY19 levels ($19.2 billion) at $23 billion and then pop another 8% next year.

Image Source: Zacks Investment Research

At the bottom end, its adjusted 2022 earnings are projected to climb 11% to $2.82 per share and then climb 9% in FY23. This comes on top of 10% EPS expansion last year and NextEra Energy has consistently topped our EPS estimates.

NEE’s FY22 and FY23 consensus figures have inched higher recently to help it land a Zacks Rank #2 (Buy) right now. Plus, six of the eight brokerage recommendations Zacks has for NextEra Energy are “Strong Buys,” with nothing below a “Hold.” And the firm lifted its dividend payout by 10% YoY for a yield of 2% at the moment.

NextEra Energy shares have climbed 165% during the last five years to blow away its industry’s 20% climb and the S&P 500’s 100%. This impressive outperformance stretches out for the past decade and continued during the last three years as well.

NEE has roughly tracked the benchmark in the last year and closed regular trading Friday 9% below its records at $85.71 per share. NextEra also trades at an 18% discount to its own highs at 29.5X forward 12-month earnings, which places it right around its three-year median.

Cummins Inc. (CMI Quick QuoteCMI - Free Report)

Cummins manufactures engines and powertrains of all shapes and sizes from diesel to electric. Air handling systems, electric power generation systems, batteries, electrified power systems, hydrogen generation, and other power solutions all play key roles in CMI’s expanding portfolio mix. The historic U.S. engine maker is also going all-in on a cleaner future, having gained traction in hydrogen fuel cell technology and beyond.

CMI’s New Power division includes battery, fuel cells, and hydrogen-production technologies. Cummins is focused on new-age powertrains including “advanced diesel, natural gas, hydrogen engines, hybrids, battery electric, and fuel cells along with an increased use of low carbon fuels and renewable electricity and related infrastructure.”

Cummins in mid-February unveiled what it calls the first “fuel-agnostic internal combustion powertrain solutions,” utilizing engine blocks and core components that share common architectures to be optimized for various low-carbon fuel types. CMI also announced in Feb. its plans to buy Meritor, which makes electric powertrain solutions for commercial vehicle and industrial markets, among other offerings. 

Image Source: Zacks Investment Research

Cummins took a hit during 2020 amid the initial covid economic halt. The firm then bounced back in a big way, with its FY21 revenue up 21% to $24 billion to top its pre-covid levels. Zacks estimates call for its sales to climb 7% and 6%, respectively in 2022 and 2023. And its bottom-line growth appears even stronger, with its adjusted EPS figure projected to surge 20% this year and 16% in the following year.

Cummins did provide some slightly downbeat earnings guidance amid elevated costs across logistics, materials, and beyond. Still, CMI lands a Zacks Rank #3 (Hold) and its margins and earnings should slowly improve as global supply chains rebound.

Thankfully, the powertrains and engine powerhouse boasts a strong balance sheet that helped it return over $2 billion to shareholders last year via dividends and buybacks. Cummins raised its dividend for the 12^th straight year, with its current 2.89% yield topping the 30-year U.S. Treasury’s 2.44% and its industry’s 2.77%.

The stock has dropped 25% from its May 2021 records. At $201 a share, it trades 31% below its current Zacks consensus price target. Cummins shares had roughly tracked the broader Autos-Tires-Trucks market over the last decade until its pullback.

Thanks to the drop, coupled with its strong earnings outlook, Cummins trades 16% below its ten-year median at 11.2X forward 12-month earnings. This also represents 45% value compared to its own highs and 55% against its industry’s current forward P/E. These are some enticing levels for CMI stock both in terms of price and value.