Investors often look to safe and reliable assets in volatile market environments as a hedge to protect their investment capital. Rising inflation rates, interest rate hikes and global supply chain issues had already caused a lot of fear among stock market investors for several months. High Growth Stocks in the technology sector have seen significant declines in their valuations as investors flee risky investments.

Withdrawing your money from the stock market due to fears of a stock market crash may seem like the right way to go, because you can’t tell when it might happen. However, there might be ways to keep your money in the stock market while enjoying significant shareholder returns, until things calm down.

Dividend investment is a great strategy for continuing to generate passive income in your portfolio in volatile market environments. Today I’m going to discuss two dividend-paying stocks you might consider adding to your portfolio for this purpose.

A banking giant

Bank of Nova Scotia (TSX:BNS)(NYSE:BNS) is a $112.48 billion market capitalization bank headquartered in Toronto. It is one of the Big Six Canadian banks and a mainstay for investors looking for long-term assets to buy and hold for their portfolios. Canada’s Big Six Banks are among the most reliable dividend-paying stocks, with long periods of dividend payouts and strong fundamentals that put investors at ease.

With rising interest rates positioning the financial sector to perform well, Scotiabank shares could be a natural fit for many investors. The bank’s strong domestic operations could be boosted by interest rate hikes. Its strong international presence means that the bank enjoys a degree of protection if its domestic banking operations are affected due to difficult economic conditions.

Scotiabank shares are trading at $92.16 per share at the time of writing and they offer a dividend yield of 4.34%.

An insurance giant

Manulife Financial (TSX:MFC)(NYSE:MFC) is a $47.98 billion market capitalization multinational insurance company and financial services provider headquartered in Toronto. The company is present in Canada, Asia and the United States. Insurance companies have strong business models that generate stable and predictable revenues.

Manulife Financial is one of the 30 largest insurance companies in the world and its business is strong. The company posted record profits in 2021, with its net profit in the fourth quarter of the year reaching $2.08 billion. Its earnings report beat overall analyst expectations, positioning it well for the future.

Shares of Manulife Financial are trading at $24.78 per share at the time of writing and offer a dividend yield of 5.33%.

Insane takeaways

Investing in dividends with the right income-generating assets can help you generate significant returns from your investment capital. However, it is crucial to make calculated investment decisions when investing in dividend-paying stocks. Not all dividend stocks are good investments.

Companies with strong business models and wide economic moats are more likely to generate strong returns for shareholders in uncertain market conditions. It remains to be seen how long market volatility will last and whether it will worsen in the coming weeks. Times like these require searching reliable investments with a track record that supports the thesis to buy them and keep them for the long term.

Manulife Financial and Scotiabank are two TSX stocks that could be ideal for this purpose.