Rising tensions between the U.S. and Iran, higher oil prices, and fresh questions around Federal Reserve rate cuts are putting inflation risk back on investors’ radar. In this kind of market, many readers look for large, financially solid companies that not only pay dividends but also have a record of increasing them while keeping payout ratios under control. This article focuses on three stocks from an Inflation-Protected Dividend Stocks screener that appear exposed to the latest news and may warrant a closer look for readers deciding whether to invest or stay on the sidelines.

Southwest Gas Holdings (SWX)

Overview: Southwest Gas Holdings operates a regulated natural gas utility, purchasing, transporting, and distributing gas to around 2.3 million residential, commercial, and industrial customers across Arizona, Nevada, and California through its pipeline and storage network.

Operations: The company generates its revenue primarily from Natural Gas Distribution, which contributed about US$1.8b in 2025.

Market Cap: US$6.6b

Southwest Gas Holdings gives investors exposure to a large, regulated gas utility that can benefit from inflation through tariff structures and capital investment added to its rate base, in a context where energy markets are reacting to geopolitical tensions. Earnings are forecast to grow, supported by population growth in the Southwest and sizeable planned projects such as the Great Basin pipeline expansion, while a history of dividends may appeal to income seekers who are monitoring inflation risk. At the same time, a relatively high P/E, pressure on profit margins, and reliance on external borrowing raise questions about how much safety is already reflected in the current valuation. The key issue for investors is how these factors may influence long term dividend durability and total returns.

Southwest Gas Holdings looks like a classic inflation shield, but the real story sits in how its regulated projects, debt load, and payout ambitions fit together in one picture. The 1 key reward and 2 important warning signs (1 is major!) could reveal what the headline numbers are not showing yet.

Otter Tail (OTTR)

Overview: Otter Tail is a diversified U.S. company that combines a regulated electric utility in Minnesota, North Dakota, and South Dakota with manufacturing and PVC pipe businesses that serve customers across industries such as agriculture, construction, and municipal water systems.

Operations: Otter Tail generates its revenue across three segments, with Electric at about US$582.9m, Plastics at roughly US$408.4m, and Manufacturing at around US$322.4m.

Market Cap: US$3.8b

Otter Tail attracts attention in an inflation focused market because its regulated utility can often pass higher costs through to customers, while the Manufacturing and Plastics segments give it extra earnings levers as resin and pipe pricing responds to geopolitics and tariffs. At the same time, investors need to weigh litigation settlements in the PVC pipe antitrust cases, modest dividend coverage from free cash flow, and forecasts for earnings to decline on average over the next few years even as ROE is projected to improve. How those cross currents play out, along with the impact of elevated interest rates on a capital intensive utility plan, is where the Otter Tail story gets interesting for dividend oriented investors.

Otter Tail’s mix of regulated utility earnings and more volatile plastics and manufacturing profits can mask what really drives its dividend story, so the 1 key reward and 3 important warning signs (1 is major!) might shift how you see the risk reward balance

National Grid (LSE:NG.)

Overview: National Grid is a large UK headquartered utility that owns and operates electricity and gas networks across England and Wales, parts of the Midlands and Southwest, and the U.S. states of New York and New England, helping keep power and heating flowing for households, businesses, and data centers.

Operations: National Grid generates most of its revenue from its New York (£7.6b) and New England (£4.2b) networks, with additional contributions from UK Electricity Transmission (£2.9b), UK Electricity Distribution (£1.9b), National Grid Ventures (£1.1b) and smaller activities captured in Others (£97m).

Market Cap: £62.1b

National Grid stands out in an inflation focused market because its regulated networks and long term, inflation linked revenues can provide ballast when higher oil prices and rate uncertainty unsettle other sectors. Massive planned grid investments of around £60b, including U.S. projects like the 2.67 GW Project Kilby serving AI data center demand, support prospects for earnings resilience and dividend visibility, especially as earnings and profit margins have been improving. At the same time, heavy external funding, weak cash flow coverage of dividends, and regulatory processes such as RIIO-T3 mean income investors cannot ignore balance sheet and policy risks. The key question is how these elements stack up when you look past the headline yield and growth guidance.

National Grid’s large grid investment plan and inflation linked revenues could be masking a more complex risk and reward setup, so the 4 key rewards and 2 important warning signs (1 is major!) might be the missing piece in your thesis

The three stocks covered here are just a starting point, because the full Inflation-Protected Dividend Stocks screener surfaced 20 more large caps with similar financial strength and dividend stories that may be worth your time. Use Simply Wall St to identify and analyze companies with the specific catalysts and narratives that matter to you, so you can focus on the highest conviction ideas in this inflation focused theme.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.