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5 Dividend Growth Stocks for Steady Returns in Uncertain Times
Wall Street has been shaky in recent weeks due to a weakening Chinese economy and fears of higher rates for a longer-than-expected period. Against such a backdrop, investors are increasingly exploring strategies that will help them to protect their portfolios from downside risk. And nothing seems better than the strategy of dividend investing.
Picking stocks with a history of dividend growth leads to a healthy portfolio with a greater scope of capital appreciation as opposed to simple dividend-paying stocks or those with high yields. We have selected five dividend growth stocks — Caterpillar Inc., KB Home, Walmart Inc., Dr. Reddy’s Laboratories and FedEx Corp. — that could be solid choices amid market volatility.
Peeping Into the Strategy
Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market, and thus act as a hedge against economic or political uncertainty as well as stock market volatility. At the same time, these offer downside protection with their consistent increase in payouts.
Additionally, these stocks have superior fundamentals that make dividend growth a quality and promising investment for the long term. These include a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. Further, a history of strong dividend growth indicates that a dividend increase is likely in the future.
Although these stocks do not necessarily have the highest yields, they have outperformed for a longer period than the broader stock market or any other dividend-paying stock.
Here are five of the 16 stocks that fit the bill:
Illinois-based Caterpillar is the largest global construction and mining equipment manufacturer. The company saw a solid earnings estimate revision of 21 cents over the past 30 days for this year and has an estimated growth rate of 43.2%.
California-based KB Home is a well-known homebuilder in the United States and one of the largest in the state. The company saw a solid earnings estimate revision of 14 cents over the past 60 days for the fiscal year ending November 2023. It delivered an average earnings surprise of 20.66% for the past four quarters.
KB Home has a Zacks Rank #2 and a Growth Score of A.
Arkansas-based Walmart has evolved from being just a traditional brick-and-mortar retailer into an omnichannel player. It is engaged in the operation of retail, wholesale and other units worldwide. The company saw a positive earnings estimate revision of 19 cents over the past 30 days for the fiscal year ending January 2024. It has an estimated growth rate of 2.07%.
Presently, WMT has a Zacks Rank #2 and a Growth Score of A.
India-based Dr. Reddy’s Laboratories is an integrated global pharmaceutical company engaged in providing affordable and innovative medicines since 1984. The company saw a solid earnings estimate revision of 5 cents over the past seven days for the fiscal year ending March 2024. It has an estimated earnings growth rate of 14.85%.
At present, RDY has a Zacks Rank #1 and a Growth Score of B.
Tennessee-based FedEx is the leader in global express delivery services. It provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managing collaboratively under the FedEx brand. FedEx has seen upward earnings estimate revision of 7 cents over the past seven days for the fiscal year (ending May 2024) and has an estimated earnings growth rate of 16.1%.
FDX has a Zacks Rank #2 and a Growth Score of B.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks.com featured highlights Caterpillar, KB Home, Walmart, Dr. Reddy's Laboratories and FedEx
For Immediate Release
Chicago, IL – September 13, 2023 – Stocks in this week’s article are Caterpillar Inc. (CAT - Free Report) , KB Home (KBH - Free Report) , Walmart Inc. (WMT - Free Report) , Dr. Reddy’s Laboratories (RDY - Free Report) and FedEx Corp. (FDX - Free Report) .
5 Dividend Growth Stocks for Steady Returns in Uncertain Times
Wall Street has been shaky in recent weeks due to a weakening Chinese economy and fears of higher rates for a longer-than-expected period. Against such a backdrop, investors are increasingly exploring strategies that will help them to protect their portfolios from downside risk. And nothing seems better than the strategy of dividend investing.
Picking stocks with a history of dividend growth leads to a healthy portfolio with a greater scope of capital appreciation as opposed to simple dividend-paying stocks or those with high yields. We have selected five dividend growth stocks — Caterpillar Inc., KB Home, Walmart Inc., Dr. Reddy’s Laboratories and FedEx Corp. — that could be solid choices amid market volatility.
Peeping Into the Strategy
Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market, and thus act as a hedge against economic or political uncertainty as well as stock market volatility. At the same time, these offer downside protection with their consistent increase in payouts.
Additionally, these stocks have superior fundamentals that make dividend growth a quality and promising investment for the long term. These include a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. Further, a history of strong dividend growth indicates that a dividend increase is likely in the future.
Although these stocks do not necessarily have the highest yields, they have outperformed for a longer period than the broader stock market or any other dividend-paying stock.
Here are five of the 16 stocks that fit the bill:
Illinois-based Caterpillar is the largest global construction and mining equipment manufacturer. The company saw a solid earnings estimate revision of 21 cents over the past 30 days for this year and has an estimated growth rate of 43.2%.
Caterpillar has a Zacks Rank #1 and a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
California-based KB Home is a well-known homebuilder in the United States and one of the largest in the state. The company saw a solid earnings estimate revision of 14 cents over the past 60 days for the fiscal year ending November 2023. It delivered an average earnings surprise of 20.66% for the past four quarters.
KB Home has a Zacks Rank #2 and a Growth Score of A.
Arkansas-based Walmart has evolved from being just a traditional brick-and-mortar retailer into an omnichannel player. It is engaged in the operation of retail, wholesale and other units worldwide. The company saw a positive earnings estimate revision of 19 cents over the past 30 days for the fiscal year ending January 2024. It has an estimated growth rate of 2.07%.
Presently, WMT has a Zacks Rank #2 and a Growth Score of A.
India-based Dr. Reddy’s Laboratories is an integrated global pharmaceutical company engaged in providing affordable and innovative medicines since 1984. The company saw a solid earnings estimate revision of 5 cents over the past seven days for the fiscal year ending March 2024. It has an estimated earnings growth rate of 14.85%.
At present, RDY has a Zacks Rank #1 and a Growth Score of B.
Tennessee-based FedEx is the leader in global express delivery services. It provides a broad portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managing collaboratively under the FedEx brand. FedEx has seen upward earnings estimate revision of 7 cents over the past seven days for the fiscal year (ending May 2024) and has an estimated earnings growth rate of 16.1%.
FDX has a Zacks Rank #2 and a Growth Score of B.
You can get the rest of the stocks on this list by signing up now for your 2-week free trial to the Research Wizard and start using this screen in your own trading. Further, you can also create your own strategies and test them first before taking the investment plunge.
The Research Wizard is a great place to begin. It's easy to use. Everything is in plain language. And it's very intuitive. Start your Research Wizard trial today. And the next time you read an economic report, open up the Research Wizard, plug your finds in, and see what gems come out.
Click here to sign up for a free trial to the Research Wizard today.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2147641/5-dividend-growth-stocks-for-steady-returns-in-uncertain-times
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer. Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.