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The three major indices are near record highs with all of them touching new milestones last month. However, the rally might take a hit as inflation concerns have resurfaced, pushing back Fed rate cut bets. This has raised the appeal for dividend investing.
Dividend stocks are major sources of consistent income for investors to create wealth when returns from the equity market are at risk, even though these do not offer dramatic price appreciation. Dividend-paying stocks can also serve as a hedge against inflation.
In fact, stocks with a strong history of year-over-year dividend growth form a healthy portfolio with a greater scope of capital appreciation as opposed to simple dividend-paying stocks or those that have high yields. We have selected five dividend growth stocks — The Greenbrier Companies Inc., Gen Digital Inc., Leidos Holdings Inc., Cabot Corp. and Brady Corp. — that could be solid choices for your portfolio.
Why Dividend Growth 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 seven stocks that fit the bill:
Oregon-based Greenbrier is a leading supplier of transportation equipment and services to the railroad and related industries. The company has an estimated growth rate of 42.4% for the fiscal year (ending August 2024). It delivered an average earnings surprise of 32.96% in the past four quarters.
Arizona-based Gen Digital is one of the leading providers of cybersecurity solutions. The company is known for some of the popular brands in security and utilities, including Norton Anti-Virus, Norton Internet Security and Norton System Works. Gen Digital has an estimated earnings growth rate of 14.3% for the fiscal year (ending March 2025) and delivered an average earnings surprise of 0.52% in the last four quarters.
Gen Digital has a Zacks Rank #2 and a Growth Score of B.
Delaware-based Leidos Holdings is a global science and technology leader that serves the defense, intelligence, civil and health markets. The stock saw a positive earnings estimate revision of 39 cents over the past 30 days for this year. The expected earnings growth rate is 14.7%.
Leidos Holdings has a Zacks Rank #1 and a Growth Score of B.
Morocco-based Cabot is a leading global specialty chemicals and performance materials company. The company offers a broad range of products and solutions, catering to major industries such as transportation, infrastructure, environment and consumer. Cabot saw a positive earnings estimate revision of 20 cents over the past 30 days for the fiscal year (ending September 2024), with an expected earnings growth rate of 26.02%.
Cabot has a Zacks Rank #2 and a Growth Score of A.
Wisconsin-based Brady Corporation is a world leader in complete identification solutions that help companies improve productivity, performance, safety and security. Brady's products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. The company saw a positive earnings estimate revision of 13 cents over the past 30 days for the fiscal year (ending July 2024) with an expected earnings growth rate of 13.5%.
Brady Corporation 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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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/performancefor information about the performance numbers displayed in this press release.
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Zacks.com featured highlights include The Greenbrier, Gen Digital, Leidos, Cabot and Brady
For Immediate Release
Chicago, IL – June 5, 2024 – Stocks in this week’s article are The Greenbrier Companies Inc. (GBX - Free Report) , Gen Digital Inc. (GEN - Free Report) , Leidos Holdings Inc. (LDOS - Free Report) , Cabot Corp. (CBT - Free Report) and Brady Corp. (BRC - Free Report) .
5 Top-Ranked Dividend Growth Stocks to Buy
The three major indices are near record highs with all of them touching new milestones last month. However, the rally might take a hit as inflation concerns have resurfaced, pushing back Fed rate cut bets. This has raised the appeal for dividend investing.
Dividend stocks are major sources of consistent income for investors to create wealth when returns from the equity market are at risk, even though these do not offer dramatic price appreciation. Dividend-paying stocks can also serve as a hedge against inflation.
In fact, stocks with a strong history of year-over-year dividend growth form a healthy portfolio with a greater scope of capital appreciation as opposed to simple dividend-paying stocks or those that have high yields. We have selected five dividend growth stocks — The Greenbrier Companies Inc., Gen Digital Inc., Leidos Holdings Inc., Cabot Corp. and Brady Corp. — that could be solid choices for your portfolio.
Why Dividend Growth 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 seven stocks that fit the bill:
Oregon-based Greenbrier is a leading supplier of transportation equipment and services to the railroad and related industries. The company has an estimated growth rate of 42.4% for the fiscal year (ending August 2024). It delivered an average earnings surprise of 32.96% in the past four quarters.
Greenbrier 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.
Arizona-based Gen Digital is one of the leading providers of cybersecurity solutions. The company is known for some of the popular brands in security and utilities, including Norton Anti-Virus, Norton Internet Security and Norton System Works. Gen Digital has an estimated earnings growth rate of 14.3% for the fiscal year (ending March 2025) and delivered an average earnings surprise of 0.52% in the last four quarters.
Gen Digital has a Zacks Rank #2 and a Growth Score of B.
Delaware-based Leidos Holdings is a global science and technology leader that serves the defense, intelligence, civil and health markets. The stock saw a positive earnings estimate revision of 39 cents over the past 30 days for this year. The expected earnings growth rate is 14.7%.
Leidos Holdings has a Zacks Rank #1 and a Growth Score of B.
Morocco-based Cabot is a leading global specialty chemicals and performance materials company. The company offers a broad range of products and solutions, catering to major industries such as transportation, infrastructure, environment and consumer. Cabot saw a positive earnings estimate revision of 20 cents over the past 30 days for the fiscal year (ending September 2024), with an expected earnings growth rate of 26.02%.
Cabot has a Zacks Rank #2 and a Growth Score of A.
Wisconsin-based Brady Corporation is a world leader in complete identification solutions that help companies improve productivity, performance, safety and security. Brady's products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. The company saw a positive earnings estimate revision of 13 cents over the past 30 days for the fiscal year (ending July 2024) with an expected earnings growth rate of 13.5%.
Brady Corporation 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/2283129/5-top-ranked-dividend-growth-stocks-to-buy
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.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Contact: Jim Giaquinto
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Visit: https://www.zacks.com/
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/performancefor information about the performance numbers displayed in this press release.