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4 Stocks to Watch on Recent Dividend Hike Announcements

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Tech stocks, which primarily drove the market rally this year, have been taking a hit lately, with volatility returning to Wall Street. All three major indexes that hit multiple record highs this year have retreated over the past couple of weeks.

Investors have been rotating out of mega-cap tech stocks and placing their bets on small-cap and cyclical stocks that they believe will benefit from the Federal Reserve’s rate cuts.

Investors are optimistic that the Federal Reserve could soon start its rate-cut cycle following the release of a series of positive economic data, which showed that inflation decreased over the past two months. Also, the labor market is finally showing signs of cooling, which will give the Fed further confidence to go ahead with its rate cut plans.

The Federal Reserve started its two-day policy meeting on Jul 30, with investors expecting Chair Jerome Powell to give a clear picture of the timing and the number of rate cuts expected this year.

The Fed said last month that it sees only one 25 basis point rate cut this year, which is sharply lower than three projected in March. However, positive economic data has raised hopes that there could be multiple rate cuts this year.

However, the picture remains unclear, and with higher interest rates for a longer period, markets can remain volatile for a longer period.

Stocks to Watch

Investors looking for consistent income and protection of their capital should thus consider investing in dividend stocks. These companies have stable operations, consistently distribute dividends and remain profitable because of their dependable business models. In fluctuating markets, stocks with high dividends generally outperform those without dividends.

Four such stocks are Howmet Aerospace Inc. (HWM - Free Report) , NatWest Group plc (NWG - Free Report) , 1st Source Corporation (SRCE - Free Report) and Kellanova (K - Free Report) .

Howmet Aerospace provides engineered solutions for customers in the transportation and aerospace (both defense and commercial) industries. Notably, HWM offers forged wheels for commercial use in the transportation industry. Howmet Aerospacealso provides aerospace fastening systems, components used in jet engines and structural parts made of titanium used in defense and aerospace applications. HWM has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On Jul 30, Howmet Aerospace declared that its shareholders would receive a dividend of $0.08 a share on Aug 26, 2024. HWM has a dividend yield of 0.24%. Over the past five years, Howmet Aerospace has increased its dividend four times, and its payout ratio at present sits at 10% of earnings. Check Howmet Aerospace’s dividend history here.

NatWest Group operates as a banking and financial services company. NWG provides personal and business banking, consumer loans, asset and invoice finances, commercial and residential mortgages, credit cards and financial planning services, as well as life, personal and income protection insurance. Natwest Group sports a Zacks Rank #1.

On Jul 26, NatWest Group announced that its shareholders would receive a dividend of $0.15 a share on Sep 13, 2024. NWG has a dividend yield of 5.90%. Over the past five years, NatWest Grouphas increased its dividend six times, and its payout ratio at present sits at 47% of earnings. Check NatWest Group’s dividend history here.

1st Source is a bank holding company engaged in general banking business. SRCE offers a broad range of commercial banking, personal banking and trust services. 1st Source carries a Zacks Rank #3.

On Jul 25, 1st Source declared that its shareholders would receive a dividend of $0.36 a share on Aug 15, 2024. SRCE has a dividend yield of 2.14%. Over the past five years, 1st Source Corporationhas increased its dividend seven times, and its payout ratio at present sits at 26% of earnings. Check 1st Source Corporation’s dividend history here.

Kellanova provides snacking, cereal and noodles, as well as frozen foods. K’s brands include Pringles (R), Cheez-It(R), Pop-Tarts(R), Kellogg's Rice Krispies Treats(R), RXBAR(R), Eggo(R), MorningStar Farms(R), Special K(R) and Coco Pops(R). Kellanova carries a Zacks Rank #3.

On Jul 26, Kellanova announced that its shareholders would receive a dividend of $0.57 a share on Sep 9, 2024. K has a dividend yield of 3.92%. Over the past five years, Kellanova has increased its dividend six times, and its payout ratio at present sits at 55% of earnings. Check Kellanova’s dividend history here.

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