Major indexes have remained volatile over the past couple of weeks to begin a tricky September. Soft economic data released last week raised fresh concerns over the economy’s health.  This has been taking a toll on stocks.

The Federal Reserve is expected to begin its rate cuts this month but volatility could continue in the coming weeks. Also, September has historically been one of the worst months for stocks. Given this situation, cautious investors looking for a steady income and preservation of their capital may want to continue holding or buying dividend-paying stocks. Four such stocks are Virco Mfg. Corporation (VIRC Quick QuoteVIRC - Free Report) , Brady Corporation (BRC Quick QuoteBRC - Free Report) , Broadcom Inc. (AVGO Quick QuoteAVGO - Free Report) and Verizon Communications Inc. (VZ Quick QuoteVZ - Free Report) .

Weak Economic Data Dampen Stock Performance

Markets made a solid rebound in August after an early selloff triggered by fears of a softening economy. However, the fears were reignited last week following the release of a softer-than-expected August jobs data.

Private payrolls rose by only 142,000 in August, lower than the consensus estimate of an increase of 161,000. Although the unemployment rate fell to 4.2% in August after increasing to 4.3% in July, concerns have grown over a cooling labor market.

Also, the manufacturing sector has continued to struggle. The Institute of Supply Management (ISM) manufacturing index declined for the fifth straight month in August.

This saw all three major indexes taking a hit last week. The S&P 500 declined 4.3% for the week to record its worst week since March 2023. The Nasdaq ended the week 5.8% lower, its worst weekly performance since 2022, while the Dow closed 2.9% lower.

Rate Cuts Coming But Uncertainty Remains

Inflation has declined substantially over the past few months, with the Federal Reserve finally set to start its easing cycle. Market participants are confident that the Fed will cut rates by 25 basis points in its FOMC meeting scheduled Sept. 17-18. Many are even hopeful about a 50-basis point rate cut.

However, the Federal Reserve hasn’t signaled anything about the extent of the interest rate cut. Also, the nation is less than two months away from the Presidential election, which will take place on Nov. 5.

Markets have historically remained volatile in the two months leading to the Presidential election. The S&P 500 has suffered during this time since 2008, with an average negative return of 5.8%.

September has historically been the toughest  month for Wall Street, with stocks often lagging. Since 1950, the S&P 500 has seen its worst performance in September. Experts attribute this to investors returning from summer vacations and making adjustments to their portfolios, which usually leads to selling and puts downward pressure on the markets.

Dividend Stocks That Recently Announced Hikes

Given this situation, it would thus be ideal to invest in dividend stocks. These companies, with their solid operations, consistently deliver dividends and stay profitable thanks to their dependable business models. In a market with high volatility, companies that provide substantial dividend payouts often perform better than those that do not offer dividends.

Virco Mfg. Corporation

Virco Mfg. Corporation designs, produces and distributes quality furniture for the contract and education markets worldwide. Examples of facilities served by VIRC include public and private schools, colleges and universities, convention centers, federal and state institutions, churches and other businesses. Virco Mfg has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On Monday, Virco Mfg announced that its shareholders would receive a dividend of $0.03 a share on Oct. 11, 2024. VIRC has a dividend yield of 0.61%. Over the past five years, Virco Mfg has increased its dividend two times, and its payout ratio at present sits at 5% of earnings.Check Virco Mfg’s dividend history here.

Brady Corporation

Brady Corporation is a world leader in complete identification solutions that help companies improve productivity, performance, safety and security. BRC’s products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Brady Corporation carries a Zacks Rank #2 (Buy).

On Sept. 5, Brady Corporation declared that its shareholders would receive a dividend of $0.24 a share on Oct. 31, 2024. BRC has a dividend yield of 1.29%. Over the past five years, Brady Corporation has increased its dividend six times, and its payout ratio at present sits at 22% of earnings. Check Brady Corporation’s dividend history here.

Broadcom Inc.

Broadcom Inc. is a premier designer, developer and global supplier of a broad range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor-based devices and products based on analog III-V.

AVGO’s semiconductor solutions are used in end products such as enterprise and data center networking, home connectivity, set-top boxes, broadband access, telecommunication equipment, smartphones and base stations, data center servers and storage systems, factory automation, power generation and alternative energy systems, and electronic displays. Broadcom has a Zacks Rank #3.

On Sept. 5, Broadcom announced that its shareholders would receive a dividend of $0.53 a share on Sept. 30. AVGO has a dividend yield of 1.49%. Over the past five years, Broadcom has increased its dividend six times, and its payout ratio at present sits at 56% of earnings. Check Broadcom’s dividend history here.

Verizon Communications Inc

Verizon Communications Inc. offers communication services in the form of local phone service, long distance, wireless and data services. VZ has a Zacks Rank #3.

On Sept. 4, Verizon Communications announced that its shareholders would receive a dividend of $0.68 a share on Nov. 1. VZ has a dividend yield of 6.23%. Over the past five years, Verizon Communications has increased its dividend six times, and its payout ratio at present sits at 58% of earnings. Check Verizon Communications’ dividend history here.