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5 Dividend Growth Stocks to Buy on Trump Win & Fed Rate Cut
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Donald Trump’s win and the Fed’s second rate cut this year have brought back the lure for dividend investing. Trump's pro-growth policies are expected to drive inflation higher and dividend-paying stocks can serve as a hedge against inflation. Meanwhile, the Fed cut rates by 25 bps after a 50-bps cut in September. The lower rates have made dividend investing tempting.
While several dividend stocks could provide capital appreciation, zeroing in on 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. Further, dividend-paying securities are major sources of consistent income when returns from the equity market are at risk.
Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market and 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 them quality and promising investments 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 such increases are 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.
As a result, picking dividend growth stocks appears as a winning strategy when some other parameters are also included.
5-Year Historical Dividend Growth greater than zero: This selects stocks with a solid dividend growth history.
5-Year Historical Sales Growth greater than zero: This represents stocks with a strong record of growing revenues.
5-Year Historical EPS Growth greater than zero: This represents stocks with a solid earnings growth history.
Next 3-5 Year EPS Growth Rate greater than zero: This represents the rate at which a company’s earnings are expected to grow. Improving earnings should help companies sustain dividend payments.
Price/Cash Flow less than M-Industry: A ratio less than M-industry indicates that the stock is undervalued in that industry and that an investor needs to pay less for better cash flow generated by the company.
52-Week Price Change greater than S&P 500 (Market Weight): This ensures that the stock appreciated more than the S&P 500 over the past year.
Top Zacks Rank: Stocks having a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally outperform their peers in all types of market environments.
Growth Score of B or better: Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Just these few criteria narrowed down the universe from over 7,700 stocks to just 11.
Here are five of the 11 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 saw a solid earnings estimate of 80 cents over the past 30 days for the fiscal year ending in August 2025 and has an estimated growth rate of 4.8%.
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 has an estimated earnings growth rate of 9.91% for the fiscal year ending January 2025 and delivered an average earnings surprise of 6.89% in the last four reported quarters.
Presently, WMT has a Zacks Rank #2 and a Growth Score of A.
Delaware-based Leidos Holdings is a global science and technology leader that serves the defense, intelligence, civil and health markets. It saw a solid earnings estimate of 50 cents over the past 30 days for this year and has an estimated earnings growth rate of 29.4%.
Leidos Holdings carries a Zacks Rank #1 and has a Growth Score of A.
Delaware-based InterDigital is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. IDCC saw a negative earnings estimate of a penny over the past 30 days for this year. It has an estimated earnings growth rate of 12.2%
InterDigital has a Zacks Rank #1 and a Growth Score of A.
California-based ResMed holds a major position as a designer, manufacturer, as well as a distributor of generators, masks and related accessories for the treatment of sleep-disordered breathing and other respiratory disorders worldwide. The stock saw a positive earnings estimate revision of 20 cents over the past 30 days for the fiscal year (ending June 2025) and has an estimated earnings growth rate of 19.4%.
ResMed has a Zacks Rank #2 and a Growth Score of A.
You can get the remaining 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.
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5 Dividend Growth Stocks to Buy on Trump Win & Fed Rate Cut
Donald Trump’s win and the Fed’s second rate cut this year have brought back the lure for dividend investing. Trump's pro-growth policies are expected to drive inflation higher and dividend-paying stocks can serve as a hedge against inflation. Meanwhile, the Fed cut rates by 25 bps after a 50-bps cut in September. The lower rates have made dividend investing tempting.
While several dividend stocks could provide capital appreciation, zeroing in on 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. Further, dividend-paying securities are major sources of consistent income when returns from the equity market are at risk.
We have selected five dividend growth stocks — Greenbrier Companies Inc. (GBX - Free Report) , Walmart Inc. (WMT - Free Report) , Leidos Holdings Inc. (LDOS - Free Report) , InterDigital, Inc. (IDCC - Free Report) and ResMed Inc. (RMD - Free Report) — that could be compelling picks.
Why Dividend Growth?
Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market and 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 them quality and promising investments 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 such increases are 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.
As a result, picking dividend growth stocks appears as a winning strategy when some other parameters are also included.
5-Year Historical Dividend Growth greater than zero: This selects stocks with a solid dividend growth history.
5-Year Historical Sales Growth greater than zero: This represents stocks with a strong record of growing revenues.
5-Year Historical EPS Growth greater than zero: This represents stocks with a solid earnings growth history.
Next 3-5 Year EPS Growth Rate greater than zero: This represents the rate at which a company’s earnings are expected to grow. Improving earnings should help companies sustain dividend payments.
Price/Cash Flow less than M-Industry: A ratio less than M-industry indicates that the stock is undervalued in that industry and that an investor needs to pay less for better cash flow generated by the company.
52-Week Price Change greater than S&P 500 (Market Weight): This ensures that the stock appreciated more than the S&P 500 over the past year.
Top Zacks Rank: Stocks having a Zacks Rank #1 (Strong Buy) or 2 (Buy) generally outperform their peers in all types of market environments.
Growth Score of B or better: Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.
Just these few criteria narrowed down the universe from over 7,700 stocks to just 11.
Here are five of the 11 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 saw a solid earnings estimate of 80 cents over the past 30 days for the fiscal year ending in August 2025 and has an estimated growth rate of 4.8%.
Greenbrier currently has a Zacks Rank #1 and a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
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 has an estimated earnings growth rate of 9.91% for the fiscal year ending January 2025 and delivered an average earnings surprise of 6.89% in the last four reported quarters.
Presently, WMT has a Zacks Rank #2 and a Growth Score of A.
Delaware-based Leidos Holdings is a global science and technology leader that serves the defense, intelligence, civil and health markets. It saw a solid earnings estimate of 50 cents over the past 30 days for this year and has an estimated earnings growth rate of 29.4%.
Leidos Holdings carries a Zacks Rank #1 and has a Growth Score of A.
Delaware-based InterDigital is a pioneer in advanced mobile technologies that enable wireless communications and capabilities. The company engages in designing and developing a wide range of advanced technology solutions, which are used in digital cellular as well as wireless 3G, 4G and IEEE 802-related products and networks. IDCC saw a negative earnings estimate of a penny over the past 30 days for this year. It has an estimated earnings growth rate of 12.2%
InterDigital has a Zacks Rank #1 and a Growth Score of A.
California-based ResMed holds a major position as a designer, manufacturer, as well as a distributor of generators, masks and related accessories for the treatment of sleep-disordered breathing and other respiratory disorders worldwide. The stock saw a positive earnings estimate revision of 20 cents over the past 30 days for the fiscal year (ending June 2025) and has an estimated earnings growth rate of 19.4%.
ResMed has a Zacks Rank #2 and a Growth Score of A.
You can get the remaining 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.
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.