Yahoo Finance Zacks.com featured highlights include Microchip Technology, Caterpillar, Xcel Energy, Cardinal Health and Archer-Daniels-Midland
For Immediate Release
Chicago, IL – February 17, 2023 – Stocks in this week’s article are Microchip Technology Inc. MCHP, Caterpillar Inc. CAT, Xcel Energy Inc. XEL, Cardinal Health Inc. CAH and Archer-Daniels-Midland Co. ADM.
5 Dividend Growth Stocks to Buy Amid Market Volatility
After a strong comeback from last year's steep losses, the U.S. stocks lost momentum lately on uncertain Fed rate hike plans and recession fears. This has raised the appeal of dividend investing once again. 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.
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 — Microchip Technology Inc., Caterpillar Inc., Xcel Energy Inc., Cardinal Health Inc. and Archer-Daniels-Midland Co. — that could be compelling picks amid market volatility.
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 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 dividend increase is likely in the future.
Moreover, a history of dividend growth year over year leads to a healthy portfolio with a greater scope of capital appreciation than simple dividend-paying stocks or those with high yields. 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 32 stocks that fit the bill:
Arizona-based Microchip Technology is engaged in developing and manufacturing of microcontrollers, memory and analog and interface products for embedded control systems, which are small, low-power computers designed to perform specific tasks. The company has seen a positive earnings estimate revision of 7 cents for the fiscal year (ending March 2023) over the past month and has an expected earnings growth rate of 29.9%. You can see the complete list of today's Zacks #1 Rank stocks here.
Microchip Technology has a Zacks Rank #1 and a Growth Score of A.
Illinois-based Caterpillar is the largest global construction and mining equipment manufacturer. The company saw a positive earnings estimate revision of 32 cents over the past 30 days for this year, with an expected earnings growth rate of 12.8%.
Caterpillar has a Zacks Rank #2 and Growth Score of A.
Minnesota-based Xcel Energy is a holding company with subsidiaries engaged primarily in the utility business. The company saw a positive earnings estimate revision of a penny over the past 30 days for this year, with an expected earnings growth rate of 6.31%.
Xcel Energy has a Zacks Rank #2 and a Growth Score of B.
Ohio-based Cardinal Health is a nation-wide drug distributor and provider of services to pharmacies, healthcare providers and manufacturers. The company saw a positive earnings estimate revision of 12 cents over the past 30 days for the fiscal year (ending June 2023) with an expected earnings growth rate of 6.7%.
Cardinal Health has a Zacks Rank #2 and a Growth Score of A.
Illinois-based Archer-Daniels is one of the leading producers of food and beverage ingredients as well as goods made from various agricultural products. ADM saw a solid earnings estimate revision of 36 cents over the past 30 days for this year and delivered an average trailing four-quarter earnings surprise of 28.07%.
Archer-Daniels has a Zacks Rank #1 and a Growth Score of A.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2055124/5-dividend-growth-stocks-to-buy-amid-market-volatility
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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Xcel Energy Inc. (XEL) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
Cardinal Health, Inc. (CAH) : Free Stock Analysis Report
Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report
