ZACKSยท2025-10-27 14:50Economic Overview - The U.S. inflation rate has reached 3% in September, the highest level since January, with consumer prices rising by 0.3% in that month, up from an annual rate of 2.9% [1][9]. Investment Opportunities - Amid rising inflation, dividend growth stocks present a favorable investment option as their increasing payouts can help maintain purchasing power [2][9]. - Companies with a strong history of dividend growth tend to have robust financial health, providing a defensive hedge against economic uncertainty [4][5]. Selected Dividend Growth Stocks - Five dividend growth stocks identified as solid investment choices include: - Vertiv (VRT): Expected revenue growth of 27.5% for 2025, long-term earnings growth rate of 30%, and an annual dividend yield of 0.08% [10][11]. - Taiwan Semiconductor (TSM): Projected revenue growth of 33.8% for 2025, long-term earnings growth rate of 29.2%, and an annual dividend yield of 0.88% [11]. - Oracle (ORCL): Anticipated revenue growth of 16.5% for fiscal 2026, long-term earnings growth rate of 17.2%, and an annual dividend yield of 0.71% [12]. - Lam Research (LRCX): Expected revenue growth of 11.9% for fiscal 2026, long-term earnings growth rate of 19.6%, and an annual dividend yield of 0.69% [13]. - Elbit Systems (ESLT): Projected revenue growth of 16.4% for 2025, long-term earnings growth rate of 23.3%, and an annual dividend yield of 0.51% [14]. Investment Criteria - Stocks selected for their strong fundamentals include criteria such as: - Positive 5-Year Historical Dividend Growth, Sales Growth, and EPS Growth [6][7]. - Price/Cash Flow ratio less than the industry average, indicating undervaluation [8]. - 52-Week Price Change greater than the S&P 500, ensuring better performance over the past year [8].