5 Solid Dividend Growth Stocks to Buy Amid Market Volatility

Core Viewpoint - Amid market volatility, investors are increasingly turning to dividend investing for stable and consistent returns, with a focus on dividend growth stocks that provide both income and potential capital appreciation [1][2]. Dividend Growth Strategy - Dividend growth stocks are typically from mature companies that are less affected by market fluctuations, serving as a hedge against economic and political uncertainties [2]. - These stocks exhibit strong fundamentals, including sustainable business models, profitability, rising cash flows, good liquidity, and strong balance sheets, making them promising long-term investments [2]. - Although they may not have the highest yields, dividend growth stocks have historically outperformed the broader market and other dividend-paying stocks [2]. Selection Criteria for Dividend Growth Stocks - Stocks must have a 5-Year Historical Dividend Growth greater than zero, indicating a solid dividend growth history [3]. - A 5-Year Historical Sales Growth greater than zero is required, reflecting strong revenue growth [3]. - A 5-Year Historical EPS Growth greater than zero is necessary, indicating solid earnings growth [3]. - Expected Next 3-5 Year EPS Growth Rate must be greater than zero, suggesting improving earnings to sustain dividend payments [3]. - Price/Cash Flow ratio must be less than the industry average, indicating undervaluation [3]. - 52-Week Price Change must exceed that of the S&P 500, ensuring better appreciation over the past year [4]. - Stocks should have a Top Zacks Rank of 1 (Strong Buy) or 2 (Buy) to outperform peers [4]. - A Growth Score of B or better is preferred, as it indicates better upside potential when combined with a strong Zacks Rank [4]. Selected Dividend Growth Stocks - Arcos Dorados Holdings Inc. (ARCO): Operates as a franchisee of McDonald's in Latin America, with an average earnings surprise of 28.26% and an estimated earnings growth rate of 15.5% for the year [4][5]. - Parker-Hannifin Corporation (PH): A diversified manufacturer of motion and control technologies, with a positive earnings estimate revision of 4 cents and an estimated earnings growth rate of 7.8% [5]. - Vertiv Holdings Co (VRT): Provides digital infrastructure solutions, with a positive earnings estimate revision of 1 cent and an estimated earnings growth rate of 27.6% [6]. - Cboe Global Markets (CBOE): A leading stock exchange operator, with a positive earnings estimate revision of 15 cents and an estimated earnings growth rate of 6.2% [6]. - Installed Building Products Inc. (IBP): Operates as a residential insulation installer, with an estimated earnings growth rate of 7.2% and an average earnings surprise of 7.27% [7].