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5 Top Dividend Growth Stocks To Buy Amid Market Turmoil

By Zacks Investment ResearchStock MarketsApr 01, 2018 09:31PM ET
www.investing.com/analysis/5-top-dividend-growth-stocks-to-buy-amid-market-turmoil-200302332
5 Top Dividend Growth Stocks To Buy Amid Market Turmoil
By Zacks Investment Research   |  Apr 01, 2018 09:31PM ET
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In volatile markets, investors look for both growth and income in their portfolios. This can be achieved by zeroing in on companies that not only pay dividends but also have been consistently increasing their payout.

Why Dividend Growth?

Stocks that have a history of enhancing shareholder returns through consistent dividend hikes make an investor’s portfolio immune to large swings in stock prices in turbulent times, and thus act as a hedge against economic or political uncertainty. Simultaneously, these offer outsized payouts or sizable yields on a regular basis irrespective of the market direction.

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 greater scope of capital appreciation as opposed to 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.

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) and 2 (Buy) generally outperform their peers in all types of market environment.

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.

Here are five of the 11 stocks that fit the bill:

Delaware-based Chemours Company (NYSE:CC) provides performance chemicals in North America, the Asia Pacific, Europe, the Middle East, Africa, and Latin America. The company has seen positive earnings estimate revision of 7 cents over the past 30 days for this year and has an expected earnings growth rate of 40.58%. The stock 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.

California-based Activision Blizzard Inc. (NASDAQ:ATVI) is a worldwide pure-play online and console game publisher with leading market positions across all categories of the rapidly growing interactive entertainment software industry. The stock saw positive earnings estimate revision of a penny over the past 90 days for this year with an estimated earnings growth of 15.79%. It has a Zacks Rank #2 and a Growth Score of B.

Illinois-based Jones Lang LaSalle Inc. (NYSE:JLL) is a full-service real estate firm that provides management services, corporate and financial services and investment management services to corporations and other real estate owners, users and investors worldwide. The company has seen solid earnings estimate revision of 10 cents over the past 30 days for this year and has an expected earnings growth rate of 8.62%. The stock has a Zacks Rank #2 and a Growth Score of A.

California-based Avery Dennison Corporation (NYSE:AVY) is a global leader in pressure-sensitive label and functional materials and labeling solutions for apparel. The company has an estimated earnings growth rate of 17.60% for this year and has delivered an average positive earnings surprise of 6.84% in the past four quarters. The stock has a Zacks Rank #2 and a Growth Score of A.

California-based Applied Materials Inc. (NASDAQ:AMAT) provides manufacturing equipment, services, and software to the semiconductor, display, and related industries worldwide. The company has seen positive earnings estimate revision of a couple of cents over the past 30 days for the fiscal year (ending October 2018) and has an expected earnings growth rate of 35.69%. It has a Zacks Rank #1 and a Growth Score of A.

You can get the rest of the 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.

Zacks Restaurant Recommendations: In addition to dining at these special places, you can feast on their stock shares. A Zacks Special Report spotlights 5 recent IPOs to watch plus 2 stocks that offer immediate promise in a booming sector. Download it free »



Chemours Company (The) (CC): Free Stock Analysis Report

Avery Dennison Corporation (AVY): Free Stock Analysis Report

Jones Lang LaSalle Incorporated (JLL): Free Stock Analysis Report

Activision Blizzard, Inc (ATVI): Free Stock Analysis Report

Applied Materials, Inc. (AMAT): Free Stock Analysis Report

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5 Top Dividend Growth Stocks To Buy Amid Market Turmoil
 

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5 Top Dividend Growth Stocks To Buy Amid Market Turmoil

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