Yahoo Finance Zacks.com featured highlights include Caterpillar, Applied Materials, Toll Brothers, Walmart and Dr. Reddy's Laboratories
For Immediate Release
Chicago, IL – August 29, 2023 – Stocks in this week’s article are Caterpillar Inc. CAT, Applied Materials Inc. AMAT, Toll Brothers TOL, Walmart Inc. WMT and Dr. Reddy's Laboratories RDY.
5 Dividend Growth Stocks to Buy in a Weak Market
Wall Street has lost momentum since the start of August, triggered by a series of bank downgrades and fears of higher rates for a longer-than-expected period. As markets navigate the typical end-of-summer lull, investors are increasingly exploring strategies that help to protect their portfolios from downside risk.
As such, investors are looking for safe and defensive bets, thus raising the appeal for dividend investing. In fact, applying some smart-beta strategies to the dividend investing world could fetch higher returns. This is because the strategy helps to capture market inefficiencies in a transparent way by adding extra metrics like volatility, revenues, earnings, momentum and other fundamental factors to the market cap or rules-based indices. And nothing seems better than picking the dividend growth strategy.
We have selected five dividend growth stocks — Caterpillar Inc., Applied Materials Inc., Toll Brothers, Walmart Inc. and Dr. Reddy's Laboratories — that could be solid choices for your portfolio.
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 thus 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 a 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 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.
Here are five of the 16 stocks that fit the bill:
Illinois-based Caterpillar is the largest global construction and mining equipment manufacturer. The company saw a solid earnings estimate revision of $1.87 over the past 30 days for this year and has an estimated growth rate of 43.1%.
Caterpillar has a Zacks Rank #1 and a Growth Score of B. You can see the complete list of today's Zacks #1 Rank stocks here.
California-based Applied Materials is one of the world's largest suppliers of equipment for the fabrication of semiconductor, flat panel liquid crystal displays (LCDs), and solar photovoltaic (PV) cells and modules. The company saw a positive earnings estimate revision of 45 cents over the past 30 days for the fiscal year ending October 2023. It has an estimated growth rate of 1.17%.
Applied Materials has a Zacks Rank #1 and Growth Score of B.
Pennsylvania-based Toll Brothers builds single-family detached and attached home communities, master-planned luxury residential resort-style golf communities, and urban low, mid, and high-rise communities, principally on the land it develops and improves. TOL saw solid earnings estimate revision of 98 cents over the past 30 days for the fiscal year (ending October 2023) and has an expected earnings growth rate of 16.6%
Toll Brothers has a Zacks Rank #1 and a Growth Score of B.
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 saw a positive earnings estimate revision of 20 cents over the past 30 days for the fiscal year ending January 2024. It has an estimated growth rate of 2.07%.
Presently, WMT has a Zacks Rank #2 and a Growth Score of A.
India-based Dr. Reddy's is an integrated global pharmaceutical company engaged in providing affordable and innovative medicines since 1984. The company saw a solid earnings estimate revision of 21 cents over the past 30 days for the fiscal year ending March 2024 and has an estimated earnings growth rate of 13.3%.
At present, RDY has a Zacks Rank #1 and a Growth Score of B.
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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/2141200/5-dividend-growth-stocks-to-buy-in-a-weak-market
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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Dr. Reddy's Laboratories Ltd (RDY) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
Applied Materials, Inc. (AMAT) : Free Stock Analysis Report
Toll Brothers Inc. (TOL) : Free Stock Analysis Report
