Wall Street started September with severe volatility after a disappointing August. The two-month long summer rally from mid-June to mid-August has evaporated as investors are highly concerned about a recession in the near future.
U.S. stock markets ended in green in just two months, March and July, out of the first eight months of 2022. September is historically known as the worst performing month on Wall Street. This year, the situation is more complicated as the Fed has to do a balancing act between combating inflation and maintaining the economy’s stability.
Per CME FedWatch, at present, 74% of the market respondents are expecting a 75 basis-point rate hike in the September FOMC. Thereafter, there is a 72.3% probability of a rate hike of 50 basis points in the November FOMC and a 71% probability of another 25 basis-point rise in the December FOMC.
In second-quarter 2022, earnings results came in better than expected despite the margin squeeze. However, we are seeing a significant drop in earnings projection for the third quarter. As of Sep 7, our estimate projected 1.4% growth in earnings per share, well below the 7.2% improvement projected on Jul 6.
Stocks to Watch
At this stage, investors should remain cautious and stay invested in dividend-paying stocks to safeguard their portfolios. We believe one should consider stocks that have recently raised their dividend payments. Five such companies are —
Verizon Communications Inc. ( VZ Quick Quote VZ - Free Report) , Stewart Information Services Corp. ( STC Quick Quote STC - Free Report) , Citizens Financial Services Inc. ( CZFS Quick Quote CZFS - Free Report) , Avnet Inc. ( AVT Quick Quote AVT - Free Report) and Brady Corp. ( BRC Quick Quote BRC - Free Report) . Verizon plans to accelerate the availability of the 5G Ultra-Wideband network with C-Band deployment, focusing on 5G mobility, nationwide broadband, mobile edge computing and business solutions. VZ offers various mix-and-match pricing in both wireless and home broadband plans that lead to solid customer additions. The company carries a Zacks Rank #3 (Hold).
On Sep 7, 2022, Verizon declared that its shareholders would receive a dividend of $0.6525 per share on Nov 1, 2022. VZ has a dividend yield of 6.4%. Over the past 5 years, Verizon has increased its dividend six times, and its payout ratio presently stays at 48% of earnings.
Check VZ’s dividend history here. Stewart Information Services is primarily engaged in title insurance. STC issues policies through issuing locations on homes and other real property located in all 50 states, the District of Columbia and several foreign countries. Stewart also sells computer-related services and information, as well as mapping products and geographic information systems to domestic and foreign governments and private entities. The company currently carries a Zacks Rank #3.
On Sep 2, 2022, Stewart declared that its shareholders would receive a dividend of $0.45 per share on Sep 30, 2022. STC has a dividend yield of 3.5%. Over the past 5 years, Stewart has increased its dividend three times, and its payout ratio presently stays at 14% of earnings.
Check STC’s dividend history here. Citizens Financial Services operates as the bank holding company for First Citizens Community Bank that provides various banking products and services for individual, business, governmental, and institutional customers. CZFS presently carries a Zacks Rank #1 (Strong Buy). You can see . the complete list of today’s Zacks #1 Rank stocks here
On Sep 1, 2022, Citizens Financial declared that its shareholders would receive a dividend of $0.48 per share on Sep 30, 2022. CZFS has a dividend yield of 2.3%. Over the past 5 years, Citizens Financial has increased its dividend 15 times, and its payout ratio presently stays at 27% of earnings.
Check CZFS’s dividend history here. Avnet is one of the world’s largest distributors of electronic components and computer products. AVT’s customer base includes original equipment manufacturers, electronic manufacturing services providers, original design manufacturers and value-added resellers. The company carries a Zacks Rank #3 at present.
On Aug 31, 2022, Avnet declared that its shareholders would receive a dividend of $0.29 per share on Sep 28, 2022. AVT has a dividend yield of 2.7%. Over the past 5 years, Avnet has increased its dividend seven times, and its payout ratio presently stays at 15% of earnings.
Check AVT’s dividend history here. Brady is a world leader in complete identification solutions that help companies improve productivity, performance, safety and security. BRC's products help customers increase safety, security, productivity and performance and include high-performance labels, signs, safety devices, printing systems and software. Currently, the company carries a Zacks Rank #3.
On Aug 31, 2022, Brady declared that its shareholders would receive a dividend of $0.23 per share on Oct 28, 2022. BRC has a dividend yield of 2%. Over the past 5 years, Brady has increased its dividend six times, and its payout ratio presently stays at 29% of earnings.
Check BRC’s dividend history here.