Wall Street has been experiencing deep losses this year, given growing uncertainty around the new U.S. administration’s economic tariffs, which are expected to drive up consumer prices, thus curbing spending and weighing on the U.S. economy. 

In such a scenario, investors have become defensive and shifted their focus to products that provide stability and safety in a rocky market. This has raised the appeal for dividend stocks, which offer income and stability. Though dividend stocks do not offer dramatic price appreciation, they are a major source of consistent income for investors to create wealth when returns from the equity market are at risk. 

In fact, picking stocks with a history of dividend growth leads to a healthy portfolio with a greater scope of capital appreciation as opposed to simple dividend-paying stocks or those with high yields. We have selected three dividend growth stocks — Tapestry, Inc. (TPR Quick QuoteTPR - Free Report) , Gildan Activewear Inc. (GIL Quick QuoteGIL - Free Report) and Broadcom Inc. (AVGO Quick QuoteAVGO - Free Report) — that could be compelling picks for investors amid the current market turmoil.

A Look at the Strategy

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.

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.

Just these few criteria have narrowed down the universe from over 7,700 stocks to just four.

Here are three of the four stocks that fit the bill:

New York-based Tapestry, which was formerly known as Coach, is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The stock has an estimated earnings growth rate of 14.4% for the fiscal year (ending June 2025). The company delivered an average earnings surprise of 11.9% in the last four quarters. 

Tapestry 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.

Montreal-based Gildan Activewear is a manufacturer and marketer of premium quality branded basic activewear for sale principally into the wholesale imprinted activewear segment of the North American apparel market. It has an estimated earnings growth rate of 16% for this year and delivered an average earnings surprise of 5.30% in the last four quarters. 

Gildan Activewear has a Zacks Rank #2 and a Growth Score of B.

California-based Broadcom is a premier designer, developer and global supplier of a broad range of semiconductor devices focused on complex digital and mixed-signal complementary metal oxide semiconductor-based devices and analog III-V based products. The stock saw solid earnings estimate revision of 29 cents for the fiscal year (ending October 2025) over the past 30 days and has an expected earnings growth rate of 35.5%. 

Broadcom has a Zacks Rank #2 and a Growth Score of A.

You can get the remaining stock 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.

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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.