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After staging a strong comeback from the lows hit in early April, Wall Street has been experiencing volatile trading again in recent weeks. Growing uncertainty around the new U.S. administration’s economic tariffs continues to weigh on investor sentiment.
In such a scenario, investors should shift their focus to products that provide stability and safety in a rocky market. And nothing seems better than dividend investing, which offers 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 four dividend growth stocks — NetEase Inc. (NTES - Free Report) , Fox Corporation (FOX - Free Report) , Qifu Technology Inc. (QFIN - Free Report) and UGI Corporation (UGI - 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 five.
Here are four of the five stocks that fit the bill:
Beijing-based NetEase is an Internet technology company engaged in the development of applications, services and other technologies for the Internet in China. The stock saw a solid earnings estimate revision of 70 cents for this year over the past 30 days and has an expected earnings growth rate of 10.6%.
New York-based Fox Corporation produces and distributes news, sports and entertainment content. The company's brands include FOX News, FOX Sports, the FOX Network, the FOX Television Stations and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network. The company saw a positive earnings estimate revision of 5 cents for the fiscal year (ending June 2025) over the past 30 days and has an expected earnings growth rate of 32.4%.
Fox Corporation has a Zacks Rank #1 and a Growth Score of B.
China-based Qifu Technology is a Credit-Tech platform principally in China that provides a comprehensive suite of technology services to assist financial institutions and consumers and SMEs in the loan lifecycle, ranging from borrower acquisition, preliminary credit assessment, fund matching and post-facilitation services. The stock saw a positive earnings estimate revision of a penny for this year over the past 30 days and has an expected earnings growth rate of 22.6%.
Qifu has a Zacks Rank #2 and a Growth Score of A.
Pennsylvania-based UGI Corporation is a holding company that distributes, stores, transports and markets energy products and related services through its subsidiaries. It is a domestic and international retail distributor of propane and butane liquefied petroleum gases; a provider of natural gas and electric service via regulated local distribution utilities; a generator of electricity and a regional marketer of energy commodities. The stock saw a positive earnings estimate revision of a couple of cents for the fiscal year (ending September 2025) over the past 30 days.
UGI Corporation has a Zacks Rank #2 and a Growth Score of B.
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.
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.
Image: Bigstock
4 Solid Dividend Growth Stocks to Buy Now
After staging a strong comeback from the lows hit in early April, Wall Street has been experiencing volatile trading again in recent weeks. Growing uncertainty around the new U.S. administration’s economic tariffs continues to weigh on investor sentiment.
In such a scenario, investors should shift their focus to products that provide stability and safety in a rocky market. And nothing seems better than dividend investing, which offers 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 four dividend growth stocks — NetEase Inc. (NTES - Free Report) , Fox Corporation (FOX - Free Report) , Qifu Technology Inc. (QFIN - Free Report) and UGI Corporation (UGI - 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 five.
Here are four of the five stocks that fit the bill:
Beijing-based NetEase is an Internet technology company engaged in the development of applications, services and other technologies for the Internet in China. The stock saw a solid earnings estimate revision of 70 cents for this year over the past 30 days and has an expected earnings growth rate of 10.6%.
NetEase 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.
New York-based Fox Corporation produces and distributes news, sports and entertainment content. The company's brands include FOX News, FOX Sports, the FOX Network, the FOX Television Stations and sports cable networks FS1, FS2, Fox Deportes and Big Ten Network. The company saw a positive earnings estimate revision of 5 cents for the fiscal year (ending June 2025) over the past 30 days and has an expected earnings growth rate of 32.4%.
Fox Corporation has a Zacks Rank #1 and a Growth Score of B.
China-based Qifu Technology is a Credit-Tech platform principally in China that provides a comprehensive suite of technology services to assist financial institutions and consumers and SMEs in the loan lifecycle, ranging from borrower acquisition, preliminary credit assessment, fund matching and post-facilitation services. The stock saw a positive earnings estimate revision of a penny for this year over the past 30 days and has an expected earnings growth rate of 22.6%.
Qifu has a Zacks Rank #2 and a Growth Score of A.
Pennsylvania-based UGI Corporation is a holding company that distributes, stores, transports and markets energy products and related services through its subsidiaries. It is a domestic and international retail distributor of propane and butane liquefied petroleum gases; a provider of natural gas and electric service via regulated local distribution utilities; a generator of electricity and a regional marketer of energy commodities. The stock saw a positive earnings estimate revision of a couple of cents for the fiscal year (ending September 2025) over the past 30 days.
UGI Corporation has a Zacks Rank #2 and a Growth Score of B.
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.
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.