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Buy These 5 Dividend Growth Stocks Amid Conflicting Labor Market Data
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Key Takeaways
Conflicting December jobs data pushed investors to favor dividend-growth stocks over high-risk growth names.
WWD, CAH, FOX, KGC and DCI show positive earnings growth predictions.
These stocks pair consistent dividend hikes with solid fundamentals.
Major U.S. stock market indices closed in positive territory on Jan. 9, 2026, following the release of the nation’s December jobs data. While America’s unemployment rate ticked down to 4.4% sequentially and came in better than the market’s expectation, the number of jobs added missed expectations and went down from the November statistic.
Amid this labor market 'tug-of-war,' equity investors may pivot toward dividend-growth stocks over high-risk growth names. This shift is most likely to be driven by investors’ preference for quality and visibility, as companies with a consistent history of dividend increases signal the robust cash flows needed to withstand economic deceleration, providing a valuable defensive hedge as the broader growth narrative begins to blur.
In fact, stocks with a strong history of year-over-year dividend growth form a healthy portfolio with a greater scope of capital appreciation, as opposed to simple dividend-paying stocks or those with high yields.
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 strong history of dividend growth suggests an increase ahead.
Although these stocks do not necessarily have the highest yields, they have outperformed for a more extended period than the broader stock market or any other dividend-paying stock.
As a result, selecting dividend-growth stocks appears to be a winning strategy when other key parameters are also taken into account.
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 lower than the industry median indicates that the stock is undervalued within its industry, meaning an investor would pay less for the company’s cash flow.
52-Week Price Change Greater Than S&P 500 (Market Weight): This ensures that the stock has 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 environments.
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.
These few criteria alone narrowed the universe from more than 7,700 stocks to just eight.
Here are five of the eight stocks that fit the bill:
Colorado-based Woodward is an independent designer, manufacturer, and service provider of energy conversion and control solutions for the aerospace and industrial markets. The Zacks Consensus Estimate for WWD’s fiscal 2026 revenues suggests a year-over-year improvement of 11.2%. The stock boasts a long-term (three-to-five years) earnings growth rate of 15.20% and has an annual dividend yield of 0.35%.
Ohio-based Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (“GMPD”) and other growth businesses. The Zacks Consensus Estimate for CAH’s fiscal 2026 revenues suggests a year-over-year improvement of 16.2%. The stock boasts a long-term earnings growth rate of 13.90% and has an annual dividend yield of 1.02%.
CAH currently has a Zacks Rank #2 and a Growth Score of A.
New York-based Fox produces and distributes news, sports and entertainment content. The Zacks Consensus Estimate for FOX’s fiscal 2027 revenues suggests a year-over-year improvement of 3.6%. The stock boasts a long-term earnings growth rate of 10.10% and has an annual dividend yield of 0.84%.
FOX currently carries a Zacks Rank #2 and has a Growth Score of B.
Canada-based Kinross Gold is involved in the exploration and operation of gold mines. The Zacks Consensus Estimate for KGC’s 2026 revenues suggests a year-over-year improvement of 11%. The stock boasts a long-term earnings growth rate of 36.5% and has an annual dividend yield of 0.45%.
KGC currently sports a Zacks Rank #1 and has a Growth Score of A.
Minnesota-based Donaldson is engaged in the manufacturing and selling of filtration systems and replacement parts across the world. The consensus estimate for DCI’s fiscal 2026 revenues suggests a year-over-year improvement of 3.5%. The stock boasts a long-term earnings growth rate of 10% and has an annual dividend yield of 1.26%.
DCI currently holds a Zacks Rank #2 and has a Growth Score of B.
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 create your own strategies and test them first before taking the investment plunge.
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Buy These 5 Dividend Growth Stocks Amid Conflicting Labor Market Data
Key Takeaways
Major U.S. stock market indices closed in positive territory on Jan. 9, 2026, following the release of the nation’s December jobs data. While America’s unemployment rate ticked down to 4.4% sequentially and came in better than the market’s expectation, the number of jobs added missed expectations and went down from the November statistic.
Amid this labor market 'tug-of-war,' equity investors may pivot toward dividend-growth stocks over high-risk growth names. This shift is most likely to be driven by investors’ preference for quality and visibility, as companies with a consistent history of dividend increases signal the robust cash flows needed to withstand economic deceleration, providing a valuable defensive hedge as the broader growth narrative begins to blur.
In fact, stocks with a strong history of year-over-year dividend growth form 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 five such dividend growth stocks — Woodward Inc. (WWD - Free Report) , Cardinal Health (CAH - Free Report) , Fox Corp. (FOX - Free Report) , Kinross Gold (KGC - Free Report) and Donaldson (DCI - Free Report) — that could be solid choices for your portfolio.
Why Is Dividend Growth Better?
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 strong history of dividend growth suggests an increase ahead.
Although these stocks do not necessarily have the highest yields, they have outperformed for a more extended period than the broader stock market or any other dividend-paying stock.
As a result, selecting dividend-growth stocks appears to be a winning strategy when other key parameters are also taken into account.
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 lower than the industry median indicates that the stock is undervalued within its industry, meaning an investor would pay less for the company’s cash flow.
52-Week Price Change Greater Than S&P 500 (Market Weight): This ensures that the stock has 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 environments.
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.
These few criteria alone narrowed the universe from more than 7,700 stocks to just eight.
Here are five of the eight stocks that fit the bill:
Colorado-based Woodward is an independent designer, manufacturer, and service provider of energy conversion and control solutions for the aerospace and industrial markets. The Zacks Consensus Estimate for WWD’s fiscal 2026 revenues suggests a year-over-year improvement of 11.2%. The stock boasts a long-term (three-to-five years) earnings growth rate of 15.20% and has an annual dividend yield of 0.35%.
WWD currently has a Zacks Rank #2 and a Growth Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.
Ohio-based Cardinal Health is one of the world’s largest healthcare services and products providers, operating across Pharmaceutical & Specialty Solutions, Global Medical Products & Distribution (“GMPD”) and other growth businesses. The Zacks Consensus Estimate for CAH’s fiscal 2026 revenues suggests a year-over-year improvement of 16.2%. The stock boasts a long-term earnings growth rate of 13.90% and has an annual dividend yield of 1.02%.
CAH currently has a Zacks Rank #2 and a Growth Score of A.
New York-based Fox produces and distributes news, sports and entertainment content. The Zacks Consensus Estimate for FOX’s fiscal 2027 revenues suggests a year-over-year improvement of 3.6%. The stock boasts a long-term earnings growth rate of 10.10% and has an annual dividend yield of 0.84%.
FOX currently carries a Zacks Rank #2 and has a Growth Score of B.
Canada-based Kinross Gold is involved in the exploration and operation of gold mines. The Zacks Consensus Estimate for KGC’s 2026 revenues suggests a year-over-year improvement of 11%. The stock boasts a long-term earnings growth rate of 36.5% and has an annual dividend yield of 0.45%.
KGC currently sports a Zacks Rank #1 and has a Growth Score of A.
Minnesota-based Donaldson is engaged in the manufacturing and selling of filtration systems and replacement parts across the world. The consensus estimate for DCI’s fiscal 2026 revenues suggests a year-over-year improvement of 3.5%. The stock boasts a long-term earnings growth rate of 10% and has an annual dividend yield of 1.26%.
DCI currently holds a Zacks Rank #2 and has a Growth Score of B.
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 create your own strategies and test them first before taking the investment plunge.