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Buy These 5 Dividend Growth Stocks Amid Fed Policy Uncertainty
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Key Takeaways
Ford stands out with steady dividend growth, a 4.32% yield and projected revenue improvement in 2026.
AMAT combines dividend growth with long-term earnings expansion.
TPR and ALFVY add diversification, pairing consistent payouts with positive earnings growth trends.
Major U.S. stock market indices witnessed a pullback on Jan. 30, 2026, as technology shares continued to struggle and investors digested the news of Trump nominating Kevin Warsh to lead the Federal Reserve. While some view Warsh as a potential ally in the push for lower interest rates, his reputation as a policy hawk and calls for a 'regime change' at the central bank have introduced a fresh layer of uncertainty among some investors, regarding future monetary stability.
Amid this background, equity investors may find a better footing in steady dividend-growth stocks over high-beta growth names. Companies with a proven track record of increasing payouts signal the balance sheet resilience and cash flow durability required to navigate a period where the traditional growth narrative is being re-evaluated.
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 with 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 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 growth 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 16.
Here are five of the 16 stocks that fit the bill:
Michigan-based Ford Motor is one of the leading automakers in the world that manufactures, markets and services cars, trucks, sport utility vehicles, electrified vehicles and Lincoln luxury vehicles. The Zacks Consensus Estimate for first-quarter 2026 revenues suggests a year-over-year improvement of 6.4%. The stock boasts a long-term (three-to-five years) earnings growth rate of 1.5% and has an annual dividend yield of 4.32%.
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 Zacks Consensus Estimate for AMAT’s fiscal 2026 revenues suggests a year-over-year improvement of 2.3%. The stock boasts a long-term earnings growth rate of 11.70% and has an annual dividend yield of 0.57%.
AMAT currently has a Zacks Rank #2 and a Growth Score of B.
Sweden-based Alfa Laval engages on energy optimization, environmental protection and food production. The Zacks Consensus Estimate for ALFVY’s 2026 revenues suggests a year-over-year improvement of 5.9%. The stock boasts a long-term earnings growth rate of 8.50% and has an annual dividend yield of 1.31%.
ALFVY currently sports a Zacks Rank #1 and has a Growth Score of B.
New York-based Tapestry is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The Zacks Consensus Estimate for TPR’s fiscal 2026 revenues suggests a year-over-year improvement of 5.6%. The stock boasts a long-term earnings growth rate of 10.4% and has an annual dividend yield of 1.26%.
TPR currently carries a Zacks Rank #2 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 1.18%.
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 Fed Policy Uncertainty
Key Takeaways
Major U.S. stock market indices witnessed a pullback on Jan. 30, 2026, as technology shares continued to struggle and investors digested the news of Trump nominating Kevin Warsh to lead the Federal Reserve. While some view Warsh as a potential ally in the push for lower interest rates, his reputation as a policy hawk and calls for a 'regime change' at the central bank have introduced a fresh layer of uncertainty among some investors, regarding future monetary stability.
Amid this background, equity investors may find a better footing in steady dividend-growth stocks over high-beta growth names. Companies with a proven track record of increasing payouts signal the balance sheet resilience and cash flow durability required to navigate a period where the traditional growth narrative is being re-evaluated.
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 — Ford Motor (F - Free Report) , Applied Materials (AMAT - Free Report) , Alfa Laval (ALFVY - Free Report) , Tapestry (TPR - Free Report) and Donaldson (DCI - Free Report) — that could be solid choices for your portfolio.
Why Is Dividend Growth Better?
Stocks with 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 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 growth 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 16.
Here are five of the 16 stocks that fit the bill:
Michigan-based Ford Motor is one of the leading automakers in the world that manufactures, markets and services cars, trucks, sport utility vehicles, electrified vehicles and Lincoln luxury vehicles. The Zacks Consensus Estimate for first-quarter 2026 revenues suggests a year-over-year improvement of 6.4%. The stock boasts a long-term (three-to-five years) earnings growth rate of 1.5% and has an annual dividend yield of 4.32%.
F currently sports a Zacks Rank #1 and has 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 Zacks Consensus Estimate for AMAT’s fiscal 2026 revenues suggests a year-over-year improvement of 2.3%. The stock boasts a long-term earnings growth rate of 11.70% and has an annual dividend yield of 0.57%.
AMAT currently has a Zacks Rank #2 and a Growth Score of B.
Sweden-based Alfa Laval engages on energy optimization, environmental protection and food production. The Zacks Consensus Estimate for ALFVY’s 2026 revenues suggests a year-over-year improvement of 5.9%. The stock boasts a long-term earnings growth rate of 8.50% and has an annual dividend yield of 1.31%.
ALFVY currently sports a Zacks Rank #1 and has a Growth Score of B.
New York-based Tapestry is the designer and marketer of fine accessories and gifts for women and men in the United States and internationally. The Zacks Consensus Estimate for TPR’s fiscal 2026 revenues suggests a year-over-year improvement of 5.6%. The stock boasts a long-term earnings growth rate of 10.4% and has an annual dividend yield of 1.26%.
TPR currently carries a Zacks Rank #2 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 1.18%.
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.