All three major U.S. stock indices closed on a weak note yesterday, falling more than 1%, reflecting investor concerns about persistent inflation. With the Federal Reserve keeping rates unchanged amid rising Middle East tensions and surging oil prices, investor patience appears to be fading. 

Meanwhile, the February Producer Price Index ("PPI") disappointed those hoping for a smooth economic recovery, showing that wholesale price increases are harder to control than expected.

Against this backdrop, the appeal of high-beta growth stocks may be fading, prompting investors to turn toward steady dividend-growth stocks. These companies have a proven track record of increasing payouts, reflecting the balance sheet resilience and cash flow durability needed to navigate a period in which the traditional growth narrative is being re-evaluated.

Stocks with a strong history of year-over-year dividend growth can help build a resilient portfolio with greater potential for capital appreciation compared to simple dividend-paying or high-yield stocks. 

We have selected five dividend growth stocks — Flowserve (FLS Quick QuoteFLS - Free Report) , Analog Devices (ADI Quick QuoteADI - Free Report) , Broadcom (AVGO Quick QuoteAVGO - Free Report) , NVIDIA (NVDA Quick QuoteNVDA - Free Report) , and TIM S.A. (TIMB Quick QuoteTIMB - 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.

These stocks possess strong fundamentals, making them attractive long-term dividend-growth investments. Their strengths include sustainable business models, a long track record of profitability, rising cash flows, solid liquidity, strong balance sheets and attractive valuation characteristics. A consistent history of dividend growth underscores the potential for continued growth ahead.

Although these stocks do not necessarily have the highest yields, they have outperformed the broader stock market or any other dividend-paying stock for an extended period.

As a result, selecting dividend-growth stocks appears to be a winning strategy when other key parameters are 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 a 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 a 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 nine.

Here are five of the nine stocks that fit the bill:

Texas-based Flowserve develops and manufactures precision-engineered flow control equipment, such as pumps, valves and seals, for critical service applications that require high reliability. The Zacks Consensus Estimate for FLS’ 2026 revenues suggests a year-over-year improvement of 6.3%. The stock boasts a long-term (three-to-five years) earnings growth rate of 11% and has an annual dividend yield of 1.13%.

FLS 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.

Massachusetts-based Analog Devices is an original equipment manufacturer of semiconductor devices, specifically analog, mixed signal, and digital signal processing integrated circuits. The Zacks Consensus Estimate for ADI’s fiscal 2026 revenues suggests a year-over-year improvement of 25.1%. The stock boasts a long-term earnings growth rate of 19.40% and has an annual dividend yield of 1.43%.

ADI currently 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, with a focus on complex digital and mixed signal complementary metal oxide semiconductor (CMOS)-based devices and analog III-V-based products. The Zacks Consensus Estimate for AVGO’s fiscal 2026 revenues suggests a year-over-year improvement of 58%. The stock boasts a long-term earnings growth rate of 48.60% and has an annual dividend yield of 0.82%.

AVGO currently holds a Zacks Rank #2 and has a Growth Score of B.

California-based NVIDIA is the worldwide leader in visual computing technologies and the inventor of the graphics processing unit, or GPU. The Zacks Consensus Estimate for NVDA’s fiscal 2027 revenues suggests a year-over-year improvement of 60%. The stock boasts a long-term earnings growth rate of 39.1% and has an annual dividend yield of 0.02%.

NVDA currently carries a Zacks Rank #2 and has a Growth Score of B.

Brazil-based TIM is a telecommunications company providing mobile voice, broadband internet, data transmission and 5G services. The Zacks Consensus Estimate for TIMB’s 2026 revenues suggests a year-over-year improvement of 11.8%. The stock boasts a long-term earnings growth rate of 20.8% and has an annual dividend yield of 5.37%.

TIMB currently holds a Zacks Rank #2 and has a Growth Score of B.