Wall Street rallied more than 1% and snapped a three-day losing streak on May 20, 2026, as U.S. Treasury yields eased and oil prices plunged amid growing optimism that the conflict in the Middle East could be resolved. However, the long-term durability of this optimism is far from certain, considering the sluggish progress in recent peace discussions between the United States and Iran.

Against this backdrop, risk-averse investors may find that steady dividend-growth stocks offer a more balanced mix of income and stability than high-beta growth plays at this stage.

These dividend-growth stocks boast a consistent track record of raising payouts, underscoring the balance sheet strength and cash flow resilience required to navigate a period when the traditional growth narrative is being reassessed.

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 three dividend growth stocks — Enersys (ENS Quick QuoteENS - Free Report) , Ultrapar Participacoes (UGP Quick QuoteUGP - Free Report) , and Repsol (REPYY Quick QuoteREPYY - Free Report) — that could be solid choices for your portfolio.

Why Is Dividend Growth Better?

Stocks with a strong history of dividend growth are typically associated with mature companies that are less prone to sharp market swings, allowing them to serve as a hedge against economic or political uncertainty, as well as broader market volatility. At the same time, their steadily rising payouts provide a measure of downside protection.

These companies are generally backed by solid fundamentals, making them attractive long-term dividend-growth investments. Key strengths include durable business models, consistent profitability, expanding cash flows, healthy liquidity, strong balance sheets and attractive valuations.

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 three.

Here are the three stocks that fit the bill:

Pennsylvania-based Enersys engages in the manufacturing, marketing and distribution of various industrial batteries. It also develops battery chargers and accessories, power equipment and outdoor cabinet enclosures. The Zacks Consensus Estimate for ENS’ fiscal 2027 revenues suggests a year-over-year improvement of 3.5%. The stock boasts a long-term (three-to-five years) earnings growth rate of 15%. It has an annual dividend yield of 0.48%.

ENS currently carries a Zacks Rank #2 and has a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.

Brazil-based Ultrapar Participacoes is one of the largest distributors of liquefied petroleum gas in Brazil and a leading producer of petrochemicals and chemicals. The Zacks Consensus Estimate for UGP’s 2026 revenues suggests a year-over-year improvement of 47.8%. The stock boasts a long-term earnings growth rate of 9.30% and has an annual dividend yield of 3.61%.

UGP currently carries a Zacks Rank #2 and a Growth Score of A.

Spain-based Repsol develops and produces crude oil products and natural gas, transports petroleum products and liquified petroleum gas and refines petroleum. REPYY holds an average four-quarter earnings surprise of 18.83%. The stock boasts a long-term earnings growth rate of 19.40%. It has an annual dividend yield of 3.48%.

REPYY currently sports a Zacks Rank #1 and a Growth Score of B.