We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
5 Dividend Growth Stocks to Buy as US Rate Hike Concerns Ease
Read MoreHide Full Article
Key Takeaways
Dell Technologies, Taiwan Semiconductor and three others stand out for dividend growth and solid fundamentals.
Taiwan Semiconductor and Amphenol project strong 2026 revenue growth of 35.7% and 53.5%, respectively.
The five stocks combine dividend growth with positive sales, earnings and projected EPS growth.
All three major U.S. stock indices ended Aug. 7, 2026, in positive territory, as a softer-than-expected jobs report eased concerns over the Federal Reserve implementing further rate hikes in the near term. At the same time, robust tech and software earnings helped dispel fears surrounding artificial intelligence (AI) market disruption.
While lower rate expectations and strong tech earnings often drive investors toward aggressive growth plays, recent market volatility — particularly among tech firms making massive capital expenditures on AI data centers — warrants caution.
For risk-averse investors, steady dividend-growth stocks offer a far more prudent balance of consistent income, lower volatility, and reliable long-term returns at this juncture.
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 in which 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 five dividend growth stocks — Dell Technologies (DELL - Free Report) , Taiwan Semiconductor (TSM - Free Report) , Amphenol Corp. (APH - Free Report) , Cheesecake Factory (CAKE - Free Report) and GormanRupp (GRC - 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. 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 with a Zacks Rank #1 (Strong Buy) or 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 the five of those nine stocks that fit the bill:
Texas-based Dell Technologies is a leading provider of servers, storage, and personal computers. The company’s IT solutions support customers in traditional infrastructure and multi-cloud environments. The Zacks Consensus Estimate for DELL’s fiscal 2027 revenues suggests a year-over-year improvement of 67.6%. The stock boasts a long-term (three-to-five years) earnings growth rate of 26.40%. It has an annual dividend yield of 0.56%.
DELL currently carries a Zacks Rank #2 and has a Growth Score of A.
Headquartered in Taiwan, Taiwan Semiconductor is the world's largest dedicated integrated circuit (IC) foundry. The Zacks Consensus Estimate for TSM’s 2026 revenues suggests a year-over-year improvement of 35.7%. The stock boasts a long-term earnings growth rate of 26.5% and has an annual dividend yield of 0.71%.
Connecticut-based Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products, and coaxial, high-speed, fiber optic and specialty cable. The Zacks Consensus Estimate for APH’s 2026 revenues suggests a year-over-year improvement of 53.5%. The stock boasts a long-term earnings growth rate of 24% and has an annual dividend yield of 0.59%.
APH currently sports a Zacks Rank #1 and a Growth Score of B.
Headquartered in California, Cheesecake Factory is a restaurant and bakery company that owns and operates hundreds of upscale, full-service dining locations. The Zacks Consensus Estimate for CAKE’s 2026 revenues suggests a year-over-year improvement of 6.8%. The stock boasts a long-term earnings growth rate of 12.50% and has an annual dividend yield of 1.12%.
CAKE currently sports a Zacks Rank #1 and a Growth Score of A.
Ohio-based GormanRupp designs, manufactures and sells pumps and related equipment (pump and motor controls) for use in water, wastewater, construction, industrial, petroleum, original equipment, agricultural, fire protection, military and other liquid-handling applications. The Zacks Consensus Estimate for GRC’s 2026 revenues suggests a year-over-year improvement of 6.5%. The stock boasts a long-term earnings growth rate of 13% and has an annual dividend yield of 0.91%.
GRC currently carries a Zacks Rank #2 and a Growth Score of A.
View the Zacks #1 Rank List
Image: Bigstock
5 Dividend Growth Stocks to Buy as US Rate Hike Concerns Ease
Key Takeaways
All three major U.S. stock indices ended Aug. 7, 2026, in positive territory, as a softer-than-expected jobs report eased concerns over the Federal Reserve implementing further rate hikes in the near term. At the same time, robust tech and software earnings helped dispel fears surrounding artificial intelligence (AI) market disruption.
While lower rate expectations and strong tech earnings often drive investors toward aggressive growth plays, recent market volatility — particularly among tech firms making massive capital expenditures on AI data centers — warrants caution.
For risk-averse investors, steady dividend-growth stocks offer a far more prudent balance of consistent income, lower volatility, and reliable long-term returns at this juncture.
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 in which 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 five dividend growth stocks — Dell Technologies (DELL - Free Report) , Taiwan Semiconductor (TSM - Free Report) , Amphenol Corp. (APH - Free Report) , Cheesecake Factory (CAKE - Free Report) and GormanRupp (GRC - 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. 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 with a Zacks Rank #1 (Strong Buy) or 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 the five of those nine stocks that fit the bill:
Texas-based Dell Technologies is a leading provider of servers, storage, and personal computers. The company’s IT solutions support customers in traditional infrastructure and multi-cloud environments. The Zacks Consensus Estimate for DELL’s fiscal 2027 revenues suggests a year-over-year improvement of 67.6%. The stock boasts a long-term (three-to-five years) earnings growth rate of 26.40%. It has an annual dividend yield of 0.56%.
DELL currently carries a Zacks Rank #2 and has a Growth Score of A.
Headquartered in Taiwan, Taiwan Semiconductor is the world's largest dedicated integrated circuit (IC) foundry. The Zacks Consensus Estimate for TSM’s 2026 revenues suggests a year-over-year improvement of 35.7%. The stock boasts a long-term earnings growth rate of 26.5% and has an annual dividend yield of 0.71%.
TSM currently sports a Zacks Rank #1 and a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.
Connecticut-based Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products, and coaxial, high-speed, fiber optic and specialty cable. The Zacks Consensus Estimate for APH’s 2026 revenues suggests a year-over-year improvement of 53.5%. The stock boasts a long-term earnings growth rate of 24% and has an annual dividend yield of 0.59%.
APH currently sports a Zacks Rank #1 and a Growth Score of B.
Headquartered in California, Cheesecake Factory is a restaurant and bakery company that owns and operates hundreds of upscale, full-service dining locations. The Zacks Consensus Estimate for CAKE’s 2026 revenues suggests a year-over-year improvement of 6.8%. The stock boasts a long-term earnings growth rate of 12.50% and has an annual dividend yield of 1.12%.
CAKE currently sports a Zacks Rank #1 and a Growth Score of A.
Ohio-based GormanRupp designs, manufactures and sells pumps and related equipment (pump and motor controls) for use in water, wastewater, construction, industrial, petroleum, original equipment, agricultural, fire protection, military and other liquid-handling applications. The Zacks Consensus Estimate for GRC’s 2026 revenues suggests a year-over-year improvement of 6.5%. The stock boasts a long-term earnings growth rate of 13% and has an annual dividend yield of 0.91%.
GRC currently carries a Zacks Rank #2 and a Growth Score of A.