Dividend investments remain quite appealing. This strategy revolves around companies that not only distribute dividends but also increase them over time. It offers an attractive mix of income and growth potential, which caters to a variety of investors, whether they’re after a steady income or looking for long-term gains. In today’s uncertain market, this approach can also bring a sense of security.
In contrast to regular dividend-paying stocks or high-yield options, firms with a reliable history of yearly dividend growth can form a robust portfolio that also boasts significant capital gains. We’ve identified five dividend growth stocks: AGCO Corporation, Vertiv Holdings Co., TE Connectivity, Cardinal Health Inc., and Woodward Inc.. These could be solid additions to your holdings.
Stocks that show a strong dividend growth track record usually belong to established companies, making them less vulnerable to major market fluctuations. This can act as a safety net against economic and political uncertainties, as well as stock market volatility. On top of that, they generally provide downside protection through consistently rising payments.
These stocks also have a solid foundation, which enhances their quality as long-term investments. Key attributes include sustainable business models, rising profitability, improved cash flow, good liquidity, strong balance sheets, and various value characteristics. Moreover, their history of strong dividend growth suggests that future increases are likely.
While these stocks might not offer the highest yields, they typically outperform the broader market and other dividend payers in the long run. So, selecting dividend growth stocks appears to be a wise choice, especially when other factors are considered.
Historic dividend growth over five years greater than zero: This criterion helps zero in on stocks with a solid dividend growth background.
Historic sales growth over five years above zero: Indicates a stock with a track record of increasing revenue.
Historic EPS growth over five years also greater than zero: Represents a stock that has shown consistent revenue growth.
EPS growth rate expected over the next three to five years being above zero: This reflects the anticipated percentage of company revenue growth, which should help maintain dividend payments.
Price/Cash Flow lower than the industry average: A lower ratio compared to the industry suggests that these stocks are undervalued and investors aren’t paying a premium for the cash flows generated by the company.
52-week price change greater than the S&P 500: Ensures that stocks performed better than the index over the past year.
Top Zacks Rank: Stocks rated #1 (strong buy) or #2 (buy) typically outperform their peers across various market conditions.
Growth Score of B or better: Research indicates that when combined with a Zacks rank of #1 or #2, stocks with a growth score of A or B tend to offer considerable upside potential.
These criteria narrowed down the selection from more than 7,700 stocks to just 10. Five of these stocks fit the bill.
Starting with AGCO Corporation, based in Georgia, it’s a prominent manufacturer and distributor of agricultural equipment and related parts. Recently, its earnings estimate saw a positive revision to 43 cents over the last month, yet it’s expected to face a 37.3% year-on-year revenue decline.
AGCO holds a Zacks rank of #1 and a growth score of B.
Next is Vertiv Holdings, located in Ohio, which specializes in critical digital infrastructure for data centers and more. It serves various industries including healthcare and cloud computing, with a recent earnings estimate revision of 26 cents and a projected 34% profit growth rate.
Vertiv Holdings boasts a Zacks rank of #1 and a favorable growth score.
TE Connectivity, based in Ireland, designs and manufactures connectivity solutions across many sectors. It projects a 13.76% increase with an earnings estimate of 35 cents over the past month.
TE Connectivity also holds a Zacks rank of #1 with a growth score of B.
Moving to Cardinal Health, another Ohio-based company, it acts as a distributor for health services and products. Recently, it had a positive earnings estimate revision of 16 cents for the fiscal year ending June 2026.
Cardinal Health currently has a Zacks Rank of #2 and a growth score of A.
Finally, Woodward, located in Colorado, is known for its energy control solutions. Its earnings estimate was also revised upwards by 15 cents recently, with an expected revenue growth rate of 5.24%.
Woodward has a Zacks Rank of #2 and a B growth score.
You can explore the remaining shares in this list by signing up for a two-week free trial with Research Wizard, allowing you to use this screening tool for your trading. Additionally, you can develop and test your own investment strategy before diving in.
