Buy These 5 Stocks That Recently Declared Dividend Hikes

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Markets have remained volatile almost throughout the year now. Soaring inflation and geopolitical tensions have been taking a toll on stocks. This has compelled the Fed to aggressively hike interest rates. Although prices have cooled lately, inflation is still at multi-year highs.

Data released on Sep 13 showed that Consumer Price Index (CPI) inflation for August increased 8.3% year over year, down from an 8.5% rise in July but above analysts’ expectations of an 8.1% rise. The high inflation reading once again assures that the Fed will go for a steep interest rate hike in the meeting coming up later this month. Moreover, steeper rate hikes are to follow as the Fed has indicated that it will continue with its aggressive rate-hike stance to combat inflation.
 

Inflation at Multi-Year High

The U.S. consumer price index for August rose unexpectedly despite a drop in fuel prices. The jump was fueled by higher costs of rent and an increase in food prices. Following the release of the August CPI inflation numbers, the Dow plummeted 1,276.37 points, while the S&P 500 and Nasdaq tumbled 177.72 points and 632.84 points, respectively.

Understandably, investor sentiment was dented further following the release of data, which now gives the Fed the perfect cover to go for a sharp rate hike in its September meeting.

Fed Chair Jerome Powell had already indicated that the central bank would continue with its aggressive rate-hike stance so long it is not able to fully combat soaring inflation. The Fed has already hiked interest rates by 225 basis points so far this year, and another 75-basis-point hike is expected this month.

In fact, the Fed is likely to go for more rate hikes this year. The Fed’s aggressive monetary policy has instilled fears of an economic slowdown in the minds of investors.

Higher interest rates increase the cost of borrowing and escalate the chance of an economic slowdown. Both of these are negative signs for the markets, which have already experienced volatility this year. Stock prices are still being affected by worries about an economic slowdown.

Geopolitical tensions between Russia and Ukraine have also contributed to the market's already existing problems, as sanctions against Russia are having a direct impact on energy prices.

Therefore, it makes sense for a wise investor to keep an eye on dividend-paying equities at the moment. This is because dividend stocks have a track of profitability and a strong business model, both of which help them withstand market volatility.

Dividends provide a steady stream of revenues plus there is less chance that their prices will change significantly. Actually, dividend-paying stocks have typically outperformed non-dividend-paying stocks during periods of market turmoil. Five such companies are U.S. Bancorp (USB - Free Report), PACCAR Inc (PCAR - Free Report), World Fuel Services Corporation (INT - Free Report), Fifth Third Bancorp (FITB - Free Report), and Verizon Communications Inc. (VZ - Free Report) .
 

U.S. Bancorp (USB)

U.S. Bancorp provides banking and investment services principally operating in the Midwest and West regions of the United States. USB is the parent company of U.S. Bank. U.S. Bancorp operates through five segments.

On Sep 13, 2022, U.S. Bancorp declared that its shareholders would receive a dividend of $0.48 per share on Oct 17, 2022. USB has a dividend yield of 3.87%. Over the past 5 years, U.S. Bancorp has increased its dividend four times, and its payout ratio is presently 41% of earnings. Check USB’s dividend history here.
 

PACCAR Inc (PCAR)

PACCAR Inc. is a leading manufacturer of heavy-duty trucks worldwide and has substantial manufacturing exposure to light/medium trucks. PCAR also designs and manufactures diesel engines and other powertrain components for use in its own products and for sale to third-party manufacturers of trucks and buses. PACCAR currently has a Zacks Rank #2 (Buy). 

On Sep 13, 2022, PACCAR Inc. announced that its shareholders would receive a dividend of $0.37 per share on Dec 6, 2022. PCAR has a dividend yield of 1.52%. Over the past 5 yearsthe company has increased its dividend seven times, and its payout ratio is presently 21% of earnings. Check PCAR’s dividend history here.
 

World Fuel Services Corporation (INT)

World Fuel Services Corporation is a global energy management company. INT is involved in providing supply fulfillment, energy procurement advisory services, and transaction and payment management solutions to commercial and industrial customers, principally in the aviation, marine, and land transportation industries.

On Sep 13, 2022, World Fuel Services Corporation announced that its shareholders would receive a dividend of $0.14 per share on Oct 7, 2022. INT has a dividend yield of 1.89%. Over the past 5 years, World Fuel Services has increased its dividend two times, and its payout ratio is presently 33% of earnings. Check INT’s dividend history here.
 

Fifth Third Bancorp (FITB)

Fifth Third Bancorp has 1,080 full-service banking centers in 11 states throughout the Midwestern and Southeastern regions of the United States. In September 2019, FITB received the Office of the Comptroller of the Currency's approval to convert from an Ohio state-chartered bank to a national bank.

On Sep 12, Fifth Third Bancorp announced that its shareholders would receive a dividend of $0.33 per share on Oct 17, 2022. FITB has a dividend yield of 3.29%. Over the past 5 yearsFifth Third Bancorp has increased its dividend seven times, and its payout ratio is presently 36% of earnings. Check FITB’s dividend history here.
 

Verizon Communications Inc. (VZ)

Verizon Communications Inc. offers communication services in the form of local phone service, long-distance, wireless and data services. With the ramp-up of 5G service across the country, VZ is likely to retain its lead in promulgating 5G mobile networks nationwide by using virtualized machines, advanced levels of operational automation, and adaptability.

On Sep 7, Verizon declared that its shareholders would receive a dividend of $0.65 per share on Nov 1, 2022. VZ has a dividend yield of 5.99%. Over the past 5 years, Verizon Communications has increased its dividend six times, and its payout ratio is presently 48% of earnings. Check VZ’s dividend history here.


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