U.S. stock markets have witnessed rangebound trading in April after concluding a solid first-quarter 2023. Investors seem confused about the movements of the market. The primary reason is that the U.S. economy is currently facing a dichotomy.
Several measures of inflation continued to decline in March but remained above the Fed’s 2% target. The resilient labor market has shown cracks. The hourly wage rate increased 4.2% year over year in March, reflecting its lowest monthly gain since June 2021. A series of weak economic data for the last two months clearly indicated that Fed’s rate hike started delivering the desired results.
On the other hand, a section of market participants and financial researchers are concerned that a probable recession later this year will hurt Wall Street to a large extent. A sharp drop in consumer spending, especially in retail sales, a devastated housing sector, contracting manufacturing data, soft services data and the recent weakness in the resilient labor market might lead to a recession in the near-term.
Stocks in Watch
At this stage, dividend-paying stocks should be in demand as investors try to safeguard their portfolios. We believe that one should consider stocks that have recently raised their dividend payments. Five such companies are The Travelers Companies Inc. TRV, Nasdaq Inc. NDAQ, Sonoco Products Co. SON, Discover Financial Services DFS and Costco Wholesale Corp. COST.
The Travelers boasts a strong market presence in auto, homeowners’ insurance and commercial U.S. property-casualty insurance with solid inorganic growth. A high retention rate, increase in new business and positive renewal premium change bode well.
TRV’s commercial businesses should perform well owing to market stability. Travelers remains optimistic about the personal line of business, given growth at the profitable agency auto and homeowners business. TRV aims for mid-teens core return on equity over time. TRV currently carries a Zacks Rank #3 (Hold).
On Apr 19, 2023, The Travelers Companies declared that its shareholders would receive a dividend of $1 per share on Jun 30, 2023. It has a dividend yield of 2.3%. Over the past five years, TRV has increased its dividend six times, and its payout ratio presently stays at 30% of earnings. Check TRV’s dividend history here.
The Travelers Companies, Inc. Dividend Yield (TTM)
The Travelers Companies, Inc. dividend-yield-ttm | The Travelers Companies, Inc. Quote
Nasdaq has been successful in maximizing opportunities as a technology and analytics provider and growing core marketplace businesses. Focus on growth via acquisitions and organic initiatives, which aided entry into new markets and helped NDAQ gain cross-selling opportunities, bodes well.
Intense focus on Market Technology and Information Services businesses also helps NDAQ to explore vast opportunities per its developmental strategies. A strong balance sheet and robust cash position help capitalize on growth opportunities. NDAQ remains committed to deploying capital effectively by investing in organic growth initiatives. NDAQ currently carries a Zacks Rank #3.
On Apr 19, 2023, Nasdaq declared that its shareholders would receive a dividend of $0.22 per share on Jun 30, 2023. It has a dividend yield of 1.6%. Over the past five years, NDAQ has increased its dividend seven times, and its payout ratio presently stays at 30% of earnings. Check NDAQ’s dividend history here.
Nasdaq, Inc. Dividend Yield (TTM)
Nasdaq, Inc. dividend-yield-ttm | Nasdaq, Inc. Quote
Sonoco Products has been gaining from its Metal Packaging acquisition, and strong recovery in price across most of its businesses. Stable consumer demand, recent acquisitions and productivity initiatives are expected to drive SON’s results in the current year.
Sonoco's Consumer Packaging segment will continue to gain traction from the flexible packaging business and plastic food packaging. SON’s ongoing focus on increasing investment in its core consumer and industrial businesses will aid growth. SON currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
On Apr 19, 2023, Sonoco declared that its shareholders would receive a dividend of $0.51 per share on Jun 9, 2023. It has a dividend yield of 3.3%. Over the past five years, SON has increased its dividend five times, and its payout ratio presently stays at 30% of earnings. Check SON’s dividend history here.
Sonoco Products Company Dividend Yield (TTM)
Sonoco Products Company dividend-yield-ttm | Sonoco Products Company Quote
Discover Financial provides digital banking products and services, and payment services in the United States. DFS’ integrated digital banking and payments model and the ongoing economic recovery are buoying its performance.
Expanding global payments operations and an attractive core business poise DFS well for growth. Several digital transformation efforts bode well for Discover Financial. Its strong balance sheet is a major positive. DFS currently carries a Zacks Rank #3.
On Apr 19, 2023, Discover Financial declared that its shareholders would receive a dividend of $0.70 per share on Jun 8, 2023. It has a dividend yield of 2.7%. Over the past five years, DFS has increased its dividend five times, and its payout ratio presently stays at 16% of earnings. Check DFS’ dividend history here.
Discover Financial Services Dividend Yield (TTM)
Discover Financial Services dividend-yield-ttm | Discover Financial Services Quote
Costco has been surviving the market turmoil buoyed by its key strengths are strategic investments, a customer-centric approach, merchandise initiatives, and an emphasis on membership growth. These factors have been helping COST register impressive sales and earnings numbers.
We expect Costco to register a 6.5% adjusted earnings per share improvement in fiscal 2023 on 6.5% revenue growth. This outlook accounts for the businesses’ ability to navigate the ongoing inflationary environment and supply chain bottlenecks on several fronts. A favorable product mix, steady store traffic, pricing power and strong liquidity position should help COST keep outperforming. COST currently carries a Zacks Rank #3.
On Apr 19, 2023, Costco declared that its shareholders would receive a dividend of $1.02 per share on May 19, 2023. It has a dividend yield of 0.8%. Over the past five years, COST has increased its dividend seven times, and its payout ratio presently stays at 26% of earnings. Check COST’s dividend history here.
Costco Wholesale Corporation Dividend Yield (TTM)
Costco Wholesale Corporation dividend-yield-ttm | Costco Wholesale Corporation Quote
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