Best Dividend Stocks to Buy Now According to the Zacks Rank

U.S. stocks continued to waver in recent times as China-Taiwan tensions have mounted and the domestic economy has slowed down amid sky-high inflation and rising interest rates. Now, if the slowdown in the economy impacts corporate earnings later this year, there will be more pain ahead for stock prices.

However, rather than staying away from equity, investors could endure the volatility in the market by investing in dividend-paying stocks like First BanCorp. FBP, Archer-Daniels-Midland Company ADM, American Electric Power Company, Inc. AEP, Cathay General Bancorp CATY and Chevron Corporation CVX that carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). These stocks have a steady stream of income and are poised to gain substantially in the near future.

China-Taiwan Crisis

House Speaker Nancy Pelosi’s recent visit to Taiwan has escalated tensions between China and the United States and rattled investors already spooked by the threat of an economic slowdown.

The Taiwan crisis has further jeopardized the relationship between Beijing and Washington, which had earlier been damaged by the trade war and delisting of Chinese companies in the United States. Of course, all these geopolitical risks may increase volatility in the market in the near term.

The US Economy Is Slowing

Inflation in the United States continues to remain elevated, thereby increasing the likelihood of a further hike in interest rates in the near future. In June, the consumer price index soared 9.1% from the year-ago period, a 41-year high, compelling the Federal Reserve to increase rates for the fourth time this year. The Fed has also kept the door open for further rate hikes in September.

But rate hikes raise borrowing costs, which doesn’t bode well for the economy as well as the stock market. By the way, the United States has already slipped into a technical recession as its GDP recently contracted for the second straight quarter.

Dividend-Paying Stocks to the Rescue

Geopolitical risks and sky-high inflation, which is leading to the tightening of monetary policy, are without any doubt fueling market volatility. In spite of the mayhem, investors should bet on dividend-paying stocks since they have a long history of profitability and a justifiable business model, and are unfazed by market volatility.

Here are five such stocks that boast a Zacks Rank #1 or 2 and offer solid yields.

First BanCorp is a bank holding company that distinguished itself by providing innovative marketing strategies and novel products to attract clients.

First BanCorp has a dividend yield of 3.19%. In the past 5-year period, FBP has increased its dividend five times, and its payout has advanced 49.2%. Check First BanCorp’ dividend history here.

First BanCorp. Dividend Yield (TTM)

First BanCorp. dividend-yield-ttm | First BanCorp. Quote

FBP’s expected earnings growth rate for the current year is 14.3%. Currently, FBP has a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archer Daniels Midland is one of the leading producers of food and beverage ingredients as well as goods made from various agricultural products.

Archer Daniels Midland has a dividend yield of 1.95%. In the past 5-year period, ADM has increased its dividend five times, and its payout has advanced nearly 4.1%. Check Archer Daniels Midland’s dividend history here.

Archer Daniels Midland Company Dividend Yield (TTM)

Archer Daniels Midland Company dividend-yield-ttm | Archer Daniels Midland Company Quote

ADM’s expected earnings growth rate for the current year is 29.7%. Currently, ADM has a Zacks Rank #2.

American Electric Power is a public utility holding company, which, through directly and indirectly owned subsidiaries, generates, transmits and distributes electricity, natural gas and other commodities.

American Electric Power has a dividend yield of 3.13%. Over the past 5 years, AEP has increased its dividend five times, and its payout has advanced 5.8%. Check American Electric Power’s dividend history here.

American Electric Power Company, Inc. Dividend Yield (TTM)

American Electric Power Company, Inc. dividend-yield-ttm | American Electric Power Company, Inc. Quote

AEP’s expected earnings growth rate for the current year is 6.3%. Currently, AEP has a Zacks Rank #2.

Cathay General Bancorp is the one-bank holding company for Cathay Bank, a California state-chartered bank.

Cathay General Bancorp has a dividend yield of 3.26%. In the past 5-year period, CATY has increased its dividend three times, and its payout has advanced almost 8.3%. Check Cathay General Bancorp’s dividend history here.

Cathay General Bancorp Dividend Yield (TTM)

Cathay General Bancorp dividend-yield-ttm | Cathay General Bancorp Quote

CATY’s expected earnings growth rate for the current year is 23.7%. Currently, CATY has a Zacks Rank #2.

Chevron is one of the largest publicly traded oil and gas companies in the world, with operations that span almost every corner of the globe.

Chevron has a dividend yield of 3.66%. Over the past 5 years, CVX has increased its dividend five times, and its payout has advanced 6%. Check Chevron’s dividend history here.

Chevron Corporation Dividend Yield (TTM)

Chevron Corporation dividend-yield-ttm | Chevron Corporation Quote

CVX’s expected earnings growth rate for the current year is 115.4%. Currently, CVX has a Zacks Rank #2.

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