Tariff fears have eased over the past few weeks, and so has inflation to some extent. This has helped markets rebound this month. However, volatility has returned lately as clarity over trade deals with China and other nations remains unclear, while the Federal Reserve is yet to give a clear picture of its future rate-cut path.

Given this uncertainty, cautious investors looking for a steady income and ways to protect their capital may want to hold or buy dividend-paying stocks. Three such stocks are BayCom Corp BCML, Equitable Holdings, Inc. EQH and Northrop Grumman Corporation NOC.

Economy Still Unstable

A delay in rate cuts and a lack of clarity over the final outcome of the ongoing trade negotiations have been worrying investors. Inflation has eased over the past couple of months. The consumer price index (CPI) rose 0.2% in April after declining 0.1% in March for the first time since May 2020.

Year over year, CPI climbed 2.3%, the smallest gain since February 2021. The April reading indicates that inflation is gradually reaching the Federal Reserve’s 2% target. However, the Federal Reserve has adopted a cautious approach and left interest rates unchanged in its May meeting. Moreover, it said that Federal Reserve officials would go for a rate cut only when they are confident that inflation is declining sharply.

Separately, President Donald Trump announced hefty tariffs in April on all trading partners of the United States and especially targeted China with 145% duties. China retaliated with 125% tariffs before both countries announced a trade truce last week and paused tariffs for 90 days. Although it has eased trade war fears, investors are still unclear how the trade deals with China and other nations will shape up and how they will impact the economy.

The growing uncertainties saw consumer sentiment fall to 50.8 in May, down 2.7% from April, the second-lowest level recorded in the survey’s 75-year history. The ongoing factors could keep markets volatile for a longer period.

3 Stocks That Recently Declared Dividend Hikes

Given the uncertainty, it would be a wise decision to invest in stocks that pay dividends. These companies usually remain stable and consistently pay out dividends while sustaining profitability through strong business strategies. In a fluctuating market, companies that pay high dividends often outperform those that do not.

BayCom Corp.

BayCom Corp. provides commercial banking products and services to businesses and individuals. BCML offers deposit products, loans, online banking, cash management and banking services. BayCom Corp. has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Story Continues

On May 21, BayCom Corp. announced that its shareholders would receive a dividend of $0.20 a share on July 10. BCML has a dividend yield of 2.26%. Over the past five years, BayCom Corp. has increased its dividend three times, and its payout ratio presently sits at 29% of earnings.  Check BayCom Corp’s dividend history here.

Equitable Holdings, Inc.

Equitable Holdings, Inc. is a financial services holding company comprising two franchises, Equitable and AllianceBernstein. Equitable provides advice, protection and retirement strategies to individuals, families and small businesses. AllianceBernstein is a global investment management firm that offers research and diversified investment services to institutional investors, individuals and private wealth clients in major world markets. EQH has a Zacks Rank #3.

On May 21, Equitable Holdingsdeclared that its shareholders would receive a dividend of $0.27 a share on June 9. EQH has a dividend yield of 1.85%. Over the past five years, Equitable Holdings has increased its dividend six times, and its payout ratio presently sits at 16% of earnings.  Check Equitable Holdings’ dividend history here.

Northrop Grumman Corporation

Northrop Grumman Corporation supplies a broad array of products like space systems, military aircraft, missile defense, advanced weapons and long-range fire capabilities, mission systems, networking and communications, strategic deterrence systems, and breakthrough technologies, such as advanced computing, microelectronics and cyber. NOC has a Zacks Rank #3.

On May 20, Northrop Grummanannounced that its shareholders would receive a dividend of $2.31 a share on June 18. NOC has a dividend yield of 1.74%. Over the past five years, Northrop Grummanhas increased its dividend six times, and its payout ratio presently sits at 32% of earnings.  Check Northrop Grumman’s dividend history here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Northrop Grumman Corporation (NOC):Free Stock Analysis Report

Bay Commercial Bank (BCML):Free Stock Analysis Report

Equitable Holdings, Inc. (EQH):Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research

View Comments