Markets have been volatile in August after a solid July as uncertainly about the economy’s health and the Fed’s future course of action with interest rate hikes continue to concern investors. The S&P 500 and the Nasdaq Composite ended last week lower by 0.3% and 1.9%, respectively, while the Dow rose 0.6%.

Multiple factors have made investors worried. The Consumer Price Index (CPI) rose 0.2% in July. Also, core CPI, which strips out the volatile food and energy costs, advanced 0.2% month over month in July. This is the first time in 12 months that the CPI reflected an increase.

Although the rise in July consumer prices was modest, it once again gave the Fed a chance to continue with its interest rate hikes. Inflation declined steadily in 12 months from its peak of 9.1% in June 2022 but is still elevated and a lot higher than the Fed’s target rate of 2%.

Also, the producer price index (PPI) increased 0.3% month over month in July, higher than the consensus estimate of a rise of 0.2%. Year over year, PPI rose 0.8% in July. Core PPI increased, which excludes the volatile food and energy prices, rose 0.2% in July, its highest increase since February. Year over year, the core PPI rose 2.7% in July.

Stocks are scrambling to find direction as investors are still unclear about the Fed’s future course of action. Market participants have been hopeful that the Fed could soon end its current interest rate hike campaign as inflation is finally cooling.

However, the Fed resumed its interest rate hike in July. Also, last week, concerns grew over the health of the nation’s banks and the economy after credit rating agency Moody’s downgraded several major lenders and kept six banks on review for potential downgrades.

Our Choices

Given this situation, investing in dividend-paying stocks would be a prudent choice. The ability of dividend stocks to withstand market volatility is attributed to their sound business strategy and track record. An astute investor should thus want to focus on stocks that have recently increased their dividend payouts. Four such stocks are Nordson Corporation NDSN, EnerSys ENS, Martin Marietta Materials, Inc. MLM and Badger Meter, Inc. BMI.

Nordson Corporation is one of the leading manufacturers as well as distributors of products and systems designed to dispense, apply and control adhesives, coatings, polymers, sealants, biomaterials and other fluids. NDSN’s product line includes single-use components, stand-alone units for low-volume operations and microprocessor-based automated systems for high-speed, high-volume production lines.

On Aug 9, Nordson Corporation announced that its shareholders would receive a dividend of $0.68 a share on Sep 5, 2023. NDSN has a dividend yield of 1.08%. Over the past five years, Nordson Corporation has increased its dividend six times, and its payout ratio at present sits at 28% of earnings. Check Nordson Corporation’s dividend history here.

EnerSys engages in manufacturing, marketing and distribution of various industrial batteries. Additionally, ENS develops battery chargers and accessories, power equipment and outdoor cabinet enclosures. This apart, EnerSys provides support services for clients.

On Aug 9, EnerSys declared that its shareholders would receive a dividend of $0.23 a share on Sep 29, 2023. ENS has a dividend yield of 0.73%. Over the past five years, EnerSys has increased its dividend once, and its payout ratio at present sits at 1% of earnings. Check EnerSys’ dividend history here.

Martin Marietta Materials, Inc. produces and supplies construction aggregates and other heavy building materials, mainly cement, in the United States. The end uses of the company’s aggregates and cement are infrastructure, private residential and private non-residential construction. MLM currently sports a Zacks Rank #1 (Strong Buy).

On Aug 10, Martin Marietta Materials declared that its shareholders would receive a dividend of $0.74 a share on Sep 29, 2023. MLM has a dividend yield of 0.57%. Over the past five years, Martin Marietta Materials has increased its dividend six times, and its payout ratio at present sits at 17% of earnings. Check Martin Marietta Materials’ dividend history here.

Badger Meter, Inc. provides flow measurement, control and communications solutions, serving water and gas utilities, municipalities and industrial customers worldwide. BMI’s products measure water, oil, chemicals, and other fluids, and are known for accuracy, long-lasting durability and for providing valuable and timely measurement data.

On Aug 11, Badger Meter announced that its shareholders would receive a dividend of $0.27 a share on Sep 8, 2023. BMI has a dividend yield of 0.53%. Over the past five years, Badger Meter has increased its dividend six times, and its payout ratio at present sits at 34% of earnings. Check Badger Meter’s dividend history here.
Badger Meter, Inc. (BMI): Free Stock Analysis Report

Martin Marietta Materials, Inc. (MLM): Free Stock Analysis Report

Nordson Corporation (NDSN): Free Stock Analysis Report

Enersys (ENS): Free Stock Analysis Report

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