4 Stocks That Recently Hiked Dividends in Focus

Markets were on a rally in the first half of this year after a solid 2023. However, volatility has returned to Wall Street and all three major indexes have retreated from their record highs in the past two weeks.

Tech stocks, which drove the rally in the first half, have been particularly taking a hit. On Jul 24, all three major stock indexes dropped significantly, with the S&P 500 and Nasdaq experiencing their biggest declines since 2022.

The S&P 500 slid 2.31%, closing at 5,427.13 points, while the Nasdaq dropped 3.64% to finish at 17,342.41 points. The Dow Jones Industrial Average also tumbled 1.25%, ending the day at 39,853.87 points.

Over the past week, investors have been rotating out of tech stocks and rushing for small-cap and cyclical stocks as the Federal Reserve gears up to start its rate-cut cycle. Investors believe rate cuts would benefit small-cap and cyclical stocks and thus have been giving up tech stocks.

This has brought volatility back to Wall Street. The Federal Reserve has already reduced its rate cut projection from three to only one this year, which could further impact tech stocks. Hence, volatility could stay for a longer period.

Also, consumer sentiment has hit rock bottom. The Michigan Consumer Sentiment Index (MCSI) dropped to an eight-month low in July. The University of Michigan's preliminary consumer sentiment index showed that consumer sentiment came in at 66.0 in July, compared with June's final reading of 68.2.

Stocks to Watch

Given this situation, investors seeking steady income and capital preservation should consider dividend stocks. These companies have stable operations, regularly pay dividends and maintain profitability due to their reliable business models. In volatile markets, high-dividend stocks typically perform better than non-dividend stocks.

Four such stocks are Cintas Corporation CTAS, Citigroup Inc. C, Community Financial System, Inc. CBU and Bank First Corporation BFC.

Cintas Corporation provides specialized services to businesses of all types throughout North America. CTAS also operates in Europe, Asia and Latin America. Cintas designs, manufactures and implements corporate identity uniform programs and provides entrance mats, restroom supplies, promotional products and first aid and safety products for diversified businesses. CTAS has a Zacks Rank #2 (Buy).

On Jul 23, Cintas declared that its shareholders would receive a dividend of $1.56 a share on Sep 3, 2024. CTAS has a dividend yield of 0.71%. Over the past five years, Cintas has increased its dividend six times, and its payout ratio at present sits at 36% of earnings.

Citigroup Inc. is a globally diversified financial services holding company, providing a range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management to consumers, corporations, governments and institutions. C has around 200 million customer accounts in more than 160 countries and jurisdictions. Citigroup has a Zacks Rank #3 (Hold)

On Jul 18, Citigroup announced that its shareholders would receive a dividend of $0.56 a share on Aug 23, 2024. C has a dividend yield of 3.28%. Over the past five years, Citigroup has increased its dividend three times, and its payout ratio at present sits at 39% of earnings.

Community Financial System, Inc. is a diversified financial services company. CBU focuses on business lines, which include banking, employee benefit services, insurance services and wealth management. Community Financial System sports a Zacks Rank #1.

On Jul 18, Community Financial System declared that its shareholders would receive a dividend of $0.46 a share on Oct 10, 2024. CBU has a dividend yield of 2.93%. Over the past five years, Community Financial System has increased its dividend six times, and its payout ratio at present sits at 54% of earnings.

Bank First Corporation offers demand, time, savings, deposits, checking, certificates of deposit, money market accounts, loan products, treasury management services, credit cards, electronic banking services, safe deposit box, insurance agency and ATM processing. BFC has a Zacks Rank #2.

On Jul 16, Bank First Corporation announced that its shareholders would receive a dividend of $0.40 a share on Oct 9, 2024. BFC has a dividend yield of 1.50%. Over the past five years, Bank First Corporation has increased its dividend six times, and its payout ratio at present sits at 23% of earnings.

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