The stock market has been witnessing wild swings lately due to concerns over multi-decade high inflation and the Federal Reserve’s tightening monetary policy. This month, the Fed increased its…
benchmark interest rate by 75 basis points to tame the inflationary pressure. Moreover, additional interest rate hikes are expected in the coming months.
According to economists polled by Reuters, the Fed is expected to lift interest rates by 75 basis points next month, followed by 50 basis points in September. The Fed’s clamp down on inflation is raising the odds of recession, further leading to heightened volatility in the market. The CBOE Volatility Index has gained 57.8% year-to-date.
Amid the volatile environment, dividend-paying stocks with solid growth records could help investors ensure a stable income stream. Dividend increases reflect the company’s strong financials, healthy cash flows, and ability to pay back shareholders. The investors’ interest in the dividend stocks is evident from iShares Core High Dividend ETF’s (HDV) 5.8% gains over the past year.
Thus, we believe investing in quality dividend-paying stocks Cardinal Health, Inc. (CAH), Investar Holding Corporation (ISTR), and National HealthCare Corporation (NHC), which have increased their dividends recently, could be ideal buys to navigate the volatile swings. These stocks are rated Buy in our proprietary POWR Ratings system.
Cardinal Health, Inc. (CAH)
CAH provides various healthcare services and products in the United States, Canada, Europe, and Asia. The company operates through two segments: Pharmaceutical; and Medical. It offers customized solutions for hospitals, healthcare systems, pharmacies, clinical laboratories, and at-home patients.
On June 2, CAH introduced a new distribution center in Columbus, Ohio, as part of a multi-year warehouse modernization and growth plan. The new distribution center is expected to support the company’s at-home solutions business.
“Expanding our warehouse footprint optimizes our distribution network and enhances our customer service levels while positioning us for sustained growth in an area of patient care that continues to evolve,” said Rob Schlissberg, President of Cardinal Health at-Home Solutions.
On May 11, CAH’s Board of Directors raised its quarterly dividend to $0.50 per share, payable on July 15, 2022. Its dividend payouts have grown at a 1% CAGR over the last three years and 1.8% CAGR over the past five years. Its four-year average dividend yield is 3.74%, while its current dividend translates to a 3.61% yield annually.
In the fiscal 2022 third quarter ended March 31, 2022, CAH’s revenue increased 14.2% year-over-year to $44.84 billion. The company’s cash and equivalents and current assets came in at $2.36 billion and $30.88 billion, respectively, as of March 31, 2022.
The $44.83 billion consensus revenue estimate for the fiscal 2022 fourth quarter (ending June 2022) represents a 5.3% improvement from the same period in 2022. Analysts expect CAH’s EPS for the current quarter to increase 54.5% year-over-year to $1.19. The company has topped the consensus revenue estimates in each of the trailing four quarters.
CAH’s shares have increased 6.5% year-to-date to close the last trading session at $54.86.
CAH’s POWR Ratings reflect this promising outlook. The stock has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
CAH has a grade of A for Growth and B for Value. Within the Medical – Services industry, it is ranked #10 of 84 stocks. To see additional POWR Ratings (Sentiment, Momentum, Stability, and Quality) for CAH, click here.
Investar Holding Corporation (ISTR)
ISTR operates as the bank holding company for Investar Bank and provides commercial banking products to individuals and small to medium-sized businesses in South Louisiana. Also, the company offers various deposit products and services, commercial real estate loans, industrial loans, consumer loans, and other cash management products.
On June 15, ISTR declared a quarterly cash dividend of $0.09 per share to holders of ISTR common stock, payable on July 29. This represents an increase of 6% in the dividend per share compared to the prior quarter and marks the 35th quarterly dividend paid by the company.
ISTR pays a $0.36 per share dividend annually, translating to a…
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