Inflation-Resilient Dividend Growth Stocks Amid Rising Costs

As the Federal Reserve holds interest rates between 3.5% and 3.75%, oil prices above $100, and inflation concerns resurface, many investors are reassessing their dividend income reliability. Dividend growth stocks exposed to this macro backdrop can respond differently based on their balance sheets, cash flows, and pricing power. Royal Gold (RGLD) is one such stock that has been added to the Dividend Growth Stocks screener due to its royalty and streaming model's ability to support cash flows and dividends even in rising mining costs and inflation.

Royal Gold generates most of its revenue from stream interests at $876.8 million, with royalty interests contributing around $419.3 million. Market cap stands at a substantial $17.1 billion. With forecasts for double-digit earnings and revenue growth, very high profit margins near 49%, and recent Q1 and Q2 milestones, the stock's dividend profile is bolstered. The trade-off lies in its relatively high P/E ratio, reliance on gold pricing, and some leverage tied to its credit facility.

Two other stocks that have caught attention are Cabot (CBT) and Ecolab (ECL). Cabot Corporation supplies materials used in electric vehicles, energy storage, and data centers. With a market cap of $4.6 billion, it pays a dividend and uses buybacks to support earnings per share. However, investors need to consider debt levels, softer volumes in Reinforcement Materials, and recent declines in net margins and earnings.

Ecolab provides essential services like water treatment, hygiene, and infection prevention products and services. With a market cap of $75.1 billion, it has a long dividend growth record on top of its broad, recurring revenue base. Pricing power, digital offerings, and the One Ecolab program aim to lift margins and support earnings growth.