Dividend Growth Stocks Offer Resilience Amid Rising Treasury Yields

The US Treasury yield has surged to its highest level since 2004, causing investors to be cautious about high-growth stocks. To mitigate this risk, they are turning to dividend growth stocks, which offer a combination of steady income, lower volatility, and long-term compounding power.

These companies have a proven track record of increasing payouts, reflecting their balance-sheet strength and cash-flow resilience. They tend to be less prone to sharp market swings, providing downside protection in uncertain economic or political environments.

The five selected dividend growth stocks are EnerSys Inc., Amgen Inc., The Cheesecake Factory Incorporated, Vertiv Holdings Co., and Taiwan Semiconductor Manufacturing Company Ltd. Each of these companies has a solid history of year-over-year dividend growth and boasts attractive fundamentals, including durable business models, consistent profitability, expanding cash flows, healthy liquidity, strong balance sheets, and appealing valuations.

The selected stocks have outperformed the broader stock market and other dividend-paying stocks over an extended period. Their long-term earnings growth rates are impressive, ranging from 6% to 36.3%. With a Zacks Rank #1 or #2 and a Growth Score of A or B, these companies offer significant upside potential.