Buy These 5 Dividend Growth Stocks Amid Middle East Tensions

Wall Street ended the first trading day of March 2026 on a mixed note, as its three major indices moved in opposite directions. While the tech-heavy Nasdaq Composite and S&P 500 moved up, the Dow Jones Industrial Average suffered a fall, as investors continued to navigate the volatile market situation amid the U.S.-Israel joint strike on Iran and the resulting feud across the Middle East.  

While some investors, particularly those interested in tech leaders, have lately shown resilience by buying the dip following the war-led pullback, not all equity investors might be that sturdy and may find a better footing in steady dividend-growth stocks over high-beta growth names, at this moment. Companies with a proven track record of increasing payouts signal the balance sheet resilience and cash flow durability required to navigate a period where the traditional growth narrative is being re-evaluated.

Stocks with a strong history of year-over-year dividend growth form a healthy portfolio with a greater scope of capital appreciation, as opposed to simple dividend-paying stocks or those with high yields.

We have selected five dividend growth stocks — Astec Industries ASTE, Analog Devices ADI, Amphenol APH, Morgan Stanley MS and Archrock AROC — that could be solid choices for your portfolio.

Why Is Dividend Growth Better?

Stocks with a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market and thus act as a hedge against economic or political uncertainty as well as stock market volatility. At the same time, these offer downside protection with their consistent increase in payouts.

These stocks have fundamentals that make them quality and promising long-term dividend growth investments. Their strengths include sustainable business models, a long track record of profitability, rising cash flows, solid liquidity, strong balance sheets and attractive valuation characteristics. A consistent history of dividend growth underscores the potential for continued growth ahead.

Although these stocks do not necessarily have the highest yields, they have outperformed the broader stock market or any other dividend-paying stock for an extended period.

As a result, selecting dividend-growth stocks appears to be a winning strategy when other key parameters are also taken into account.

5-Year Historical Dividend Growth Greater Than Zero: This selects stocks with a solid dividend growth history.

5-Year Historical Sales Growth Greater Than Zero: This represents stocks with a strong record of growing revenues.

5-Year Historical EPS Growth Greater Than Zero: This represents stocks with a solid earnings growth history.

Next 3-5 Year EPS Growth Rate Greater Than Zero: This represents the rate at which a company’s earnings are expected to grow. Improving earnings should help companies sustain dividend payments.

Price/Cash Flow Less Than M-Industry: A ratio lower than the industry median indicates that a stock is undervalued within its industry, meaning an investor would pay less for the company’s cash flow.

52-Week Price Change Greater Than S&P 500 (Market Weight): This ensures that a stock has appreciated more than the S&P 500 over the past year.

Top Zacks Rank: Stocks having a Zacks Rank #1 (Strong Buy) and 2 (Buy) generally outperform their peers in all types of market environments.

Growth Score of B or better: Our research shows that stocks with a Growth Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best upside potential.

These few criteria alone narrowed the universe from more than 7,700 stocks to just 17.

Here are five of the 17 stocks that fit the bill:

Tennessee-based Astec Industries is a manufacturer and marketer of road-building equipment. The Zacks Consensus Estimate for ASTE’s 2026 revenues suggests a year-over-year improvement of 13%. The stock boasts a long-term (three-to-five years) earnings growth rate of 7% and has an annual dividend yield of 0.81%.

ASTE currently sports a Zacks Rank #1 and has a Growth Score of B. You can see the complete list of today’s Zacks #1 Rank stocks here.

Massachusetts-based Analog Devices is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed signal, and digital signal processing integrated circuits. The Zacks Consensus Estimate for ADI’s fiscal 2026 revenues suggests a year-over-year improvement of 25.2%. The stock boasts a long-term earnings growth rate of 19.40% and has an annual dividend yield of 1.12%.

ADI currently has a Zacks Rank #2 and a Growth Score of B.

Connecticut-based Amphenol designs, manufactures and markets electrical, electronic and fiber optic connectors, interconnect systems, antennas, sensors and sensor-based products and coaxial and high-speed specialty cable. The Zacks Consensus Estimate for APH’s 2026 revenues suggests a year-over-year improvement of 34.9%. The stock boasts a long-term earnings growth rate of 21.90% and has an annual dividend yield of 0.74%.

APH currently holds a Zacks Rank #2 and has a Growth Score of A.

New York-based Morgan Stanley is a renowned financial services provider. The Zacks Consensus Estimate for MS’ 2026 revenues suggests a year-over-year improvement of 6%. The stock boasts a long-term earnings growth rate of 11.2% and has an annual dividend yield of 2.40%.

MS currently carries a Zacks Rank #2 and has a Growth Score of B.

Texas-based Archrock is a premier provider of natural gas compression services and equipment to customers in the oil and natural gas industry. The Zacks Consensus Estimate for AROC’s 2026 revenues suggests a year-over-year improvement of 4%. The stock boasts a long-term earnings growth rate of 12% and has an annual dividend yield of 2.39%.

AROC currently sports a Zacks Rank #1 and has a Growth Score of B.
 

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This article originally published on Zacks Investment Research (zacks.com).

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