Dividend growth stocks offer attractive returns and less risk, per Nuveen
Investors are likely to see some market turbulence in 2026, but the addition of dividend growth companies can help cushion their portfolios. “Bouts of volatility, such as those sparked by macro-, geopolitical- and policy uncertainty, as well as periodic shifts in sentiment around [artificial intelligence] are likely to remain a feature of equity markets,” Nuveen chief investment officer Saira Malik wrote in a recent article . “There may be no surefire cure for hiccups, but history shows that dividend growth companies have yielded higher returns with lower risk than their market peers,” she said, adding that dividends and their growth aren’t guaranteed but their predictability can help mitigate the impact of rocky markets. U.S. common dividend increases on a net basis grew $13.1 billion in the fourth quarter of 2025, compared to $11.7 billion in the year-ago period, according to S & P Dow Jones Indices. “At this point, Q1 2026 is expected to be a very busy positive period for dividend increases, as overall earnings and sales have posted record levels, with 2026 expected to post more records,” said Howard Silverblatt, senior index analyst at S & P Dow Jones Indices. S & P 500 stocks are expected to see mid-single-digit dividend increases in the new year as companies grapple with uncertainty and the rapid pace of policy change, he added. CNBC Pro screened the Vanguard Dividend Appreciation ETF (VIG) to turn up dividend growers that are beloved by Wall Street. Fifth Third Bancorp emerged on the list. Shares have jumped almost 18% in the past 12 months, and the stock has a current dividend yield of 3.25%. In September, the Cincinnati-based super regional bank raised its cash dividend 8% , lifting the quarterly payment to 40 cents a share. UBS analyst Erika Najarian this week upgraded Fifth Third to buy, dubbing it “best-in-class in both growth and profitability” with additional opportunities stemming from its pending acquisition of Comerica for some $11 billion in stock. “While we see regionals catching up in ’26 in a major way, we think investors will be selective in how they express this strategy,” Najarian wrote. “FITB fits the profile long-term investors desire: management team with strong credibility, above-peer prospects in high-growth markets and best-in-class profitability.” FITB 1Y mountain Fifth Third Bancorp in the past 12 months Coca-Cola is another reliable dividend grower. Shares are up more than 12% in the past 12 months, and Atlanta-based soft drink maker pays a current dividend yield of 3.0%. The stock appeared this week on Wells Fargo’s list of overweight tactical ideas for the first quarter. “We see prospects for accelerating volume over the course of 2026 against easy comps, building confidence in durability of top-line growth long term, with visibility on margins, partly helped by positive currency tailwinds,” analyst Chris Carey wrote. The Sprite and Fanta maker is expected to benefit from the World Cup this summer, too, he said. Coca-Cola lifted its quarterly dividend for the 63rd consecutive year last February, raising it more than 5% to 51 cents per share. KO 1Y mountain Coca-Cola in the past 12 months Other names that showed up on CNBC Pro’s screen include biopharmaceutical player AbbVie , data center power stock Entergy and insurer Unum Group . —CNBC’s Michael Bloom and Fred Imbert contributed reporting.
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