The equity market now stands at a point of inflection. The reign of near-zero interest rate is anticipated to end and smart investors are planning for the inevitable outcome of a rate hike.
Added to this, the recent crash in the Chinese equity markets sent jitters among investors across the globe. Though this crash has been attributed to a normal correction in the market and misinformed panic about the country’s outlook, shares have plunged on Wall Street.

In this temperamental scenario, it is essential to maintain some standpoints. Investors, especially now, should scout for less volatility and high payout to shield themselves from the downturns in equities.

In fact, after the 2011 European debt crisis or 2008 mortgage meltdown, long-term investors with a strong focus on high-quality stocks emerged as winners on a total-return basis. Further, if you are an investor who has already retired or on the verge of retirement and focusing on income, you need to think about where stocks are going to be in a decade or two, instead of a couple of months.

The prudent course of action for most investors, then, will be to rely upon stable dividend payers with a strong growth potential to sustain dividends even during a downturn. Moreover, it’s better if these stocks are less volatile.

4 Picks with High Growth and Dividend

We hereby zero in on four stocks based on the following credentials: Zacks Rank #1 (Strong Buy) or 2 (Buy), beta of less than 1 and a dividend yield of at least 3%. Next we screen for stocks with Growth Style Score ‘A’ or ‘B’ using our style score system. Notably, here we have not only considered stocks with a high dividend yield but have also taken into consideration their respective dividend payout histories.

Spectra Energy Partners, LP (SEP – Snapshot Report)

This is one of the largest pipeline Master Limited Partnerships (MLPs) in the U.S. which connects high-growth supply areas to high-demand markets for natural gas, natural gas liquids and crude oil. Spectra Energy Partners holds a Zacks Rank #2 (Buy) and has a dividend yield of 4.80%. Further, it has a growth score of ‘B’ and a beta of 0.65.

The natural gas storage and transportation assets of Spectra Energy Partners generate steady cash flows, primarily backed by long-term contracts. Further, the stock is an excellent choice given its consistent track record of raising dividends for 31 consecutive quarters. At the same time, the company plans to increase its dividend by 12.5 cents per share each quarter through 2017.

Waste Management, Inc. (WM – Analyst Report)

Headquartered in Houston, TX, this company is engaged in collection, transfer, recycling and resource recovery of waste materials, apart from providing disposal services to nearly 20 million residential, commercial, industrial and municipal customers. With a Zacks Rank #2, Waste Management has a dividend yield of 3.07%. Further, it has a growth score of ‘B’ and a beta of 0.66.

Since 2004, the company has been increasing its annual dividend on a consistent basis. In fact, the company has a steady annual dividend policy in place and plans to return significant cash to its shareholders through healthy dividends and share repurchases in the future.

Kimberly-Clark Corporation (KMB – Analyst Report)

Delaware-based Kimberly-Clark has a Zacks Rank #2 and a dividend yield of 3.28%. Further, it has a growth score of ‘A’ and a beta of 0.19. It is one of the leading players in several consumer product categories including diapers, paper goods and female personal care.

The company boasts a health liquidity position and holds a consistent record of rewarding its shareholders in the form of dividend payments and share buybacks. The company had returned $3.3 billion in 2014 and $2.4 billion in 2013 to its shareholders through share repurchases and dividends. In 2015, the company expects to return at least $2 billion through the same avenues.

WGL Holdings Inc. (WGL – Snapshot Report)

Washington, DC-based WGL Holdings is a public utility that delivers and sells natural gas to metropolitan Washington, D.C. and adjoining areas in Maryland and Virginia. WGL Holdings has a Zacks Rank #2, with a dividend yield of 3.38%. Further, it has a growth score of ‘B’ and a beta of 0.57.

WGL Holdings holds a record of beating earnings in the last four quarters with an average of 121.83%. In second-quarter 2015, the company delivered a positive earnings surprise of 414.29%. Its long-term earnings projection is 6%. Over the past 30 days, the stock’s consensus earnings estimate for the current year rose to $3.00 per share from $2.92. Importantly, since 1978, the company has raised dividends every year without fail.

Bottom Line

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