Trivariate Research advises investors to consider dividend growth stocks as a buffer against market selloffs, noting a shift away from traditional defensive sectors. The firm identified companies with consistent dividend growth, strong sales, and earnings forecasts, highlighting Rollins and Cheniere Energy as prime examples. Other companies recommended include Microsoft, Abbott Laboratories, AbbVie, and Stryker.
In today's volatile markets, investors seeking a defensive edge should pivot towards companies demonstrating robust dividend growth, according to fresh analysis from Trivariate Research. As major market averages experienced declines, with the S&P 500 trending towards a third consecutive losing session amidst surging bond yields (the 10-year Treasury note recently hit levels last seen in early 2025, trading above 4.6%), the need for portfolio resilience is paramount.
Historically, investors looking to de-risk their equity portfolios would flock to sectors known for predictable revenue streams, such as pharmaceuticals, telecommunications, consumer staples, or utilities. However, Trivariate founder Adam Parker notes a significant shift: "One major challenge today is that this traditional defensive part of the market has never been smaller." He highlights that these sectors, which once comprised nearly 30% of the S&P 500's market capitalization 25 years ago, now account for just over 10%.
To navigate this evolving landscape, Trivariate Research has identified a new class of defensive plays: stocks with a track record of consistent dividend growth for at least the past five years, and strong indicators that these payments will continue to expand. These companies also boast projected sales growth of at least 7% and anticipated earnings growth of 10%.
Several companies made Trivariate's selective list:
- Rollins (ROL): The pest control giant appeared on Trivariate's radar. Last October, Rollins boosted its dividend payment by over 10% to just over 18 cents per share, currently yielding around 1.4%. Despite a roughly 10% dip in its shares in 2026, the company's recent investor day was well-received on Wall Street. George Tong, an analyst at Goldman Sachs, reiterated a 'buy' rating, praising ROL as a "durable compounder with economic and AI resilience," citing multiple growth drivers across its residential, commercial, and termite segments. LSEG data shows 12 out of 19 analysts rate Rollins a 'buy' or 'strong buy,' with price targets suggesting 18% upside.
- Cheniere Energy (LNG): This liquefied natural gas (LNG) provider also emerged as a consistent dividend grower. Cheniere increased its quarterly dividend by more than 10% last October, reaching approximately 56 cents per share, yielding a modest 0.9%. The stock has surged 26% this year, buoyed by reduced LNG production in the Middle East amidst the Iran war. The company recently exceeded Q1 earnings estimates and raised its full-year adjusted EBITDA guidance to between $7.25 billion and $7.75 billion. Mizuho analyst Gabriel Moreen, who rates the stock 'outperform,' highlighted record export volumes, stating, "We remain constructive on strong volume outlook and continued project execution." Wall Street remains highly bullish, with 23 out of 24 analysts rating Cheniere a 'buy' or 'strong buy,' and consensus price targets forecasting nearly 23% upside, per LSEG.
Other notable companies making Trivariate's list include tech titan Microsoft, healthcare giants Abbott Laboratories and AbbVie, and medical technology firm Stryker.
— CNBC's Michael Bloom contributed reporting.
