In this rocky market, dividend stocks may look more appealing to investors. Volatility continued on Monday, with stocks falling ahead of the expected implementation of tariffs on Wednesday, in what President Donald Trump is calling “liberation day.” At one point, the S & P 500 touched its lowest level since September and fell into correction territory. It is now off session lows. Meanwhile, the latest CNBC Rapid Update survey shows that economists expect just 0.3% growth in gross domestic product compared with the 2.3% reported in the fourth quarter of 2024. Dividends make up a larger portion of total returns during periods of slow growth, said Morgan Stanley strategist Todd Castagno. “With low growth comes a declining interest rate environment, which makes durable, higher yielding dividends relatively more attractive as cash and fixed income become less lucrative,” he wrote in a March 6 note. “A steady income stream from dividends may also help damper volatility and provide a little hedge against inflation.” One of Morgan Stanley’s dividend ideas is focusing on companies that have increased their dividends by at least 15% quarter over quarter year to date. Castagno focused on those in the Russell 1000 . “Over the 6 months following a change in dividend per share, we found that companies that announced an increase saw their stock prices outperform by an average of +3.1%,” he said. “Larger increases tended to lead to greater outperformance.” Here are some of the dividend stocks that made the cut. Royal Caribbean , which pays a dividend yield just shy of 1%, raised its payout quarter over quarter by 38%, Castagno said. The cruise operator has an average analyst rating of overweight and nearly 40% upside to the average price target, according to FactSet. On Monday, Jefferies initiated coverage of the stock with a hold rating, noting that Royal Caribbean was “priced to perfection.” RCL YTD mountain Royal Caribbean The cruise operator has come in the crosshairs of the Trump administration over taxes. Commerce Secretary Howard Lutnick has said the cruise companies are not paying their fair share and vowed that would end. Still, Royal Caribbean has been enjoying strong pricing and booking momentum. CEO Jason Liberty recently told CNBC’s Jim Cramer he is not concerned about Lutnick’s comments because the company already pays a lot in taxes. He also said tariffs will not be a major challenge because the cruise line mostly buys products from the U.S. Liberty also pointed out that cruising is still cheaper than land-based vacations . “[Consumers are] still getting a lot of value out of that vacation experience, and our recent surveys of our guests show that, actually, their propensity to cruise is at all-time highs, and their desire to go on vacation is 50% higher than it has been in the past,” he said in an interview with “Mad Money.” Shares are down nearly 12% year to date. T-Mobile , on the other hand, is up about 20% so far this year. It has a 1.33% dividend yield and has increased its payout by about 35% quarter over quarter. TMUS YTD mountain T-Mobile The wireless carrier has an overage analyst rating of overweight but just about 0.5% upside to the average price target, per FactSet. In January, T-Mobile posted an earnings and revenue beat for its fourth quarter. The company also gave full-year guidance that topped expectations. Investors in Southern Copper are earning a 2.1% dividend yield. The company raised its dividend quarter over quarter by 17.3%, Castagno pointed out. The stock has an average analyst rating of hold and nearly 3% upside to the average price target, per FactSet. One firm bullish is UBS, which upgraded Southern Copper to buy from neutral earlier this month, citing an attractive risk/reward. SCCO YTD mountain Southern Copper Shares have risen more than 3% year to date. Lastly, Lam Research has increased its dividend quarter over quarter by 15%, Castagno said. It currently pays a 1.27% dividend yield. The stock has an average analyst rating of overweight and 36% upside to the average price target, FactSet data show. Shares are down about 1% so far this year. — CNBC’s Julie Coleman contributed reporting. Get Your Ticket to Pro LIVE Join us at the New York Stock Exchange! Uncertain markets? Gain an edge with CNBC Pro LIVE , an exclusive, inaugural event at the historic New York Stock Exchange. In today’s dynamic financial landscape, access to expert insights is paramount. As a CNBC Pro subscriber, we invite you to join us for our first exclusive, in-person CNBC Pro LIVE event at the iconic NYSE on Thursday, June 12. Join interactive Pro clinics led by our Pros Carter Worth, Dan Niles, and Dan Ives, with a special edition of Pro Talks with Tom Lee. You’ll also get the opportunity to network with CNBC experts, talent and other Pro subscribers during an exciting cocktail hour on the legendary trading floor. Tickets are limited!
