Domestic macroeconomic conditions have led investors to adopt a cautious approach. The Federal Reserve kept key interest rates unchanged in its January meeting, which was in line with market expectations. The Fed announced a pause in interest rate cuts to gauge the impact of President Donald Trump’s planned tax cuts, broader tariff policies and mass deportation of undocumented immigrants. The current interest rate is in the range of 4.25-4.5%. The central bank acknowledged that inflation remains “elevated” and labor market conditions are still solid.

U.S. economic growth has slowed. The gross domestic product (GDP) increased at a 2.3% annualized rate in the last quarter of 2024 after accelerating at a 3.1% pace in the previous quarter. Growth for the full year came in at 2.8% versus 2.9% in 2023. Market participants are expecting economic growth to stay flat in the second half and inflation to rise. The trade war between the United States and China — is also a growing concern. In response to U.S.’ rising dominance and further investment in artificial intelligence (AI) infrastructure, Chinese companies have introduced the “DeepSeek” and “Qwen 2.5,” models.

Amid such volatile market conditions, investors who wish to diversify their portfolio can invest in dividend-paying stocks. Some of the prominent names are FB Financial FBK, OFG Bancorp OFG, Unitil UTL, Charles Schwab SCHW and Arthur J. Gallagher & Co. AJG. Companies that pay out dividends consistently indicate a healthy business model. Stocks that have raised dividends recently exhibit a sound financial structure and can counter market upheavals. Stocks that tend to reward investors with a high dividend payout outperform non-dividend-paying stocks in a highly volatile market.

FB Financial

FB Financial is a bank holding company that provides commercial and consumer banking services to clients primarily in Tennessee, North Alabama and North Georgia. This Nashville, TN-based company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

On Jan. 29, FBK declared that its shareholders would receive a dividend of 19 cents a share on Feb. 25, 2025. FBK has a dividend yield of 1.3%.

Over the past five years, FBK has increased its dividend five times, and its payout ratio presently sits at 20% of earnings. Check FB Financial’s dividend history here.

OFG Bancorp

OFG Bancorp is headquartered in San Juan, Puerto Rico. This Zacks Rank #2 company offers products and services which consist of consumer banking and lending, commercial banking and wealth management.

On Jan. 29, OFG declared that its shareholders would receive a dividend of 30 cents a share on Apr. 15, 2025. OFG has a dividend yield of 2.3%.

In the past five years, OFG has increased its dividend six times. Its payout ratio at present sits at 24% of earnings. Check OFG Bancorp’s dividend history here.

Unitil

Unitil is a registered public utility holding company engaged in the distribution of electricity and natural gas. The Zacks Rank #3 (Hold) company is headquartered in Hampton, NH.             

On Jan. 29, UTL announced that its shareholders would receive a dividend of 45 cents a share on Feb. 28, 2025. UTL has a dividend yield of 3.3%.

Over the past five years, UTL has increased its dividend five times. Its payout ratio now sits at 58% of earnings. Check Unitil's dividend history here.

Charles Schwab

Charles Schwab is a savings and loan holding company that provides wealth management, securities brokerage, banking, asset management, custody and financial advisory services. This Westlake, TX-based company currently carries a Zacks Rank #2.

On Jan. 29, SCHW declared that its shareholders would receive a dividend of 27 cents a share on Feb. 28, 2025. SCHW has a dividend yield of 1.2%.

Over the past five years, SCHW has increased its dividend four times, and its payout ratio presently sits at 31% of earnings. Check Charles Schwab’s dividend history here.

Arthur J. Gallagher

Arthur J. Gallagher provides insurance brokerage and consulting services and third-party claims settlement and administration services in the United States and internationally. The Zacks Rank #2 company is headquartered in Rolling Meadows, IL.               

On Jan. 29, AJG announced that its shareholders would receive a dividend of 65 cents a share on March 21, 2025. AJG has a dividend yield of 0.8%.

Over the past five years, AJG has increased its dividend five times. Its payout ratio now sits at 24% of earnings. Check Arthur J. Gallagher's dividend history here.

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