Wall Street ended last week in positive territory, but it hasn’t been a smooth journey for stocks this year. Markets turned volatile at the beginning of January on concerns that the Federal Reserve could slow its pace of rate cuts with inflation showing signs of climbing.

It is unlikely that the Federal Reserve will go for another rate cut anytime soon as it believes the economy is still holding strong.  Donald Trump’s return to power as the 47th U.S. President gave a boost to markets this week but investors are yet to get a clearer picture of his policies.

Given this situation, cautious investors looking for a steady income and ways to protect their capital may want to hold or buy dividend-paying stocks. Four such stocks are Plumas Bancorp PLBC, First Busey Corporation BUSE, Lakeland Financial Corporation LKFN and Royalty Pharma plc RPRX.

Markets Turn Unstable

Stocks had a stellar 2024, but markets turned volatile in the final weeks of December after data showed that inflation rose in November, dashing hopes of a rate cut in January. The Federal Reserve also said toward the end of last month that it sees fewer rate cuts in 2025 as inflation is still high and the economy is stronger than it had expected when it initiated the easing cycle in September.

This led to a shaky start to January. Although fresh data showed that inflation cooled marginally in December, it is unlikely that the Federal Reserve will rush toward more rate cuts anytime soon.

The Federal Reserve has so far cut interest rates by 100 basis points in three installments since September but plans to take a cautious step as a resilient economy, high consumer spending and an overall strong economy are still posing challenges in curbing inflation.

Markets are now pricing in a 99.5% chance of the Federal Reserve leaving interest rates unaltered in its January policy meeting, and a 73.6% chance of no cuts in March, according to the CME FedWatch tool. This could keep markets volatile for a longer period.

4 Stocks That Recently Announced Dividend Hikes

Given the present circumstances, opting for dividend-paying stocks could be a prudent investment decision. Such companies operate steadily, consistently paying dividends and sustaining profitability through reliable business strategies. In a volatile market, businesses with significant dividend distributions often outperform those that do not pay out dividends.

Plumas Bancorp

Plumas Bancorp is a bank holding company of Plumas Bank. PLBC’s principal subsidiary is the Bank, and the Company exists for the purpose of holding the stock of the Bank and of such other subsidiaries it may acquire or establish. The other subsidiaries of the Company are Plumas Statutory Trust I and Plumas Statutory Trust II. Plumas Bancorp presently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

On Jan. 15, Plumas Bancorp announced that its shareholders would receive a dividend of $0.30 a share on Feb. 17, 2025. PLBC has a dividend yield of 2.30%. Over the past five years, Plumas Bancorphas increased its dividend six times, and its payout ratio at present sits at 23% of earnings.Check Plumas Bancorp’s dividend history here.

Plumas Bancorp Dividend Yield (TTM)

Plumas Bancorp dividend-yield-ttm | Plumas Bancorp Quote

First Busey Corporation

First Busey Corporation is a financial holding company located in Urbana, IL. BUSE is engaged primarily in commercial, retail and correspondent banking and provides trust services, insurance services and travel services. First BuseycarriesaZacks Rank # 2 (Buy).

On Jan. 14, First Busey declared that its shareholders would receive a dividend of $0.25 a share on Jan. 31, 2025. BUSE has a dividend yield of 4.15%. Over the past five years, First Buseyhas increased its dividend four times, and its payout ratio at present sits at 46% of earnings.Check First Busey’s dividend history here.

Lakeland Financial Corporation

Lakeland Financial Corporation is a bank holding company engaged in general banking business. LKFN currently carries a Zacks Rank #2.

On Jan. 14, Lakeland Financial Corporation announced that its shareholders would receive a dividend of $0.50 a share on Feb. 5, 2025. LKFN has a dividend yield of 2.81%. Over the past five years, Lakeland Financial Corporation has increased its dividend five times, and its payout ratio at present sits at 55% of earnings.Check Lakeland Financial Corporation’s dividend history here.

Royalty Pharma

Royalty Pharma plc is a funder of biopharmaceutical industry. RPRX’s portfolio includes royalties on commercial products, including AbbVie and J&J's Imbruvica, Astellas and Pfizer's Xtandi, Biogen's Tysabri, Gilead's HIV franchise, Merck's Januvia, Novartis' Promacta and Vertex's Kalydeco, Symdeko and Trikafta, and development-stage product candidates. Royalty Pharmapresently has aZacks Rank #2.

On Jan. 10, Royalty Pharma declared that its shareholders would receive a dividend of $0.22 a share on Mar. 10, 2025. RPRX has a dividend yield of 2.73%. Over the past five years, Royalty Pharmahas increased its dividend five times, and its payout ratio at present sits at 20% of earnings.Check Royalty Pharma’sdividend history here.

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Royalty Pharma PLC (RPRX) : Free Stock Analysis Report

Lakeland Financial Corporation (LKFN) : Free Stock Analysis Report

First Busey Corporation (BUSE) : Free Stock Analysis Report

Plumas Bancorp (PLBC) : Free Stock Analysis Report

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