While investors avoid stocks that do not have juicy yields, it is true that these low-yield stocks have a solid history of dividend growth that lead to outperformance.

Dividend Growth: A Winning Strategy

Dividend growth stocks offer the best of both worlds –– potential for capital appreciation and rising income even in a volatile market. This is because these stocks belong to mature companies, which are less susceptible to large swings in the market, while simultaneously offer outsized payouts or sizable yields on a regular basis irrespective of the market direction.

Stocks that have a strong history of dividend growth have superior fundamentals and form a healthy and safe portfolio as opposed to those that have high yields. Dividend growth reflects a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics. All these superior fundamentals make dividend growth stocks quality and promising investments for the long term.

Further, a history of strong dividend growth indicates that a hike is likely in the future.

Here are the screening parameters that could result in a winning dividend growth portfolio:

5-Year Historical Dividend Growth greater than zero: This selects stocks with a solid dividend growth history.

5-Year Historical Sales Growth greater than zero: This represents stocks with a strong record of growing revenue.

5-Year Historical EPS Growth greater than zero: This represents stocks with a solid earnings growth history.

Next 3–5 Year EPS Growth Rate greater than zero: This represents the rate at which a company’s earnings are expected to grow. Improving earnings should help companies sustain dividend payments.

Price/Cash Flow less than M-Industry: A ratio less than M-industry indicates that the stock is undervalued in that industry and that an investor needs to pay less for better cash flow generated by the company.

52-Week Price Change greater than S&P 500 (Market Weight): This ensures that the stock appreciated more than the S&P 500 over the past one year.

Top Zacks Rank: Stocks having a Zacks Rank #1 (Strong Buy) and 2 (Buy) generally outperform their peers in all types of market environment.

VGM Style Score of B or better: This is simply a weighted combination of Value, Growth and Momentum. This when combined with a Zacks Rank #1 or #2 offers the best upside potential.

Here are seven of the 25 stocks that fit the bill:

H&R Block Inc. (HRB - Free Report): This Missouri-based H&R Block is a diversified company involved in tax return preparation, electronic filing of income tax returns and other tax-related services. The company has seen strong earnings estimate revision of 23 cents over the past 90 days for this fiscal year and delivered an average positive earnings surprise of 8.95% in three of the past four quarters. It has a VGM Style Score of A and sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Anthem Inc. (ANTM - Free Report): This Indiana-based company operates as a health benefits company in the United States. The stock has seen positive earnings estimate revision of 29 cents over the past 90 days for this year with an expected earnings growth rate of 7.27%. The stock has a Zacks Rank #2 and a VGM Style Score of A.

Westlake Chemical Corporation (WLK - Free Report): This Texas-based company is a vertically integrated international manufacturer and supplier of petrochemicals, polymers and fabricated products. It has seen solid earnings estimate revision of 26 cents for this year over the past three months, with an expected earnings growth rate of 15.63%. The stock has a Zacks Rank #2 and a VGM Style Score of A.

Cummins Inc. (CMI - Free Report): This Indiana-based company is one of the leading worldwide designers and manufacturers of diesel engines. It has seen solid earnings estimate revision of $1.20 for this year over the past three months, and delivered an average positive earnings surprise of 14.52% in the past four quarters. It has a Zacks Rank #1 and a VGM Style Score of B.

Unum Group (UNM - Free Report): This Tennessee-based company is an industry leader in disability income protection and one of the top providers of supplemental benefits in the nation. It has delivered a positive earnings surprise of 3.39% over the past four quarters and its earnings are expected to grow at rate of 4.77% for this year. The company has a Zacks Rank #2 and a VGM Style Score of B.

Royal Caribbean Cruises Ltd. (RCL - Free Report): This Florida-based company is a global cruise vacation company that operates Royal Caribbean International, Celebrity Cruises, and Royal Celebrity Tours. It has seen solid earnings estimate revision of 19 cents for this year over the past three months, with an expected earnings growth rate of 18.57%. The stock has a Zacks Rank #2 and a VGM Style Score of A.

Aramark (ARMK - Free Report): This Pennsylvania-based company offers food services, facilities management, uniform and career apparel to health care institutions, universities, school districts, stadiums and businesses. The company delivered an average positive earnings surprise of 4.45% in the past four quarters and has an earnings growth rate of 12.98% for this fiscal year. The stock has a Zacks Rank #2 with a VGM Style Score of A.