Investing

3 of Wall Street's Favorite Stocks Likely Raise Their Dividends This Week

Lee Jackson

Published: May 20, 2024 11:43 am

24/7 Insights

• Companies that consistently raise their dividends often have strong balance sheets.
• Passive income from dividends contributes to total return.
• Access 2 legendary, high-yield dividend stocks Wall Street loves.

After years of a low-interest rate environment, which has reversed significantly over the last two years, many investors continue to turn to equities for growth potential and the security of solid and dependable dividends. These help provide a passive income stream, equating to total return, one of the most powerful and reassuring investment strategies.

We always like to remind our readers about the inspiring impact total return has on portfolios because it is one of the best ways to help improve the chances for overall investing success. Again, total return is the combined increase in a stock’s value plus dividends. For instance, if you buy a stock at $20 that pays a 3% dividend, and it goes up to $22 in a year, your total return is 13%—10% for the increase in stock price and 3% for the dividends paid.

Three top companies that are Wall Street favorites are expected to raise their dividends this week, so we screened our 24/7 Wall St. equity research universe and found that all are rated Buy at some of the top firms on Wall Street. While it’s always possible that not all of the three do indeed raise their dividends, top analysts expect them to, and generally, the data is based on past increases in the firm’s dividend payouts.

Guess?

Source: AnthonyRosenberg / Getty Images

With many popular brands, this top stock has massive total return potential. Guess? Inc. designs, markets, distributes, and licenses lifestyle collections of apparel and accessories for men, women, and children.

It operates through five segments:

• Americas Retail
• Americas Wholesale
• Europe
• Asia
• Licensing

The company’s clothing collection includes jeans, pants, skirts, dresses, shorts, blouses, shirts, jackets, activewear, knitwear, and intimate apparel.

It also grants licenses to design, manufacture, and distribute various products that complement its apparel lines, such as eyewear, watches, handbags, footwear, kids’ and infants’ apparel, outerwear, fragrance, jewelry, and other fashion accessories, to wholesale partners to operate and sell products through licensed retail stores.

The company markets its products under these brand names:

• GUESS
• GUESS?
• GUESS U.S.A.
• GUESS Jeans
• GUESS? and Triangle Design
• MARCIANO
• Question Mark and Triangle Design
• a stylized G and a stylized M
• GUESS Kids
• Baby GUESS
• YES
• G by GUESS
• GUESS by MARCIANO
• Gc

It sells its products through direct-to-consumer, wholesale, and licensing distribution channels, as well as through its retail websites.

Investors currently receive a rich 4.57% dividend on a trailing basis. The company is expected to raise the dividend to $0.325 from $0.30.

Donaldson

Source: Aaron Hawkins / E+ via Getty Images

Lessor known than some of the other companies raising dividends, this company has been around since 1915. Donaldson Co. Inc. manufactures and sells filtration systems and replacement parts worldwide.

The company operates through three segments:

• Mobile Solutions
• Industrial Solutions
• Life Sciences

Its Mobile Solutions segment provides replacement filters for air and liquid filtration applications, such as air filtration systems; liquid filtration systems for fuel, lube, and hydraulic applications; exhaust and emissions systems and sensors; indicators; and monitoring systems. This segment sells its products to original equipment manufacturers (OEMs) in:

• Construction
• Mining
• Agriculture
• Aerospace
• Defense
• Transportation markets
• Independent distributors and OEM dealer networks

The company’s Industrial Solutions segment offers:

• Dust, fume, and mist collectors
• Compressed air and industrial gasses purification systems
• Hydraulic and lubricated rotating equipment applications
• Gas and liquid filtration for industrial processes

This segment sells its products to various distributors, OEMs, and end-users.

Its Life Sciences segment provides:

• Micro-environment gas and liquid filtration for food, beverage, and industrial processes
• Bioprocessing equipment that includes bioreactors and fermenters
• Bioprocessing consumables, such as chromatography devices, reagents and filters
• Polytetrafluoroethylene membrane-based products
• Specialized air and gas filtration systems for applications, including hard disk drives, semi-conductor manufacturing and sensors, battery systems, and powertrain components to OEMs and various end-users

Shareholders are currently paid a 1.36% yield. The company is expected to raise the dividend to $0.27 per share from $0.25.

Unum Group

Source: Terageorge / Wikimedia Commons

This insurance leader is another total return idea with a strong operating history. Unum Group Inc. together with its subsidiaries, provides financial protection benefit solutions primarily in the United States, the United Kingdom, Poland, and internationally.

It operates through four segments:

• Unum US
• Unum International
• Colonial Life
• Closed Block

The company offers:

• Group long-term and short-term disability
• Group life
• Accidental death and dismemberment products
• Supplemental and voluntary products, such as individual disability, voluntary benefits
• dental and vision products
• Accident, sickness, disability, life, and cancer and critical illness products

It also provides group pension, individual life, and corporate-owned life insurance, reinsurance pools and management operations, and other miscellaneous products. The company sells its products primarily to employers for the benefit of employees. It sells its products through field sales personnel, independent brokers, consultants, and independent contractor agent sales force and brokers.

Unum Group investors are currently paid a solid 2.75% dividend. The company is expected to lift the dividend to $0.42 from $0.365.

Three top companies, that analysts love and all rated Buy across Wall Street, are expected to raise their dividends to shareholders. Not only is increasing dividends and returning capital to investors necessary, but it also shows that the company is doing well and has the earnings and cash flow strength to increase the payouts.