After years of a low interest rate environment, many investors have turned to equities not only for the growth potential but also for solid and dependable dividends that help to provide an income stream. What this equates to is total return, which is one of the most powerful investment strategies going.
We always like to remind our readers about the impact total return can have 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 the 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 companies are expected to raise their dividends this week, so we screened our 24/7 Wall St. 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 three raise their dividends, top analysts expect them to, and generally the data is based on past increases in the firm’s dividend payouts. It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
While somewhat pricier that the other companies raising dividends this week, this is a solid idea for growth investors. Cable One Inc. (NYSE: CABO) provides data, video and voice services in the United States.
The company offers residential data services, a service to enhance Wi-Fi signal throughout the home. It also provides residential video services, such as local networks; local community programming that includes governmental and public access; and other channels, as well as digital video services, including national and regional cable networks, music channel and an interactive and electronic programming guide with parental controls.
In addition, the company offers premium channels that offer movies, original programming, live sporting events and concerts and other features. Its advanced video services, such as whole-home DVRs and high-definition set-top boxes, as well as TV Everywhere product, enables its video customers to stream various channels and shows to mobile devices and computers. Further, it provides residential voice services comprising local and long-distance calling, voicemail, call waiting, three-way calling, caller ID, anonymous call rejection and other features, as well as international calling by the minute services.
Shareholders currently receive a 0.53% dividend. The company is expected to raise the dividend to $2.75 per share from $2.50.
Wells Fargo has a $2,050 price target on the shares, but the Wall Street consensus price objective is up at $2,090.17. The stock was trading at $2,050.00 Monday morning.
This is a great regional idea for investors looking to add financials to portfolios. M&T Bank Corp. (NYSE: MTB) operates as the holding company for Manufacturers and Traders Trust Company and for Wilmington Trust, National Association.