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.
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Three top 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.
Altria
This maker of tobacco products offers value investors a great entry point now and was hit recently as cigarette sales have slowed. Altria Group Inc. (NYSE: MO | MO Price Prediction) is the parent company of Philip Morris USA (cigarettes), UST (smokeless), John Middleton (cigars), Ste. Michelle Wine Estates and Philip Morris Capital. PMUSA enjoys a 51% share of the U.S. cigarette market, led by its top cigarette brand Marlboro.
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Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer. In March 2008, it spun off its international cigarette business to shareholders. In December 2018, the company acquired 35% of Juul Labs, and it has purchased a 45% stake in cannabis company Cronus for $1.8 billion.
The company is also rolling out its own heated and vapor products, such as Marlboro HeatSticks and IQOS, both of which are slowly expanding across the country.
Altria has increased its dividend for 50 consecutive years. Shareholders currently receive a 7.11% dividend. The dividend is expected to rise to $0.88 per share from $0.66.
BofA Securities has a $58 target price for Altria stock, and the consensus target is $54.68. Monday morning, shares were trading at $48.85.
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Intuit
This company hits all the metrics in the technology sector for accounting needs. Intuit Inc. (NASDAQ: INTU) provides financial management and compliance products and services for consumers, small businesses, self-employed and accounting professionals in the United States and internationally.
The Small Business & Self-Employed segment provides QuickBooks online services and desktop software solutions, comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; QuickBooks Self-Employed solution; and QuickBooks Online Accountant and QuickBooks Accountant Desktop Plus solutions. It offers payroll solutions, such as online payroll processing, direct deposit of employee paychecks, payroll reports, electronic payment of federal and state payroll taxes, and electronic filing of federal and state payroll tax forms. This segment also offers payment-processing solutions, including credit and debit cards, and ACH payment services, as well as financial supplies and financing for small businesses.
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Its Consumer segment provides TurboTax income tax preparation products and services, as well as personal finance services. The company’s Strategic Partner segment offers Lacerte, ProSeries and ProFile desktop tax-preparation software products, as well as ProConnect Tax Online tax products, electronic tax filing service, and bank products and related services.
Shareholders are currently paid a 0.43% dividend. It is expected the company will raise the dividend to $0.64 per share from $0.59
The Mizuho price target is $550, well above the $500.79 consensus target for Intuit stock. However, shares were trading at $551.60 on Monday.
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Lam Research
This is a top chip equipment pick across Wall Street, and it has purchased 6% of its outstanding shares back over the past year. Lam Research Corp. (NASDAQ: LRCX) designs, manufactures, markets, refurbishes and services semiconductor processing equipment used in the fabrication of integrated circuits worldwide.
The company offers ALTUS systems to deposit conformal films for tungsten metallization applications, SABRE electrochemical deposition products for copper damascene manufacturing, SOLA ultraviolet thermal processing products for film treatments and VECTOR plasma-enhanced chemical vapor deposition atomic layer deposition products.
It also provides SPEED gapfill high-density plasma chemical vapor deposition products and Striker single-wafer atomic layer deposition products that provide multiple dielectric film solutions. In addition, the company offers Flex for dielectric etch applications, Kiyo for conductor etch applications, Syndion for through-silicon via etch applications and Versys metal products for metal etch processes.
Lam Research’s Coronus bevel clean products enhance die yield. Its Da Vinci, DV-Prime, EOS and SP address a range of wafer cleaning applications, and Metryx mass metrology systems offer high precision in-line mass measurement in semiconductor wafer manufacturing.
Shareholders receive a 0.92% dividend. It is expected the company will raise the dividend to $1.35 per share from $1.30.
The $790 Wall Street high price target at Stifel compares with the $743.39 consensus target. Lam Research stock was trading at $580.30 a share.
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These three top stocks are rated Buy across Wall Street, and the companies are expected to lift the dividends they pay to shareholders soon. Not only is increasing dividends and returning capital to investors important, but it also shows that the company is doing well and has the earnings and cash flow strength to increase the payouts.
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