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 like to remind our readers about the 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%. That is, 10% for the increase in stock price and 3% for the dividends paid.
Five blue chip companies are expected to raise their dividends this week, so we screened our 24/7 Wall St. research universe and found that all their stocks are rated Buy at some of the top firms on Wall Street. While it is always possible that not all these companies do 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 also important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Fifth Third Bancorp
This top super-regional bank stock remains incredibly cheap right now. Fifth Third Bancorp (NASDAQ: FITB) is a diversified financial services company headquartered in Cincinnati, Ohio, and the indirect parent of Fifth Third Bank, National Association, a federally chartered institution.
As of March 31, 2021, the company had $207 billion in assets and operated 1,098 full-service banking centers and 2,383 Fifth Third branded ATMs in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Georgia, North Carolina and South Carolina. In total, Fifth Third provides its customers with access to approximately 53,000 fee-free ATMs across the United States.
Fifth Third is among the largest money managers in the Midwest and, as of March 31, 2021, had $464 billion in assets under care, of which it managed $58 billion for individuals, corporations and not-for-profit organizations through its Trust and Registered Investment Advisory businesses.
Shareholders currently receive a 2.79% dividend. The company is expected to raise the dividend to $0.30 per share from $0.27.
Jefferies has a $46 price target on Fifth Third Bancorp, while the consensus target is $44.04. The stock was trading near $39.30 on Monday.