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.
Four top large-cap 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.
This stock has had a solid year but still trades at a reasonable level. American Express Co. (NYSE: AXP) provides charge and credit payment card products and travel-related services worldwide. Its products and services include payment and financing products network services accounts payable expense management products and services, and travel and lifestyle services.
The company’s products and services also comprise merchant acquisition and processing, servicing and settlement, point-of-sale marketing and information products and services for merchants, and fraud prevention services, as well as the design and operation of customer loyalty programs. It sells its products and services to consumers, small businesses, midsized companies and large corporations through mobile and online applications, third-party vendors and business partners, direct mail, telephone, in-house sales teams and direct response advertising.
Shareholders currently receive a 0.98% yield. Amex is expected to raise the dividend to $0.46 per share from $0.43.
Morgan Stanley has a $195 price target on the financial giant. The consensus target for American Express stock is $183.63. The shares were trading near $177 on Monday.
General Mills Inc. (NYSE: GIS) manufactures and markets branded consumer foods worldwide. The company offers ready-to-eat cereals, refrigerated yogurt, soup, meal kits, refrigerated and frozen dough products, dessert and baking mixes, bakery flour, frozen pizza and pizza snacks, snack bars, fruit and salty snacks, ice cream, nutrition bars, wellness beverages, and savory and grain snacks, as well as various organic products, including frozen and shelf-stable vegetables.
The company also supplies branded and unbranded food products to the North American foodservice and commercial baking industries, and it manufactures and markets pet food products, including dog and cat food.