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, which 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%: a 10% for the increase in stock price and 3% for the dividends paid.
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Four top large-cap companies that are Wall Street favorites 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 analysts. While it is always possible that not all four do indeed raise their dividends, analysts expect them to, and generally the data is based on past increases in the firm’s dividend payouts.
It is important to remember, though, that no single analyst report should be used in making a buying or selling decision.
A.O. Smith
The Baird team thinks this off-the-radar pick has big upside potential. A.O. Smith Corp. (NYSE: AOS) manufactures and markets residential and commercial gas and electric water heaters, boilers, tanks and water treatment products in North America, China, Europe and India.
The company offers water heaters for residences, restaurants, hotels and motels, office buildings, laundries, car washes and small businesses, as well as residential and commercial boilers for space heating applications in hospitals, schools, hotels and other commercial buildings. Its water treatment products include on-the-go filtration bottles, point-of-use carbon and reverse osmosis products, point-of-entry water softeners and whole-home water filtration products for residences, restaurants, hotels and offices.
It also provides food and beverage filtration products; expansion tanks, commercial solar water heating systems, swimming pool and spa heaters and related products and parts; and heat pumps, combi-boilers, solar tank units and air purification products.
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