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 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 analysts. While it is always possible that not all of them do indeed raise their dividends, analysts expect them to, and the data is based generally 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.
Agilent
This stock has been on fire and is a solid holding for growth investors with a degree of risk tolerance. Agilent Technologies Inc. (NYSE: A) provides application-focused solutions to the life sciences, diagnostics and applied chemical markets worldwide.
Its Life Sciences and Applied Markets segment offers liquid and gas chromatography systems and components; liquid and gas chromatography mass spectrometry systems; inductively coupled plasma mass and optical emission spectrometry instruments; atomic absorption instruments; microwave plasma-atomic emission spectrometry instruments; raman spectroscopy; cell analysis plate-based assays; flow cytometer; real-time cell analyzer; cell imaging systems; microplate readers; laboratory software, information management and analytics; laboratory automation and robotic systems; dissolution testing; vacuum pumps; and measurement technologies.
The Diagnostics and Genomics segment provides arrays for DNA mutation detection, genotyping, gene copy number determination, identification of gene rearrangements, DNA methylation profiling and gene expression profiling, as well as sequencing target enrichment, genetic data management and interpretation support software. It also provides equipment to produce synthesized oligonucleotide.
Shareholders currently receive a 0.49% yield. The company is expected to raise the dividend from $0.194 per share to $0.211.
Cowen has a $180 price target on Agilent Technologies stock, while the Wall Street consensus target is $175.88. The shares were trading on Tuesday just over $161.
Merck
This remains a leading health care stock for conservative investors. Merck & Co. Inc. (NYSE: MRK) offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.
The company also provides neuromuscular blocking agents for use in surgery, anti-bacterial products for skin and skin structure infections, cholesterol modifying medicines, non-sedating antihistamine and vaginal contraceptive products.
Shareholders currently are paid a 3.10% yield. Merck is expected to raise the dividend by a nickel per share to $0.70.
SVB Leerink’s Wall Street high $105 target is well above the consensus target for Merck stock of $95.42. The shares were seen trading on Tuesday near $84.50.
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Motorola Solutions
This stock has performed well this year and remains a Wall Street favorite. Motorola Solutions Inc. (NYSE: MSI) is a provider of communication infrastructure, devices, accessories, software and services. The company operates through two segments.
The Products segment has two product lines: Devices and Systems. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities and commercial and industrial customers operating private communications networks and manage a mobile workforce.
The Services segment provides a range of service offerings for government, public safety and commercial communication networks. This segment’s product lines include Integration services, Managed & Support services and Integrated Digital Enhanced Network.
Currently, Motorola Solutions stock investors receive a 1.15% yield. The $0.71 per share dividend is expected to rise to $0.79.
The $303 Credit Suisse price target compares with a $270.22 consensus target. Shares traded just above $253 on Tuesday.
24/7 Wall St.Nike
This is one of the most recognizable companies in the world. Nike Inc. (NYSE: NKE) designs, develops, markets and sells athletic footwear, apparel, equipment and accessories worldwide. The company offers Nike brand products in six categories, including running, Nike basketball, the Jordan brand, football, training and sportswear.
The company also markets products designed for kids, as well as for other athletic and recreational uses, such as American football, baseball, cricket, golf, lacrosse, skateboarding, tennis, volleyball, walking, wrestling and other outdoor activities. It has apparel with licensed college and professional team and league logos.
Nike also sells a line of performance equipment and accessories comprising bags, socks, sport balls, eyewear, timepieces, digital devices, bats, gloves, protective equipment and other equipment for sports activities, as well as various plastic products to other manufacturers. Further, it provides athletic and casual footwear, apparel and accessories under the Jumpman trademark; casual sneakers, apparel and accessories under the Converse, Chuck Taylor, All Star, One Star, Star Chevron and Jack Purcell trademarks; and action sports and youth lifestyle apparel and accessories under the Hurley trademark.
The current yield is 0.65% yield, and the dividend is expected to increase to $0.350 per share from $0.275.
Barclays has set a $185 price target. The consensus target is $179.84. Nike stock traded on Tuesday near $173.
These four top companies are expected to lift the dividends they pay to shareholders, and their stocks are rated Buy across Wall Street. 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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