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 that 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.
Five 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 by some 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.
This top pharmaceutical and med-tech stock has very solid growth potential. Abbott Laboratories (NYSE: ABT) manufactures and sells health care products worldwide.
Its Established Pharmaceutical Products segment offers branded generic pharmaceuticals to treat pancreatic exocrine insufficiency; irritable bowel syndrome or biliary spasm; intrahepatic cholestasis or depressive symptoms; gynecological disorders; hormone replacement therapy; dyslipidemia; hypertension; hypothyroidism; Ménière’s disease and vestibular vertigo; pain, fever and inflammation; migraines; anti-infective clarithromycin; cardiovascular and metabolic products; and influenza vaccines, as well as to regulate physiological rhythm of the colon.
The Diagnostic Products segment provides immunoassay and clinical chemistry systems; assays used to screen or diagnose cancer, cardiac, drugs of abuse, fertility, infectious diseases, and therapeutic drug monitoring; hematology systems and reagents; diagnostic systems and cartridges; instruments to automate the extraction, purification and preparation of DNA and RNA from samples, and detect and measure infectious agents; genomic-based tests; informatics and automation solutions; and a suite of informatics tools and professional services.
Shareholders currently receive a 1.38% yield. The company is expected to raise the dividend to $0.54 per share from $0.45.
Morgan Stanley has a $146 price target on Abbott Laboratories stock. The consensus target is $115.53, and shares traded early Monday at $132.40.
This tech leader has reported solid earnings this year and is a member of the BofA Securities US 1 list of top stocks. Broadcom Inc. (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the wired infrastructure, wireless communications, enterprise storage and industrial end markets.
Applications for Broadcom’s products in its end markets include data center networking, home connectivity, broadband access, telecommunications equipment, smartphones and base stations, servers and storage, factory automation, power generation and alternative energy systems and displays.
Shareholders currently receive a 2.61% yield. The company is expected to raise the dividend by 40 cents per share to $4.00.
The BofA Securities price target is $650, while the consensus target is lower at $573.37. Broadcom stock traded on Monday at $560.40.
Fortune Brands Home & Security
With construction and new homes still booming, this is another great value play. Fortune Brands Home & Security Inc. (NYSE: FBHS) provides home and security products for residential home repair, remodeling, new construction and security applications.
Its Plumbing segment manufactures, assembles and sells faucets, accessories, kitchen sinks and waste disposals in the United States, China, Canada, Mexico, Southeast Asia, Europe and South America directly through its own sales force, as well as through independent manufacturers’ representatives to wholesalers, home centers, mass merchandisers and industrial distributors.
The Outdoors & Security segment offers fiberglass and steel entry door systems under the Therma-Tru brand; storm, screen and security doors under the Larson brand; composite decking and railing under the Fiberon brand; and urethane millwork under the Fypon brand. This segment also manufactures, sources and distributes locks, safety and security devices, and electronic security products under the Master Lock and American Lock brands; and fire-resistant safes, security containers and commercial cabinets under the SentrySafe brand.
Investors currently receive a 1.00% annual dividend. The dividend is expected to rise from $0.28 per share to $0.32.
The $127 BofA Securities price target is well above the $118.43 consensus estimate. The shares recently traded at $105.00.
This top pharmaceutical stock was one of the big winners in the COVID-19 vaccine race, and it could also see an increase in demand due to the new variant. Pfizer Inc. (NYSE: PFE) is a global biopharmaceutical company with a diversified portfolio of products and pipeline candidates.
Pfizer is one of the largest pharmaceutical companies in the world as measured by market capitalization and revenue, and it is a component of the Dow Jones industrial average. The company’s commercial operations are divided into two business segments: Innovative Health and Essential Health.
Germany’s BioNTech and Pfizer said they expect data “in two weeks at the latest” to show if their jab can be adjusted for the new variant. This means a response to the new variant could be much faster than the Delta variant response was.
Investors now receive a 2.94% annual dividend. The $0.39 per share dividend is expected to increase to $0.42.
Truist Securities has a $58 price target on Pfizer stock. The shares hit a multiyear high of $55.70 last week and traded at $53.50 Monday morning.
This leading medical devices company is a big beneficiary in the aging of America thesis. Stryker Corp. (NYSE: SYK) operates through three segments, including its Orthopedics segment, which provides implants for use in hip and knee joint replacements and in trauma and extremities surgeries.
The MedSurg segment offers surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, and other medical device products that are used in various medical specialties.
The Neurotechnology and Spine segment provides neurotechnology products, including those used for minimally invasive endovascular techniques; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; and minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke.
The current dividend yield is 1.02%. The company is expected to raise the dividend by six cents per share to $0.69.
Morgan Stanley’s $305 price target is well above the $285.86 consensus target on Stryker stock and a recent share price of $253.50.
These five top blue chip 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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