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.
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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.
CSX
This is a solid play on an improving economy and supply chain. CSX Corp. (NASDAQ: CSX) provides rail-based freight transportation services and is one of America’s largest railroad companies.
The company’s services includes rail services, such as transportation of intermodal containers and trailers, as well as other transportation services, such as rail-to-truck transfers and bulk commodity operations. It transports chemicals, agricultural and food products, automotive, minerals, forest products, fertilizers and metals and equipment, as well as coal, coke and iron ore to electricity-generating power plants, steel manufacturers and industrial plants, and it exports coal to deepwater port facilities.
The company offers intermodal transportation services through a network of approximately 30 terminals transporting manufactured consumer goods in containers and its drayage services include the pickup and delivery of intermodal shipments. It serves the automotive industry with distribution centers and storage locations, as well as connects non-rail served customers through transferring products from rail to trucks, which includes plastics and ethanol.
The company operates approximately 19,500 route mile rail network, which serves various population centers in 23 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec, as well as owns and leases approximately 3,539 locomotives.
Shareholders currently receive a 1.07% dividend. The company is expected to lift the dividend to $0.105 from $0.093.
Deutsche Bank has a $41 price target on CSX stock, while the consensus target is $39.96. The shares were trading early Monday at $34.00.
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