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 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.
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 at some of the top firms on Wall Street. While it is always possible that not all of them do indeed raise their dividends, top analysts expect them to. Generally, the data is based on past increases in the firm’s dividend payouts.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
CareTrust REIT
This is a medical property real estate investment trust that is a solid idea for those seeking income but worried about inflation. CareTrust REIT Inc. (NASDAQ: CTRE) is a self-administered, publicly traded REIT engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other health-care-related properties.
With a nationwide portfolio of long-term net-leased properties and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.
Investors currently receive a 6.12% yield. The company is expected to lift the $0.265 per share dividend to $0.280. Baird has a $25 target price on the shares, and the consensus target is $22.56. The stock traded Monday morning at $17.55.
24/7 Wall St.Dollar General
Shares of the low-cost retail store are offering an incredible entry point after dropping 15% since January. Dollar General Corp. (NYSE: DG) provides various merchandise products in the southern, southwestern, Midwestern and eastern United States.
The company offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, and laundry products; packaged food comprising cereals, canned soups and vegetables, condiments, spices, sugar and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer and wine.
Its consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics and dental hygiene and foot care products; pet supplies and pet food; and tobacco products.
In addition, Dollar General offers seasonal products, including holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies. Its home products include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods. As of October 29, 2021, Dollar General operated 17,915 stores in 46 states in the United States.
Holders of Dollar General stock receive a 0.82% yield. The dividend is expected to rise to $0.46 per share from $0.42. The Raymond James target price is $260, and the consensus target is $243.50. Shares were changing hands for $207.65 on Monday.
Equity Residential
This apartment REIT company owns properties in high-growth U.S. cities. Equity Residential Inc. (NYSE: EQR) is an S&P 500 company focused on the acquisition, development and management of high-quality apartment properties in top U.S. growth markets in and around dynamic cities that attract high-quality long-term renters.
The company owns or has investments in 305 properties, consisting of 78,568 apartment units, located in Boston, New York, District of Columbia, Seattle, San Francisco, Southern California and Denver.
Last month, the company posted fourth-quarter 2021 normalized funds from operations (FFO) that exceeded the Wall Street consensus estimate. Rental income of $645.1 million also topped the consensus projection. Year over year, normalized FFO per share improved 7.9%, while rental income rose 5.2%, as the market has stayed very strong. Results were driven by outstanding physical occupancy, a substantial improvement in pricing power and an increase in non-residential revenues.
Investors now receive a 2.78% yield, but the dividend is expected to go to $0.6375 per share from $0.6025. The $104 BTIG Research target price is well above the $94.90 consensus target. Equity Residential stock traded at $87.15 a share on Monday.
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