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. While interest rates are rising, these companies still make sense for investors looking for solid growth and income potential.
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.
Shares of five top large-cap companies that are Wall Street favorites 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, and 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.
Johnson & Johnson
With a diverse product base and an exceedingly popular and solid brand, this is among the most conservative big pharmaceutical plays, and vaccine demand could spike again. Johnson & Johnson (NYSE: JNJ) is one of the top market cap stocks in the health care sector and raised the dividend for shareholders this month for the 60th consecutive year.
With everything from medical devices to over-the-counter health items and prescription drugs, Johnson & Johnson remains one of the most diversified health care names on Wall Street. It also has one of the most exciting pipelines of new drugs in the sector, and it generates a little over half of its sales in international markets, which are expected to see higher spending on health care over the next 10 years and beyond. All that makes the stock an outstanding holding for conservative investors with a long-term investment outlook.
Investors currently receive a dividend of 2.35%. The company is expected to raise that dividend from $1.06 per share to $1.11. Citigroup’s price target of $195 compares with a $186.84 consensus target. Johnson & Johnson stock closed trading at $179.90 on Thursday.
24/7 Wall St.Kinder Morgan
This top energy stock remains a favorite across Wall Street. Kinder Morgan Inc. (NYSE: KMI) operates as an energy infrastructure company in North America. The company operates through the following segments.
The Natural Gas Pipelines segment owns and operates interstate and intrastate natural gas pipelines and underground storage systems; natural gas gathering systems and natural gas processing and treating facilities; NGLs fractionation facilities and transportation systems; and liquefied natural gas (LNG) liquefaction and storage facilities.
The Products Pipelines segment owns and operates refined petroleum products and crude oil and condensate pipelines, as well as associated product terminals and petroleum pipeline transmix facilities.
The Terminals segment owns or operates liquids and bulk terminals that store and handle various commodities, including gasoline, diesel fuel, chemicals, ethanol, metals and petroleum coke. It also owns tankers.
The CO2 segment produces, transports and markets CO2 to recover and produce crude oil from mature oil fields, and it owns interests in or operates oil fields and gasoline processing plants, as well as operates a crude oil pipeline system in West Texas. It owns and operates approximately 83,000 miles of pipelines and 144 terminals.
Shareholders now receive a 5.60% dividend. The $0.27 per share dividend is expected to increase to $0.285. Mizuho has a $21 target on Kinder Morgan stock. The $17.95 consensus target is also less than Thursday’s close at $18.78.
Parker-Hannifin
This top industrial company looks poised for a solid 2022. Parker-Hannifin Inc. (NYSE: PH) manufactures and sells motion and control technologies and systems for various mobile, industrial and aerospace markets worldwide.
The Diversified Industrial segment provides pneumatic, fluidic and electromechanical components and systems, as well as filters, systems and diagnostics solutions to monitor and remove contaminants from fuel, air, oil, water and other liquids and gases.
The Aerospace Systems segment offers flight control, hydraulic, fuel, fluid conveyance and engine systems and components for commercial and military airframe and engine programs. It also provides electronics thermal management heat rejection systems and single-phase and two-phase heat collection systems for radar, inverse synthetic aperture radar and power electronics.
Parker-Hannifin stock investors receive a 1.50% dividend. but the $1.03 per share dividend is expected to rise to $1.37. The $350 Jefferies price target is less than the $362.88 consensus target. The shares closed on Thursday at $273.87.
24/7 Wall St.Schlumberger
This top oil services company is expected to benefit from increased global exploration and production spending. Schlumberger Ltd. (NYSE: SLB) is the world’s largest provider of services and equipment used in drilling, evaluation, completion, production and maintenance of oil and natural gas wells.
The company operates in the oilfield service markets through three groups: Reservoir Characterization, Drilling and Production. Reservoir Characterization Group consists of the principal technologies involved in finding and defining hydrocarbon resources. These include WesternGeco, Wireline, Testing Services and Schlumberger Information Solutions.
Rising activity, backlog additions for integrated projects and the possibility that international pricing has bottomed should be supportive of improving earnings over the next few years.
Schlumberger stock comes with a 1.16% dividend. The expected dividend hike is from $0.125 to $0.21 share. Piper Sandler has set its target price at $55, while the most recent close was at $43.25 a share.
Travelers
This insurance giant is a very solid bet in a volatile and pricey stock market. Travelers Companies Inc. (NYSE: TRV) provides a range of commercial and personal property and casualty insurance products and services to businesses, government units, associations and individuals in the United States and internationally.
The Business Insurance segment offers workers’ compensation, commercial automobile and property, general liability, commercial multi-peril, employers’ liability, public and product liability, professional indemnity, marine, aviation, onshore and offshore energy, construction, terrorism, personal accident, and kidnap and ransom insurance products. This segment operates through select accounts, which serve small businesses; commercial accounts that serve midsized businesses; national accounts, which serve large companies; and national property and other that serve large and mid-sized customers, commercial trucking industry, and agricultural businesses, as well as markets and distributes its products through brokers, wholesale agents and program managers.
The Bond & Specialty Insurance segment provides surety, fidelity, management and professional liability, and other property and casualty coverages and related risk management services through independent agencies and brokers. The Personal Insurance segment offers property and casualty insurance covering personal risks, primarily automobile and homeowners insurance to individuals through independent agencies and brokers.
The current dividend yield is 1.91%. The company is expected to increase that dividend to $0.91 per share from $0.88. MKM Partners recently lifted its $200 price target to $215. The $184.67 consensus target compares with the most recent close at $184.24.
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