After years of a low interest rate environment, which is still trending higher, 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 on the move higher, these companies still make sense for investors looking for solid growth and income potential.
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We like to remind 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%: 10% for the increase in stock price and 3% for the dividends paid.
Five top companies that are Wall Street favorites are expected to raise their dividends this week. We screened our 24/7 Wall St. research universe and found that all are rated Buy at some top firms on Wall Street. While it is always possible that not all of them do raise their dividends, top analysts expect them to. Generally, the data is based on past increases in each 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.
Cintas
This company serves thousands of businesses, both small and large, across the United States. Cintas Corp. (NASDAQ: CTAS) provides corporate identity uniforms and related business services primarily in North and Latin America.
The company rents and services uniforms and other garments, including flame-resistant clothing, mats, mops and shop towels, and other ancillary items, and it provides restroom cleaning services and supplies. It also sells uniforms.
Cintas also offers first aid and safety services, and fire protection products and services. The company provides its products and services through its distribution network and local delivery routes, or local representatives to small service and manufacturing companies, as well as major corporations.
Investors receive a dividend of 0.91%. The expected dividend hike is over 5%, from $1.15 to $1.23 per share. Deutsche Bank has a $542 target price on Cintas stock. The consensus target is $525.71 and Monday’s closing share price was $510.57.
Landstar Systems
This stock has been on fire and is trading close to a 52-week high. Landstar Systems Inc. (NASDAQ: LSTR) provides integrated transportation management solutions in North America and elsewhere.
Its Transportation Logistics segment offers a range of transportation services, including truckload and less-than-truckload transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo, and customs brokerage. It also offers transportation services to other transportation companies, such as third-party logistics, small package and less-than-truckload service providers.
Landstar Systems provides truck services through dry and specialty vans of various sizes, unsided/platform trailers, temperature-controlled vans and containers; rail intermodal services through contracts with domestic and Canadian railroads; and domestic and international air and ocean services. This segment serves the automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics and military equipment industries.
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Its Insurance segment provides risk and claims management services, and it reinsures risks of the company’s independent contractors. The company markets its services through independent commission sales agents and third-party capacity providers.
Landstar Systems stock comes with a dividend of 0.61%. The company is expected to raise the dividend to $0.30 per share. Raymond James has set a $215 price target, while the consensus target is just $179.33. Monday’s close was at $203.05.
McKesson
This is a health care idea for investors that want to start or add to a position in the sector. McKesson Corp. (NYSE: MCK) is the largest drug distributor in the United States, as well as having sizable businesses in Canada and Europe, including distribution and retail pharmacy assets. The company is also the largest medical-surgical distributor to the non-acute care market and offers various supply chain services and technology, although recently divested its clinical health IT platform.
McKesson’s U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs and other health-care-related products. The Prescription Technology Solutions segment operates in the health care delivery system to connect pharmacies, providers, payers and biopharma for next-generation patient access and adherence solutions.
The International segment provides drug distribution services, specialty pharmacy and retail and infusion care services. Lastly, the Medical-Surgical Solutions segment distributes medical-surgical supplies and provides logistics and other services to health care providers.
Investors currently receive a 0.53% dividend. but the $0.54 per share payout is expected to rise to $0.58. The BofA Securities price objective is $485, and McKesson stock has a consensus target of $450.79. Monday’s closing share price was $413.18.
24/7 Wall St.Voya Financial
This top-rated financial is perhaps among the best value of the bunch as the sector has wobbled some this year. Voya Financial Inc. (NYSE: VOYA) operates as a retirement, investment and employee benefits company in the United States.
Its Wealth Solutions segment offers tax-deferred employer-sponsored retirement savings plans and administrative services; individual retirement accounts and other retail financial products and services; and financial planning and advisory services. This segment serves corporate, education, health care and other nonprofit and government entities, as well as institutional and individual customers.
Voya’s Investment Management segment provides fixed-income, equity, multi-asset and alternative products and solutions to individual investors and institutional clients through its direct sales force, consultant channel, banks, broker-dealers and independent financial advisers.
The Health Solutions segment offers stop loss, group life, voluntary employee-paid and disability products through consultants, brokers, third-party administrators, enrollment firms and technology partners to mid-sized and large businesses.
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Shareholders receive a 1.08% dividend. The expected dividend hike is $0.20 per share to $0.37. The $86 Wells Fargo price objective compares with a $83.64 consensus target and a closing print of $75.56 for Voya Financial stock on Monday.
Wells Fargo
This is a big money center bank benefiting from higher net interest income, and it is perhaps the best value play for 2023. Wells Fargo & Co. (NYSE: WFC) is a diversified financial services company that provides banking, investment, mortgage and consumer and commercial finance products and services in the United States and internationally.
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