After years of a low interest rate environment, which has reversed in a big way over the past 16 months, many investors continue to turn to equities not only for the growth potential but also for the 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 our 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%: 10% for the increase in stock price and 3% for the dividends paid.
Four top large-cap 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 of the top firms on Wall Street. While it is always possible that not all five do 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.
Shares of this solid company with the funny name are closing in on a 52-week high. Badger Meter Inc. (NYSE: BMI) manufactures and markets flow measurement, quality, control, and communication solutions in North America, Europe, Asia and elsewhere.
It offers mechanical or static water meters and related radio and software technologies and services to municipal water utilities. The company also provides flow instrumentation products, including meters, valves and other sensing instruments to measure and control fluids going through a pipe or pipeline, including water, air, steam, oil and other liquids and gasses, to original equipment manufacturers as the primary flow measurement device within a product or system, as well as through manufacturers’ representatives.
In addition, the company offers Orion (SE) for traditional fixed network applications and Orion Cellular for utility-owned fixed network infrastructure, as well as Beacon, a secure cloud-hosted software suite that establishes alerts for specific conditions and allows consumer engagement tools that permit end water customers to view and manage their water usage activity. Its flow instrumentation products are used in water/wastewater, heating, ventilating and air conditioning, and corporate sustainability markets. The company serves water utilities and other industries. It sells its products directly, as well as through resellers and representatives.
Investors now receive just a 0.90% dividend. The company is expected to lift its $0.225 per share dividend to $0.25. Maxim Group has a $180 target price. The consensus target is just $157, and the shares closed on Friday at $165.24.
This is a strong, large-cap play for investors looking for exposure to semiconductor capital equipment. KLA Corp. (NASDAQ: KLAC) designs, manufactures and markets process control and yield management solutions worldwide.
It offers chip manufacturing products, such as front-end defect inspection tools, defect review systems, advanced packaging process control systems, metrology solutions, in-situ process monitoring products and lithography software. Its wafer manufacturing products comprise surface and defect inspection, wafer geometry and nanotopography metrology, and data management, and its reticle manufacturing products include defect inspection and pattern placement metrology products.
The company also provides light emitting diode (LED), power device and compound semiconductor manufacturing products, consisting of patterned wafer inspection, defect inspection, surface metrology and data management products. It offers thin-film head metrology and inspection, virtual lithography, in-situ process monitoring, transparent and metal substrate inspection and data management products for data storage media/head manufacturing, as well as stylus and optical profiling and optical inspection products for microelectromechanical systems manufacturing, and products for general purpose/lab applications.
Shareholders currently receive a 1.08% dividend. The expected dividend hike is to $1.45 per share from $1.30. J.P. Morgan’s $560 price objective on KLA stock is well above the $521.47 consensus target and Friday’s close at $496.47.
Martin Marietta Materials
This company remains a favorite across Wall Street, especially while infrastructure concerns are ongoing. Martin Marietta Materials Inc. (NYSE: MLM) is a natural resource-based building materials company, supplying aggregates and heavy-side building materials to the construction industry in the United States and internationally.
The company offers crushed stone, sand and gravel products; ready mixed concrete and asphalt; paving products and services; and Portland and specialty cement used in infrastructure projects, and nonresidential and residential construction markets, as well as in the railroad, agricultural, utility and environmental industries.
Martin Marietta also manufactures and markets magnesia-based chemical products for industrial, agricultural and environmental applications, as well as dolomitic lime primarily for customers in the steel and mining industries. Its chemical products are used in flame retardants, wastewater treatment, pulp and paper production and other environmental applications.
The company remains upbeat not just on 2021 construction demand, but also noted many states with its greatest exposure were well positioned for housing and public non-residential construction growth.
The current dividend yield is 0.58%, but the $0.66 per share payout is expected to rise to $0.70. Martin Marietta Materials stock $550 price target at Truist Financial. The consensus target is $504.81, and shares closed at $455.85 on Friday.
This is another top company with shares closing in on a 52-week high. Nordson Corp. (NASDAQ: NDSN) engineers, manufacture, and markets products and systems to dispense, apply, and control adhesives, coatings, polymers, sealants, biomaterials and other fluids worldwide.
Its Industrial Precision Solutions segment provides dispensing, coating and laminating systems for adhesives, lotions, liquids and fibers to disposable products and roll goods; automated adhesive dispensing systems used in packaged goods industries; components and systems used in the thermoplastic and biopolymer melt stream; and product assembly systems for use in paper and paperboard converting applications and manufacturing roll goods, as well as for the assembly of plastic, metal and wood products. It also offers automated and manual dispensing products and systems for cold materials, container coating, liquid finishing and powder coating, as well as ultraviolet equipment used primarily in curing and drying operations.
The Medical and Fluid Solutions segment offers medical devices, including cannulas, catheters and medical balloons; single-use plastic components; precision manual and semi-automated dispensers; minimally invasive interventional delivery devices; and plastic molded syringes, cartridges, tips and fluid connection components.
The Advanced Technology Solutions segment provides automated dispensing systems for the attachment, protection and coating of fluids, as well as related gas plasma treatment systems for cleaning and conditioning surfaces. It offers bond testing and automated optical, acoustic microscopy and X-ray inspection systems for use in semiconductor and printed circuit board industries. The company markets its products through direct sales force, as well as distributors and sales representatives.
Nordson stock investors currently receive a 1.06% dividend. The expected dividend boost is to $0.74 per share from $0.65. The $290 Wells Fargo target price is a Wall Street high. The $259.33 consensus target is closer to Friday’s closing share price of $246.42.
These four top stocks are rated Buy across Wall Street, and the companies are expected to lift the dividends they pay to shareholders. 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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