After years of a low interest rate environment (though rates have been trending higher over the past year), 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 higher, these companies still make sense for investors looking for solid growth and income potential.
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.
Three 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 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.
Altria
This maker of tobacco products offers value investors a great entry point now as it has been hit as cigarette sales have slowed. Altria Group Inc. (NYSE: MO) manufactures and sells smokeable and oral tobacco products in the United States.
The company provides cigarettes primarily under the Marlboro brand; cigars and pipe tobacco principally under the Black & Mild brand; moist smokeless tobacco products and snus products under the Copenhagen, Skoal, Red Seal and Husky brands; and on! oral nicotine pouches. It sells its tobacco products primarily to wholesalers, including distributors, and large retail organizations, such as chain stores.
Altria also owns over 10% of Anheuser-Busch InBev, the world’s largest brewer, which some feel is worth more than $10 billion and may be a segment of the company that could be sold. Given the issues the brewer has had this year, it may indeed be a candidate to be sold.
Investors currently receive an 8.56% dividend, and the company is expected to raise the $0.94 per share dividend to $0.98. Stifel has a $52 target price on Altria stock, while the consensus target is $45.09. The shares closed on Friday at $43.73.
Intuit
This company hits all the metrics in the technology sector for accounting needs. Intuit Inc. (NASDAQ: INTU) provides financial management and compliance products and services for consumers, small businesses, self-employed and accounting professionals in the United States and internationally.
Intuit’s Small Business & Self-Employed segment provides QuickBooks online services and desktop software solutions, comprising QuickBooks Online Advanced, a cloud-based solution; QuickBooks Enterprise, a hosted solution; QuickBooks Self-Employed solution; and QuickBooks Online Accountant and QuickBooks Accountant Desktop Plus solutions.
This segment also offers payroll solutions, such as online payroll processing, direct deposit of employee paychecks, payroll reports, electronic payment of federal and state payroll taxes, and electronic filing of federal and state payroll tax forms. And it also offers payment-processing solutions, including credit and debit cards, and ACH payment services, as well as financial supplies and financing for small businesses.
The Consumer segment provides TurboTax income tax preparation products and services, as well as personal finance. The Credit Karma segment offers consumers a personal finance platform that provides personalized recommendations of home, auto and personal loans, as well as credit cards and insurance products.
The ProConnect segment provides Lacerte, ProSeries and ProFile desktop tax-preparation software products and ProConnect Tax Online tax products, electronic tax filing service and bank products and related services.
The company sells products and services through various sales and distribution channels, including multichannel shop-and-buy experiences, websites and call centers, mobile application stores, and retail and other channels.
Shareholders now receive a dividend of 0.63%. The $0.78 per share payout is expected to rise to $0.88. Mizuho’s $550 target price is well above the $504.32 consensus target. Friday’s closing share price was $497.77.
Virtus Investment Partners
This money manager could be a great idea for investors looking to add a financial idea that is not a bank or major brokerage firm. Virtus Investment Partners Inc. (NASDAQ: VRTS) is a publicly owned investment manager that primarily provides its services to individual and institutional clients. It launches separate client-focused equity and fixed-income portfolios, as well as equity, fixed-income and balanced mutual funds for its clients.
The company invests in the public equity, fixed-income and real estate markets. The firm also invests in exchange-traded funds. It employs a multi-manager approach for its products and quantitative analysis to make its investments. It benchmarks the performance of its portfolios against the S&P 500 Index. The firm conducts in-house research to make its investments.
The current yield is 3.09%, but the dividend is expected to increase to $1.80 per share from $1.65. The Piper Sandler price target is $260. The consensus target is just $216.50, and Friday’s close was at $200.46
These three 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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