After years of low interest rates, which have been trending much higher over the past year, many investors have turned to equities not only for the growth potential but also for solid and dependable dividends, which help to provide an income stream. This is total return, which is one of the most powerful investment strategies. While interest rates are rising, these companies still make sense for investors looking for solid growth and income potential.
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Remember 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 increases to $22 in a year, your total return is 13%: 10% for the increase in stock price and 3% for the dividends paid.
The following four Wall Street favorites are expected to raise their dividends this week. We screened our 24/7 Wall St. research universe and found that they are rated Buy at some of the top firms on Wall Street. While it is always possible that not all four do raise their dividends, top analysts expect them to, 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.
American Financial Group
This old-school heartland insurance leader is offering investors an outstanding entry point as the sector has struggled. American Financial Group Inc. (NYSE: AFG) is an insurance holding company that provides specialty property and casualty insurance products in the United States.
It offers property and transportation insurance products, such as physical damage and liability coverage for buses and trucks, inland and ocean marine, agricultural-related products, and other commercial property and specialty transportation coverages; specialty casualty insurance, including primarily excess and surplus, executive and professional liability, general liability, umbrella and excess liability and specialty coverage in targeted markets, as well as customized programs for small to midsized businesses and workers’ compensation insurance; and specialty financial insurance products comprising risk management insurance programs for lending and leasing institutions, fidelity and surety products, and trade credit insurance.
The company sells its property and casualty insurance products through independent insurance agents and brokers.
American Financial Group stock investors currently receive a dividend of 2.26%. It is expected to raise the payout from $0.63 per share to $0.69.
Piper Sandler has a $150 target price objective, while the consensus target is $133.25. The shares closed trading on Friday at $111.67.
Bank OZK
Formerly known as Bank of the Ozarks, this regional banking leader is a top total return idea. Bank OZK (NASDAQ: OZK) provides various retail and commercial banking services. The company accepts various deposit products, including non-interest-bearing checking, interest bearing transaction, business sweep, savings, money market, individual retirement and other accounts, as well as time deposits.
Bank OZK also offers real estate, consumer and business purpose, indirect recreational vehicle and marine, commercial and industrial, government guaranteed, agricultural equipment, small business, lines of credit, homebuilder and affordable housing loans; business aviation and subscription financing services; and mortgage and other lending products. In addition, the company provides trust and wealth services, such as personal trusts, custodial accounts, investment management accounts and retirement accounts, as well as corporate trust services, including trustee, paying agent and registered transfer agent services and other related services.
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Further, it offers treasury management services comprising automated clearing house, wire transfer, transaction reporting, wholesale lockbox, remote deposit capture, automated credit line transfer, reconciliation, positive pay, merchant and commercial card, and other services, as well as zero balance and investment sweep accounts. Additionally, the company provides ATMs; telephone, online and mobile banking services; debit and credit cards; safe deposit boxes; and other products and services, as well as processes merchant debit and credit card transactions.
Investors currently receive a dividend of 3.88%, but the $0.36 per share payout is expected to increase by a penny.
Bank OZK stock has a $42 target price at UBS. The consensus target is up $46, but Friday’s final trade was for $37.07 a share.
RPM International
Long-term growth investors will love this stock. RPM International (NYSE: RPM) manufactures, markets, and sells specialty chemicals for the industrial, specialty and consumer markets worldwide. Its products include the following:
- Waterproofing, coatings and institutional roofing systems
- Air barriers, tapes and foams
- Residential home weatherization systems
- Roofing and building maintenance and related services
- Sealing and bonding, and subfloor preparation, flooring, and in-plant glazing solutions
- Solutions for fire stopping and intumescent steel coating
- Rolled asphalt roofing materials and chemical admixtures
- Concrete and masonry admixtures, concrete fibers, curing and sealing compounds, structural grouts and mortars, epoxy adhesives, injection resins, polyurethane foams, floor hardeners and toppings, joint fillers, industrial and architectural coatings, decorative color/stains/stamps and restoration materials
- Insulated building cladding materials and concrete form wall systems
- Polymer flooring systems
- Fiberglass reinforced plastic gratings and shapes
- Corrosion-control coating, containment and railcar lining, fire and soundproofing, and heat and cryogenic insulation products
- Specialty construction products
- Amine curing agents, reactive diluents, specialty epoxy resins and other intermediates
- Fluorescent colorants and pigments
- Shellac-based-specialty and marine coatings
- Fire and water damage restoration, and carpet cleaning and disinfecting products
- Fuel additives
- Wood treatments, furniture finishes and touch-up products
- Nail enamels, polishes and coating components
- Specialty products for paint contractors and the DIYers, concrete restoration and flooring systems, metallic and faux finish coatings, cleaners and hobby paints and cements;
- Caulk, sealant, adhesive, insulating foam, spackling, glazing and patch and repair products
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Shareholders currently receive a 1.94% yield. The expected dividend hike is to $0.44 per share from $0.42.
Deutsche Bank’s $118 price target compares to the consensus target of $108, and RPM International stock closed on Friday at $94.81.
T-Mobile
This top telecom is one of the fastest-growing companies in the sector. T-Mobile US Inc. (NASDAQ: TMUS) provides wireless services for branded postpaid, prepaid and wholesale customers in the United States, Puerto Rico and the U.S. Virgin Islands.
The company offers voice, messaging and data services. It also provides wireless devices, including smartphones, wearables, tablets and other mobile communication devices, as well as accessories, wireline services, financing through equipment installment plans and leasing.
It offers services, devices and accessories under the T-Mobile and Metro by T-Mobile brands through its owned and operated retail stores, T-Mobile app and customer care channels, and its websites. It also sells its devices to dealers and other third-party distributors for resale through independent third-party retail outlets and various third-party websites.
T-Mobile will be paying the first dividend in the company’s history, after announcing that it will make its first quarterly dividend payment of $0.65 per share on December 15. On an annual basis, that will translate to a 1.85% yield.
The $210 TD Cowen target price objective is well above the $177.43 consensus for T-Mobile stock and the most recent close at $140.05.
These four top companies are analysts’ favorites across Wall Street and are expected to increase 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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