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.
We always like to remind our readers about the impact total return can have 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 the 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.
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Six companies are expected to hike their dividends this week, all of them are rated Buy at some of the top firms on Wall Street. While it is always possible that not all six do raise their dividends, leading analysts and pundits 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.
Mondelez
This consumer sector giant makes good sense for conservative investors. Mondelez International Inc. (NASDAQ: MDLZ | MDLZ Price Prediction) manufactures and markets snack food and beverage products worldwide. It offers biscuits, including cookies, crackers and salted snacks; chocolates, and gums and candies; powdered beverages and coffee; and cheese and grocery products.
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Its primary brand portfolio includes LU, Nabisco and Oreo biscuits; Cadbury, Cadbury Dairy Milk and Milka chocolates; Trident gum; Jacobs Kaffee; and Tang powdered beverages.
Mondelez sells its products to supermarket chains, wholesalers, supercenters, club stores, mass merchandisers, distributors, convenience stores, gasoline stations, drug stores, value stores and other retail food outlets through direct store delivery, company-owned and satellite warehouses, distribution centers and other facilities, as well as through independent sales offices and agents.
Shareholders currently receive a 1.98% dividend. The company is expected to raise the dividend to $0.35 per share from $0.315.
BofA Securities has a $70 price target for the stock, while the Wall Street consensus target is $69.17. Mondelez stock began trading on Monday at $64.79 a share.
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MSCI
Shares of this somewhat off-the-radar company offer solid upside potential. MSCI Inc. (NYSE: MSCI) engages in the provision of investment decision support tools including, indices, portfolio risk and performance analytics and corporate governance products and services.
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The company operates through the following business segments. The Index segment is involved in the index-linked product creation and performance benchmarking, as well as portfolio construction and rebalancing and asset allocation. The Analytics segment offers risk management, performance attribution and portfolio management content, applications and services.
The Environmental, Social and Governance (ESG) segment offers products and services that help institutional investors understand how ESG factors can impact the long-term risk of investments. The Real Estate segment includes research, reporting, market data and benchmarking offerings that provide real estate performance analysis for funds, investors and managers. While the Burgiss segment provides investment decision support tools for private capital.
Shareholders receive a 0.54% dividend. The company is expected to raise the dividend to $0.88 per share from $0.78.
Royal Bank of Canada’s $600 price target is well above the $552.44 consensus target. Monday’s opening trade for MSCI stock was at $574.21.
Skyworks
Many Wall Street analysts favor this company, as they see it as a smartphone content and infrastructure provider. Skyworks Solutions Inc. (NASDAQ: SWKS) designs, develops, manufactures and markets proprietary semiconductor products, including intellectual property worldwide.
The company’s product portfolio includes amplifiers, antenna tuners, attenuators, circulators/isolators, DC/DC converters, demodulators, detectors, diodes, directional couplers, diversity receive modules, filters, front-end modules, hybrids, LED drivers, low noise amplifiers, mixers, modulators, optocouplers/optoisolators, phase-locked loops, phase shifters, power dividers/combiners, receivers, switches, synthesizers, technical ceramics, voltage-controlled oscillators/synthesizers and voltage regulators, as well as wireless radio integrated circuits.
Skyworks provides its products for use in the aerospace, automotive, broadband, cellular infrastructure, connected home, industrial, medical, military, smartphone, tablet and wearable markets.
Shareholders now receive a 1.04% dividend. The company is expected to raise the $0.50 per share dividend to $0.56.
The $225 KeyCorp price target compares with a consensus target for Skyworks Solutions stock of $206.19. Shares opened on Monday at $192.27 apiece.
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Weingarten Realty
This real estate giant is a very timely buy and has always provided solid dividend coverage. Weingarten Realty Investors (NYSE: WRI) is a Houston-based real estate investment trust (REIT) that owns mainly neighborhood and community shopping centers.
Its portfolio includes 170 properties located in 17 states spanning the country from coast to coast. These properties represent approximately 33.0 million square feet, of which Weingarten interests in these properties aggregated is approximately 21.5 million square feet of leasable area.
Shareholders receive a 2.87% dividend. Weingarten Realty Investors is expected to raise the dividend from $0.23 per share to $0.30.
Baird’s $29 price target looks to be going higher, as the posted consensus target is $31. The shares opened Monday trading at $32.06.
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Wells Fargo
This large-cap bank is perhaps one of the best value plays for the rest of 2021, and it reported solid second-quarter results. Wells Fargo & Co. (NYSE: WFC) is a nationwide, diversified, community-based financial services company with $1.9 trillion in assets.
The company provides banking, insurance, investments, mortgage and consumer and commercial finance through 8,700 locations, 12,800 ATMs, the Internet and mobile banking. It also has offices in 36 countries to support customers who conduct business in the global economy. Wells Fargo serves one in three households in the United States.
Shareholders receive a 0.90% dividend. Analysts expected the company to raise its dividend to $0.20 per share from $0.10.
BofA Securities has set a street-high $60 price target. The consensus target is $49.39, and Wells Fargo stock opened at $44.47 on Monday.
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Wingstop
This stock has huge upside potential, and with the NFL season right around the corner, you can bet the orders will skyrocket. Wingstop Inc. (NASDAQ: WING) operates and franchises more than 1,500 locations worldwide.
The company is dedicated to serving the world flavor through an unparalleled guest experience and offering of classic wings, boneless wings and tenders, always cooked to order and hand-sauced-and-tossed in fans’ choice of 11 bold, distinctive flavors. Wingstop’s menu also features signature sides including fresh-cut, seasoned fries and freshly made ranch and bleu cheese dips.
Top analysts feel that Wingstop is still in the early innings of a long-term growth story, as the company has a strong, digitally focused foundation to support unit growth. Wingstop is 98% franchised, with around 1,500 units globally (1,300 domestic, 200 international) and some of the best unit-level economics in the industry lending support to franchisee demand.
Shareholders are paid a 0.35% dividend. The company is expected to raise its dividend to $0.17 per share from $0.14.
Baird has a $185 price target on Wingstop stock. The $170.47 consensus target is near Monday’s open at $169.63 a share.
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Again, shares of these six top companies are rated Buy across Wall Street, and each company is expected to lift what it pays to shareholders this week. 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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