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, which 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%: a 10% for the increase in stock price and 3% for the dividends paid.
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Four top companies are expected to raise their dividends this week, so we screened our 24/7 Wall St. research universe and found that all are rated Buy at some of the top analysts. While it is always possible that not all of them do indeed raise their dividends, analysts expect them to, and the data is based generally on past increases in the firm’s dividend payouts.
It is important to remember, though, that no single analyst report should be used in making a buying or selling decision.
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Atmos Energy
This utility stock is perfect for conservative investors looking for income. Atmos Energy Corp. (NYSE: ATO) engages in the regulated natural gas distribution and pipeline and storage businesses in the United States. It operates in two segments.
The Distribution segment is involved in the regulated natural gas distribution and related sales operations in eight states. This segment distributes natural gas to approximately 3 million residential, commercial, public authority and industrial customers. As of September 30, 2020, it owned 71,558 miles of underground distribution and transmission mains.
The Pipeline and Storage segment engages in the pipeline and storage operations. This segment transports natural gas for third parties and manages five underground storage reservoirs in Texas. It also provides ancillary services to the pipeline industry, including parking arrangements, lending and inventory sales. As of September 30, 2020, it owned 5,684 miles of gas transmission lines.
Shareholders currently receive a 2.66% yield. The company is expected to raise the dividend to $0.665 per share from $0.625.
Morgan Stanley recently boosted its $115 target price to $125, well above the consensus target of $107.56. Friday’s closing print was $93.99.
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HP
This legacy Silicon Valley pioneer has purchased 24% of its own stock over the past 12 months. HP Inc. (NYSE: HPQ | HPQ Price Prediction) provides personal computing and other access devices, imaging and printing products and related technologies, solutions and services in the United States and internationally.
HP serves individual consumers, small and medium-sized businesses and large enterprises, including customers in the government, health and education sectors. The company operates through three segments.
HP’s Personal Systems segment offers commercial and consumer desktop and notebook personal computers, workstations, thin clients, commercial mobility devices, retail point-of-sale systems, displays and other related accessories, software, support and services. The Printing segment provides consumer and commercial printer hardware, supplies, solutions and services, as well as scanning devices. And the Corporate Investments segment includes HP Labs and business incubation projects.
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HP shareholders now receive a 2.43% yield. The dividend is expected to rise to $0.29 per share from $0.25.
Loop Capital’s huge $50 price target is much higher than the $33.05 consensus target. The final trade on Friday was reported at $31.95.
Motorola Solutions
This stock has performed well this year and remains a Wall Street favorite. Motorola Solutions Inc. (NYSE: MSI) is a provider of communication infrastructure, devices, accessories, software and services. The company operates through two segments.
The Products segment has two product lines: Devices and Systems. The primary customers of the Products segment are government, public safety and first-responder agencies, municipalities and commercial and industrial customers operating private communications networks and manage a mobile workforce.
The Services segment provides a range of service offerings for government, public safety and commercial communication networks. This segment’s product lines include Integration services, Managed & Support services and Integrated Digital Enhanced Network.
The current yield is 1.15%. The $0.71 per share dividend is expected to increase to $0.79.
The $303 Credit Suisse price target compares with a $257 consensus target, which is closer to Friday’s closing share price of $247.44.
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Royal Gold
This is a solid company for investors looking for a gold position with somewhat less risk. Royal Gold Inc. (NASDAQ: RGLD) acquires and manages precious metal streams, royalties and related interests. It focuses on acquiring stream and royalty interests or financing projects that are in production or in development stage in exchange for stream or royalty interests, which primarily consists of gold, silver, copper, nickel, zinc, lead and cobalt
As of June 30, 2021, the company owned interests in 187 properties on five continents, including interests on 41 producing mines and 17 development stage projects. Its stream and royalty interests on properties are located in Australia, Canada, Chile, Dominican Republic, Mexico, the United States and elsewhere.
Shareholders currently receive a 1.14% yield. The company is expected to raise the dividend by a nickel per share to $0.35.
Raymond James has set a $136 price target. The consensus target is $138.40, and the stock was recently trading at $105.16.
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These four top companies are expected to lift the dividends they pay to shareholders, and their stocks are rated Buy across Wall Street. 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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