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5 Buy-Rated Blue Chip Stocks With Dividends Expected to Rise This Week
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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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Five 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.
Eastman Chemical
This stock has rallied smartly of the 2021 lows and is an awesome safe haven for conservative investors. Eastman Chemical Co. (NYSE: EMN) engages in the provision of specialty chemicals. It operates through the following segments.
The Additives and Functional Products segment includes chemicals for products in the transportation, consumables, building and construction, animal nutrition, crop protection, energy, personal and home care, and other markets. The Fiber segment offers cellulose acetate tow for use in filtration media, primarily cigarette filters.
The Advanced Materials segment of Eastman Chemical produces and markets its polymers, films and plastics with differentiated performance properties for value-added end uses in transportation, consumables, building and construction, durable goods, and health and wellness markets.
The Chemical Intermediates segment consists of large-scale and vertical integration from the cellulose and acetyl, olefins and alkylamines streams to support operating segments with advantaged cost positions.
Shareholders currently receive a 2.50% annual dividend. The company is expected to raise the dividend to $0.75 per share from $0.69.
Wells Fargo has a $142 price target on Eastman Chemical stock, while the consensus target is $130. Shares closed trading on Friday at $110.50.
Fortune Brands Home & Security
With construction and new homes still booming, this is another great value play. Fortune Brands Home & Security Inc. (NYSE: FBHS) provides home and security products for residential home repair, remodeling, new construction and security applications.
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Its Plumbing segment manufactures, assembles and sells faucets, accessories, kitchen sinks and waste disposals in the United States, China, Canada, Mexico, Southeast Asia, Europe and South America directly through its own sales force, as well as through independent manufacturers’ representatives to wholesalers, home centers, mass merchandisers and industrial distributors.
The Outdoors & Security segment offers fiberglass and steel entry door systems under the Therma-Tru brand; storm, screen and security doors under the Larson brand; composite decking and railing under the Fiberon brand; and urethane millwork under the Fypon brand. This segment also manufactures, sources and distributes locks, safety and security devices, and electronic security products under the Master Lock and American Lock brands; and fire-resistant safes, security containers and commercial cabinets under the SentrySafe brand.
Shareholders receive a 1.01% annual dividend, but the $0.26 per share dividend is expected to rise to $0.32.
The BofA Securities price target is $127, while the consensus target is $118.43. The shares closed on Friday at $102.93.
24/7 Wall St.McCormick
Those who spend time cooking in the kitchen use the products this company makes all the time. McCormick & Co. Inc. (NYSE: MKC) manufactures, markets and distributes spices, seasoning mixes, condiments and other flavorful products to the food industry.
The company’s Consumer segment offers spices, herbs and seasonings, as well as desserts. This segment markets its products under the McCormick, French, Frank’s RedHot, Lawry’s, Gourmet Garden, Club House, and Old Bay brands in the Americas; Ducros, Schwartz, Kamis, Drogheria & Alimentari, and Vahiné brand names in Europe, the Middle East and Africa; McCormick and DaQiao brands in China; and McCormick, Aeroplane and Gourmet Garden brand names in Australia. It also markets regional and ethnic brands, such as Zatarain’s, Stubb’s, Thai Kitchen and Simply Asia.
The company also supplies its products under the private labels. This segment serves retailers, including grocery, mass merchandise, warehouse clubs, discount and drug stores and e-commerce retailers, directly and indirectly through distributors or wholesalers.
McCormick stock investors now receive a 1.59% yield. The dividend is expected to increase by three cents per share to $0.37.
The $98 Credit Suisse price target is well above the $88.29 consensus target. Shares closed at $85.54 on Friday.
Merck
This remains a leading health care stock for conservative investors. Merck & Co. Inc. (NYSE: MRK) offers therapeutic and preventive agents to treat cardiovascular issues, type 2 diabetes, asthma, nasal allergy symptoms, allergic rhinitis, chronic hepatitis C virus, HIV-1 infection, fungal infections, intra-abdominal infections, hypertension, arthritis and pain, inflammatory, osteoporosis, male pattern hair loss and fertility diseases.
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The company also provides neuromuscular blocking agents for use in surgery, anti-bacterial products for skin and skin structure infections, cholesterol modifying medicines, non-sedating antihistamine and vaginal contraceptive products.
Shareholders currently receive a 3.28% yield. The $0.65 per share dividend is expected to rise to $0.70.
SVB Leerink has a Wall Street high $105 target. The consensus price target on Merck stock is $95.42. The shares fell almost 4% on Friday to close at $79.16.
24/7 Wall St.Stryker
This leading medical devices company is a big beneficiary in the aging of America thesis. Stryker Corp. (NYSE: SYK) operates through three segments, including its Orthopedics segment, which provides implants for use in hip and knee joint replacements and in trauma and extremities surgeries.
The MedSurg segment offers surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, and other medical device products that are used in various medical specialties.
The Neurotechnology and Spine segment provides neurotechnology products, including those used for minimally invasive endovascular techniques; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; and minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke.
Shareholders now receive a 1.03% yield. Analysts expect the company to raise the dividend by six cents per share to $0.69.
Morgan Stanley just lifted its $295 target price on Stryker stock to $305. The consensus target is just $285.86, and the closing share price was $243.48 on Friday.
These five 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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