Investing
5 'Strong Buy' 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 that 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 top large-cap companies that are Wall Street favorites 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 by some 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.
Air Products
This company has seen some solid insider buying over the past couple of years. Air Products Inc. (NYSE: APD) provides atmospheric gases, process and specialty gases, electronics and performance materials, equipment, and services worldwide.
The company produces atmospheric gases (including oxygen, nitrogen, argon and rare gases), process gases (such as hydrogen, helium, carbon dioxide, carbon monoxide and syngas) and specialty gases). It makes equipment for the production or processing of gases, comprising air separation units and non-cryogenic generators, for customers in various industries, including refining, chemical, gasification, metals, manufacturing, food and beverage, electronics, magnetic resonance imaging, energy production and refining, and metals.
It also designs and manufactures equipment for air separation, hydrocarbon recovery and purification, natural gas liquefaction, and liquid helium and liquid hydrogen transport and storage. The company has a strategic collaboration with Baker Hughes to develop hydrogen compression systems.
Shareholders currently receive a 2.16% dividend. The company is expected to lift the dividend to $1.68 per share from $1.50.
Deutsche Bank has a Wall Street leading $340 target price for Air Products and Chemicals stock. The consensus target is $329.64 shares traded at $277.50 early Monday.
24/7 Wall St.Cigna
This is a solid value buy in the health care sector. Cigna Corp. (NYSE: CI) is a major health services organization that provides insurance and related products and services in the United States and internationally. All products and services are provided exclusively by or through operating subsidiaries of Cigna, including Cigna Health and Life Insurance Company, Life Insurance Company of North America, Cigna Life Insurance Company of Canada and their affiliates.
The health care giant offers an integrated suite of health services, such as medical, dental, behavioral health, pharmacy, vision, supplemental benefits and other related products, including group life, accident and disability insurance. Cigna maintains sales capability in 30 countries and jurisdictions, and it has approximately 86 million customer relationships throughout the world.
Cigna stock investors currently receive a dividend of 1.69%. It is expected that the dividend will jump to $1.20 per share from $1.00.
The Raymond James price target is $275, while the consensus target is $265.56. The shares were trading Friday morning at $231.25.
Corning
This company continues to be a huge player in the fiber optic world. Corning Inc. (NYSE: GLW) is a technology pioneer that manufactures LCD glass for flat-panel displays for multiple product lines.
Telecommunications (30% of sales) produces optical fiber and cable, component hardware and equipment, and photonic components for the telecommunications, CATV and networking industry. In addition, the company’s Environmental Technologies division (12% of sales) produces specialized glass, glass ceramic and polymer-based products for the automotive industry.
Shareholders now receive a 2.41% dividend, but it is expected to rise to $0.26 per share from $0.24.
The $45 BofA Securities target price compares to the consensus figure of $45.92. Corning stock traded at $42.65 early Monday.
Intercontinental Exchange
Trading volume is exploding and looks to continue, and this stock is a great way to play that theme. Intercontinental Exchange Inc. (NYSE: ICE) operates regulated exchanges, clearinghouses and listings venues for commodity, financial, fixed income and equity markets in the United States, the United Kingdom, the European Union, Singapore, Israel and Canada.
The company operates marketplaces for listing, trading and clearing an array of derivatives contracts and financial securities, such as commodities, interest rates, foreign exchange and equities, as well as corporate and exchange-traded funds. Its trading venues include 12 regulated exchanges and six clearinghouses, and it offers futures and options products for energy, agricultural and metals, financial, cash equities and equity, over-the-counter and other markets, as well as listings and data and connectivity services.
Intercontinental Exchange also provides fixed income data and analytic, fixed income execution, CDS clearing, and other multi-asset class data and network services. In addition, the company offers proprietary and comprehensive mortgage origination platform, which serves residential mortgage loans; network and closing solutions that provide customers connectivity to the mortgage supply chain and facilitates the secure exchange of information; data and analytics services; and data as a service for lenders to access data and origination information.
Shareholders currently receive a 1.06% dividend. The company is expected to lift the dividend by three cents per share to $0.36.
Citigroup recently raised its $160 target price to $165. The consensus target for Intercontinental Exchange is $157.81, and shares recently were trading at $124.75.
L3 Harris Technologies
This merged company giant is now the sixth-largest defense company. L3 Harris Technologies Inc. (NYSE: LHX) is an agile global aerospace and defense technology innovator engaged in the provision of defense and commercial technologies across air, land, sea, space and cyber domains.
Its Integrated Mission Systems segment includes intelligence, surveillance and reconnaissance; advanced electro optical and infrared; and maritime power and navigation. The Space and Airborne Systems segment comprises space payloads, sensors and full-mission solutions; classified intelligence and cyber defense; avionics; and electronic warfare.
Top Wall Street analysts have felt for some time that the company is situated well in the high growth buckets of the Defense Department budget, and many believe the business is not as short-cycle as the market historically has perceived. Merger synergies give the business a unique path to cash flow and margin upside, along with above-average revenue growth.
Shareholders receive a 1.87% dividend. A huge dividend hike is expected, from $1.02 to $1.21 per share.
Wolfe Research’s Wall Street high price target on L3 Harris Technologies is $266. The shares have traded as high as $246.08 in the past year but were last seen changing hands at $209.85 apiece.
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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