After years of a low interest rate environment, which now is trending higher, many investors have turned to equities, not only for the growth potential but also for the 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. While interest rates are rising, these companies still make sense for investors looking for solid growth and income potential.
[in-text-ad]
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%. That is, 10% for the increase in stock price and 3% for the dividends paid.

Four top companies that are Wall Street favorites are expected to raise their dividends this week. We screened our 24/7 Wall St. research universe and found that all are rated Buy at some of the top firms on Wall Street. While it is always possible that not all five do raise their dividends, top analysts expect them to, generally 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.

Caterpillar

This large cap leader is one of the top infrastructure ideas across Wall Street. Caterpillar Inc. (NYSE: CAT) is the world’s largest manufacturer and marketer of construction equipment, and it is also a leading manufacturer of diesel engines and turbines for transport and industrial applications.

Caterpillar is the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. The company principally operates through its three primary segments (Construction Industries, Resource Industries and Energy & Transportation) and also provides financing and related services through its Financial Products segment.

Investors now receive a dividend of 1.99%. The company is expected to raise the dividend to $1.20 per share from $1.11. Baird recently reiterated its Outperform rating and has a Wall Street high $280 target price objective. Caterpillar stock has a consensus price target of $235.44. The shares closed on Friday at $222.90.

The stock was a big winner during the initial stages of the pandemic but has sold off big-time and is offering the best entry point in over a year. Clorox Co. (NYSE: CLX) manufactures and markets consumer and professional products worldwide.
[in-text-ad]
The Health and Wellness segment offers cleaning products, such as laundry additives and home care products primarily under the Clorox, Clorox2, Scentiva, Pine-Sol, Liquid-Plumr, Tilex and Formula 409 brand names. It offers professional cleaning and disinfecting products under the CloroxPro, Clorox Healthcare and Clorox Total 360 brand names; professional foodservice products under the Hidden Valley brand name; and vitamins, minerals and supplement products under the RenewLife, Natural Vitality, NeoCell and Rainbow Light brand names in the United States.

The Household segment provides cat litter products under the Fresh Step, Scoop Away and Ever Clean brand names; bags and wraps under the Glad brand name; and grilling products under the Kingsford and Kingsford Match Light brand names in the United States. The Lifestyle segment offers dressings, dips, seasonings and sauces, primarily under the Hidden Valley brand name. Its natural personal care products are under the Burt’s Bees brand name, and its water-filtration systems and filters are under the Brita brand name in the United States.

Clorox stock investors currently receive a 3.34% dividend. The dividend is expected to rise to $1.20 a share from $1.16. The Deutsche Bank price target of $146 is well above the $137.20 consensus target and Friday’s close at $138.88.

Essential Properties Realty Trust

This real estate investment trust offers a degree of inflation protection and a strong dividend. Essential Properties Realty Trust Inc. (NYSE: EPRT) acquires, owns and manages single-tenant properties in the United States.

The company leases its properties to middle-market companies, such as restaurants, car washes, automotive services, medical and dental services, convenience stores, equipment rental, entertainment, early childhood education, grocery and health and fitness on a long-term basis.

As of December 31, 2021, it had a portfolio of 1,451 properties. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders

Investors receive a 4.51% dividend. The $0.26 per share dividend is expected to increase to $0.27. The $30 Raymond James price objective compares with a $29.32 consensus target. Essential Properties Realty Trust stock closed on Friday at $23.08.

A whopping 45% of fund managers recently surveyed have bought shares of this company. UnitedHealth Group Inc. (NYSE: UNH) operates through the following four segments.
[in-text-ad]
Its UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, midsized employers, small businesses and individuals; health and well-being services to individuals age 50 and older, addressing their needs for preventive and acute health care services, as well as services dealing with chronic disease and other specialized issues for older individuals; and Medicaid plans, Children’s Health Insurance Program, and health care programs; and health and dental benefits.

The OptumHealth segment provides access to networks of care provider specialists, health management services, care delivery, consumer engagement and financial services. This segment serves individuals through programs offered by employers, payers, government entities and directly with the care delivery systems.

The OptumInsight segment offers software and information products, advisory consulting arrangements, and services outsourcing contracts to hospital systems, physicians, health plans, governments, life sciences companies and other organizations.

OptumRx is the segment that provides pharmacy care services and programs, including retail network contracting, home delivery, specialty and compounding pharmacy, and purchasing and clinical. It also develops programs in areas such as step therapy, formulary management, drug adherence and disease/drug therapy management.

Shareholders are paid a 1.19% dividend. The $1.45 per share is expected to rise to $1.65. Raymond James has set a $620 target price on UnitedHealth stock. The consensus target is just $566.70, and the shares ended Friday’s trading session at $485.61.

Get Our Free Investment Newsletter

I have read, and agree to the Terms of Use

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 shows that the company is doing well and has the earnings and cash flow strength to increase the payouts.

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.