With rates moving higher over the past year, many investors are looking at short-term Treasury debt, as volatility and a weakening stock market has made some market participants quite nervous. However, many long-term horizon investors still turn 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.
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We like to remind 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%: 10% for the increase in stock price and 3% for the dividends paid.

Five top large-cap companies that are Wall Street favorites are expected to raise their dividends this week. When we screened our 24/7 Wall St. research universe, we found that all are rated Buy at some of the top firms on Wall Street.

While it is always possible that not all of the five do raise their dividends, top analysts expect them to, and the data is based generally 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.

Dollar General

Shares of this low-cost retail store had a big run recently after stellar earnings. Dollar General Corp. (NYSE: DG) provides various merchandise products in the southern, southwestern, Midwestern and eastern United States.

The company offers consumable products, including paper and cleaning products, such as paper towels, bath tissues, paper dinnerware, trash and storage bags, and laundry products; packaged food comprising cereals, canned soups and vegetables, condiments, spices, sugar and flour; and perishables that include milk, eggs, bread, refrigerated and frozen food, beer and wine.

Its consumable products also comprise snacks, such as candies, cookies, crackers, salty snacks and carbonated beverages; health and beauty products, including over-the-counter medicines and personal care products, such as soaps, body washes, shampoos, cosmetics and dental hygiene and foot care products; pet supplies and pet food; and tobacco products.

In addition, Dollar General offers seasonal products, including holiday items, toys, batteries, small electronics, greeting cards, stationery, prepaid phones and accessories, gardening supplies, hardware, and automotive and home office supplies. Its home products include kitchen supplies, cookware, small appliances, light bulbs, storage containers, frames, candles, craft supplies and kitchen, and bed and bath soft goods. As of January 2023, Dollar General operated more than 18,700 stores in 47 states.

Shareholders now receive a 1.01% yield, and the company is expected to lift the dividend to $0.60 per share from $0.55. Piper Sandler has a $275 target price on Dollar General stock. The consensus target is $246.48, and shares closed on Friday at $216.09.

Given the Silicon Valley Bank situation, investors should be cautious when looking at bank stocks, but this one has a long and successful track record. First Bancorp (NASDAQ: FBNC) operates as the bank holding company for First Bank, which provides banking products and services for individuals and small to medium-sized businesses. It accepts deposit products, such as checking, savings and money market accounts, as well as time deposits, including certificates of deposit and individual retirement accounts.
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The company also offers loans for a range of consumer and commercial purposes, comprising loans for business, real estate, personal, home improvement and automobiles, as well as residential mortgages and small business administration loans. It offers accounts receivable financing and factoring, inventory financing and purchase order financing services.

In addition, it provides credit and debit cards, letters of credit and safe deposit box rental services, as well as electronic funds transfer services consisting of wire transfers. It provides internet and mobile banking, cash management, bank-by-phone services and remote deposit capture services. Further, the company offers investment and insurance products, such as mutual funds, annuities, long-term care insurance, life insurance and company retirement plans, as well as property and casualty insurance products, and financial planning services.

Shareholders receive a 2.40% yield, and the company is expected to lift its $0.22 per share dividend to $0.24. The Raymond James target price is $45, but First Bancorp stock has a $47.35 consensus target. The stock closed on Friday at $38.37.

Qualcomm

This stock has traded sideways since November and could be poised to break out when things settle down. Qualcomm Inc. (NASDAQ: QCOM) engages in the development and commercialization of foundational technologies for the wireless industry worldwide.

The Qualcomm CDMA Technologies segment develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies for use in wireless voice and data communications, networking, application processing, multimedia and global positioning system products.

The Qualcomm Technology Licensing segment grants licenses or provides rights to use portions of its intellectual property portfolio, which include various patent rights useful in the manufacture and sale of wireless products comprising products implementing CDMA2000, WCDMA, LTE and OFDMA-based 5G standards and their derivatives.

The Qualcomm Strategic Initiatives segment invests in early-stage companies in various industries (including 5G, artificial intelligence, automotive, consumer, enterprise, cloud and Internet of Things) and investment for supporting the design and introduction of new products and services for voice and data communications, new industries and applications. It also provides development and other services and related products to U.S. government agencies and their contractors.

Investors currently are paid a 2.60% dividend. That $0.75 per share is expected to rise to $0.80. The $165 Credit Suisse price target compares with a $152.23 consensus target, and Qualcomm stock closed at $115.19 on Friday.

For those looking to own shares of a jewelry company, this may be just the right idea. Signet Jewelers Ltd. (NYSE: SIG) engages in the retail sale of diamond jewelry, watches and other products. It operates jewelry stores in malls and off-mall locations, primarily under the Kay Jewelers, Kay Jewelers Outlet, Jared the Galleria of Jewelry, Jared Vault, Zales Jewelers, Zales Outlet, Piercing Pagoda and Peoples Jewelers banners in North America and the H. Samuel and Ernest Jones brands internationally. It also operates online through JamesAllen.com.
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As of January 30, 2021, it operated 2,833 stores and kiosks, which include 2,381 locations in the United States and 100 locations in Canada, as well as 352 stores in the United Kingdom, the Republic of Ireland and the Channel Islands.

The company also is involved in the purchase and conversion of rough diamonds to polished stones, as well as the provision of diamond polishing services.

Signet Jewelers stock investors currently receive a dividend of 1.10%. The $0.20 per share dividend is expected to increase to $0.22. UBS’s $93 price target is well above the consensus $85.50 target and the most recent close at $70.67, which was down close to 2% on the day.

TE Connectivity

This somewhat lesser-known stock is a top pick at Jefferies. TE Connectivity Ltd. (NASDAQ: TE) manufactures and sells connectivity and sensor solutions in Europe, the Americas, the Asia-Pacific and elsewhere. The company operates through the following three segments.

The Transportation Solutions segment provides terminals and connector systems and components, sensors, relays, antennas and application tooling products for use in the automotive, commercial transportation and sensor markets.

The Industrial Solutions segment offers terminals and connector systems and components, and it offers interventional medical components, relays, heat shrink tubing and wires and cables for industrial equipment, aerospace, defense, marine, medical and energy markets.

The Communications Solutions segment supplies electronic components, such as terminals and connector systems and components, relays, heat shrink tubing and antennas for the data and devices, and appliances markets.

TE Connectivity sells its products to approximately 140 countries, primarily through direct sales to manufacturers, as well as through third-party distributors.

TE Connectivity stock currently comes with a 1.75% dividend. Royal Bank of Canada’s target price is $138. The consensus target was last seen at $136.67. The stock closed almost 3% lower on Friday at $124.53.

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These five top stocks are rated Buy across Wall Street, and the companies are expected to lift the dividends they pay to shareholders. 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.

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