5 Top Stocks to Buy Now With Expected Dividend Hikes This Week
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.
Five top 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 at some of the top analysts. While it is always possible that not all four do indeed raise their dividends, analysts expect them to, and generally the data is based 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.
American Electric Power
This industry-leading utility is also a solid dividend-paying company. American Electric Power Co. Inc. ( NYSE: AEP ) is one of the largest electric utilities in the United States, delivering electricity to more than 5.4 million customers in 11 states.
The company ranks among the nation's largest generators of electricity, owning nearly 38,000 megawatts of generating capacity in the United States. It also owns the nation's largest electricity transmission system, a more than 40,000-mile network that includes more 765-kilovolt extra-high voltage transmission lines than all other U.S. transmission systems combined.
Many on Wall Street feel that the stock trades at a discount to its utility peers, and they feel it deserves a premium. Top analysts also think the company may sell generating assets and buy back shares with the proceeds, which also will be accretive.
Shareholders currently receive a 3.55% yield. The company is expected to raise its dividend to $0.79 per share from $0.74.
Morgan Stanley has a price target of $110 on American Electric Power stock, while the consensus target is $97.59. Shares were trading early Monday near $83.
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This is a solid pick for growth investors, as it is a favorite long-term idea across Wall Street. Amphenol Corp. ( NYSE: APH ) primarily designs, manufactures and markets electrical, electronic and fiber-optic connectors in the United States and internationally.
The Interconnect Products and Assemblies segment offers connector and connector systems, including fiber-optic, harsh environment, high-speed and radio frequency interconnect products, as well as antennas. It offers power interconnect products, busbars and distribution systems, as well as other connectors. It also provides value-add products, such as backplane interconnect systems, cable assemblies and harnesses, and cable management products. Other products include antennas, flexible and rigid printed circuit boards, hinges, molded parts and production-related products.
The Cable Products and Solutions segment offers coaxial, power, and specialty cables; cable assemblies; and components, including combiner/splitter products, connector and connector systems and fiber-optic components. The company sells its products through its sales force, independent representatives and a network of electronics distributors to original equipment manufacturers, electronic manufacturing services companies, original design manufacturers and service providers in the automotive, broadband communication, commercial aerospace, industrial, information technology and data communication, military, mobile device and mobile network markets.
Shareholders currently receive a 0.75% yield. The company is expected raise the $0.145 per share dividend to $0.17.
The Jefferies price target is $88, and the consensus target for Amphenol stock is $79.92. The shares were trading above $76 on Monday morning.
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This company has been making some of the best products in the boating world for years. Brunswick Corp. ( NYSE: BC ) designs, manufactures and markets recreation products worldwide. Its Propulsion segment provides outboard, sterndrive and inboard engines for independent boatbuilders and governments through marine dealers and distributors, specialty marine retailers and marine service centers. It also provides propulsion-related controls, rigging and propellers to original equipment manufacturers and aftermarket retailers, distributors and distribution businesses.
The Parts & Accessories segment provides engine parts and consumables, electrical products, boat parts and systems, engine oils and lubricants, marine electronics and control systems, instruments, trolling motors, fuel systems and electrical systems, as well as specialty vehicle, mobile, and transportation aftermarket products for aftermarket retailers, distributors and distribution businesses, as well for as for the original equipment manufacturers in marine and non-marine markets. It supplies parts and accessories through the distribution business.
The Boat segment provides Sea Ray sport boats and cruisers; Bayliner sport cruisers and runabouts; Boston Whaler fiberglass offshore boats; Lund fiberglass fishing boats; Crestliner, Cypress Cay, Harris, Lowe, Lund and Princecraft aluminum fishing, utility, pontoon and deck boats; Heyday tow/wake boats; and Thunder Jet heavy-gauge aluminum boats. It also offers shared access boat club and dealer services to the marine industry through dealers and distributors.
The current dividend yield is 1.33%. The $0.335 per share dividend is expected to rise to $0.36.
The $135 B. Riley Securities price target is well above the $122.23 consensus target. Brunswick stock was trading near $100 a share on Monday.
Crown Castle International
Shares of this top cell tower company offer incredible growth and income possibilities. Crown Castle International Corp. ( NYSE: CCI ) is one of the largest U.S. wireless tower companies, with over 40,000 towers and approximately 80,000 route miles of fiber supporting small cells and fiber solutions across every major U.S. market. The core business for the company is leasing space on its wireless towers primarily to wireless carriers, government agencies and broadband data providers.
Crown Castle is one of the best stocks in the group for more conservative investors as the high-yield distribution and low volatility make it a good holding for accounts seeking growth and income with less risk.
Crown Castle stock currently comes with a 3.15% dividend yield. The company is expected to raise the dividend to $1.43 per share from $1.33.
Morgan Stanley has set a $213 price target, while the consensus target is $198.83. The shares were trading on Monday near $168.
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This smaller cap bank could be an outstanding addition for more aggressive investors, especially after the big boys posted solid results last week. Huntington Bancshares Inc. ( NASDAQ: HBAN ) operates as a holding company for the Huntington National Bank, which provides commercial, small business, consumer and mortgage banking services.
The company's Retail and Business Banking segment offers financial products and services, including checking accounts, savings accounts, money market accounts, certificates of deposit, consumer loans and small business loans, as well as investments, insurance, interest rate risk protection and foreign exchange and treasury management services.
The company's Commercial Banking segment provides corporate risk management and institutional sales, trading, and underwriting services; commercial property and casualty, employee benefits, personal lines, life and disability, and specialty lines of insurance; and brokerage and agency services for residential and commercial title insurance, as well as excess and surplus product lines of insurance. Huntington also offers automotive and commercial real estate financing and a regional private bank and private client business.
Shareholders currently are paid a 3.72% yield. The dividend is expected to tick up by a penny per share to $0.16.
The Raymond James target price for Huntington Bancshares is $20. The consensus figure is $17.58, and the stock was trading above $16.
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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.