After years of a low interest rate environment, which has reversed in a big way over the past 16 months, many investors continue to turn 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.
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. We screened our 24/7 Wall St. research universe and found that all are rated Buy at some of the top Wall Street firms. While it is always possible that not all five do raise their dividends, top analysts expect them to. Generally, the data is based on past increases in each 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.
Diamondback Energy
This red-hot energy play looks poised to press higher again. Diamondback Energy Inc. (NASDAQ: FANG) is an independent oil and natural gas company focused on the acquisition, development, exploration and exploitation of unconventional and onshore oil and natural gas reserves in the Permian Basin in West Texas and New Mexico.
Diamondback Energy primarily focuses on the development of the Spraberry and Wolfcamp formations of the Midland basin, as well as the Wolfcamp and Bone Spring formations of the Delaware basin, which are part of the Permian Basin.
The company also owns, operates, develops and acquires midstream infrastructure assets, including 770 miles of crude oil gathering pipelines, natural gas gathering pipelines and an integrated water system in the Midland and Delaware Basins of the Permian Basin.
Investors receive a 6.24% dividend, which is of the variable variety, which means it could change depending on production and profits. The company is expected to lift the dividend in a big way, from $0.80 to $1.03.
The $190 Raymond James target price accompanies a Strong Buy rating. Diamondback Energy stock has a consensus target of $167.59, and the closing share price on Friday was $145.64.
KLA
This is a strong large-cap play for investors looking for exposure to capital equipment. KLA Corp. (NASDAQ: KLAC) designs, manufactures and markets process control and yield management solutions worldwide.
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Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.
