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.
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.
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