Years of a low interest rate environment have reversed over the past 18 months. Yet, many investors continue to turn to equities. They offer not only growth potential but also solid and dependable dividends that help to provide an income stream. What this equates to is total return, one of the most powerful investment strategies.
We like to remind our readers about the impact total return has on portfolios. It is one of the best ways to help improve the chances for overall investing success. 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 large cap companies that are Wall Street favorites are expected to raise their dividends this week. The stocks are rated Buy at some of the top firms on Wall Street. While not all four may raise their dividends, top analysts expect them to. This 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.
Commercial Metals
This top stock has backed up some recently and is offering an outstanding entry point. Commercial Metals Co. (NYSE: CMC) manufactures, recycles and fabricates steel and metal products in the United States, Poland, China and elsewhere.
The company processes and sells ferrous and nonferrous scrap metals to the following:
- Steel mills and foundries
- Aluminum sheet and ingot manufacturers
- Brass and bronze ingot makers
- Copper refineries and mills
- Secondary lead smelters
- Specialty steel mills
- High-temperature alloy manufacturers
Its finished long steel products include reinforcing bar, merchant bar, light structural, and other special sections, as well as semi-finished billets for rerolling and forging applications.
In addition, Commercial Metals provides fabricated steel products used to reinforce concrete primarily in the construction of the following:
- Commercial and noncommercial buildings
- Hospitals
- Convention centers
- Industrial plants
- Power plants
- Highways, bridges and dams
- Arenas and stadiums
It sells and rents construction-related products and equipment to concrete installers and other businesses. The company also manufactures and sells strength bars for the truck trailer industry, special bar steels for the energy market and armor plates for military vehicles. Other manufactured products include rebar, merchant bars and wire rods. And the company sells fabricated rebars, wire meshes, fabricated meshes, assembled rebar cages and other fabricated rebar by-products to fabricators, manufacturers, distributors and construction companies. (The states benefiting most from Biden infrastructure policies.)
Investors receive a 1.34% dividend. The company is expected to lift its $0.16 per share payout to $0.18.
UBS has a $63 target price on Commercial Metals stock. The consensus target is $61.60, and Monday’s closing share price was $48.06.
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