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 that help to provide an income stream. What this equates to is total return, which is one of the most powerful investment strategies going. While interest rates are rising, these companies still make sense for investors looking for solid growth and income potential.
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%. That is, 10% for the increase in stock price and 3% for the dividends paid.
Five top large-cap companies are expected to raise their dividends this week, so we screened our 24/7 Wall St. research universe and found that all are Wall Street favorites and rated Buy at some of the top firms.
While it is always possible that not all of them do indeed raise their dividends, top analysts expect them to, and generally the data is based 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.
This is a strong health care play, especially with hospitals and doctors returning to non-COVID-19-related procedures in a big way. Baxter International Inc. (NYSE: BAX) provides a portfolio of renal and hospital products.
Its Renal segment provides products and services to treat end-stage renal disease, irreversible kidney failure and acute kidney therapies. This segment offers a comprehensive portfolio to meet the needs of patients across the treatment continuum, including technologies and therapies for peritoneal dialysis, in-center hemodialysis (HD), home HD, continuous renal replacement therapy and additional dialysis services.
The Hospital Products segment manufactures intravenous (IV) solutions and administration sets, premixed drugs and drug-reconstitution systems, pre-filled vials and syringes for injectable drugs, IV nutrition products, infusion pumps, inhalation anesthetics and biosurgery products. This segment also provides products and services related to pharmacy compounding, drug formulation and packaging technologies.
Shareholders currently receive a 1.58% dividend. The company is expected to raise its $0.28 per share dividend to $0.32. Morgan Stanley has a Wall Street high $105 target price on Baxter International stock. The consensus target is $94.00, and the shares closed on Friday at $71.06.