With interest rates rising over the past year, many investors are now looking at short-term Treasury debt as a solid idea. Volatility and the potential for a stock market meltdown 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 always 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%: 10% for the increase in stock price and 3% for the dividends paid.
Four top 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 three of the four are rated Buy at some of the top firms on Wall Street.
While it is always possible that not all four do indeed raise their dividends, top analysts expect them to, 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.
This is a very safe idea for nervous investors to look at now. Chesapeake Utilities Corp. (NYSE: CPK) operates as an energy delivery company. The Delaware-based company operates through two segments.
Its Regulated Energy segment has natural gas distribution operations in central and southern Delaware, Maryland’s eastern shore, and Florida, as well as regulated natural gas transmission in the Delmarva Peninsula, Ohio and Florida, and regulated electric distribution in northeast and northwest Florida.
The Unregulated Energy segment engages in propane operations in the Mid-Atlantic region, North Carolina, South Carolina and Florida, as well as in unregulated natural gas transmission/supply operations in central and eastern Ohio. It engages in generation of electricity and steam; provision of compressed natural gas, liquefied natural gas and renewable natural gas transportation and pipeline solutions primarily to utilities and pipelines in the eastern United States; and project development activities.
This segment is also involved in the provision of other unregulated services, such as energy-related merchandise sale and heating, ventilation and air conditioning, and plumbing and electrical service.
Shareholders currently receive a 1.75% yield, and the dividend is expected to rise from $0.535 per share to $0.59. Royal Bank of Canada has a Sector Perform rating and a $133 target price. The consensus target is $135.43, and shares closed on Monday at $123.50.
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