Dividends are on the rise for five notable U.S. stocks, and Wall Street analysts are optimistic about their potential for price appreciation. Let’s explore the high-end total return potential for these stocks, factoring in both increasing dividends and Wall Street price targets.
CMI: 25% Return Possible When Considering Goldman Sachs’ Bullishness
First on the list is the approximately $48 billion industrial stock Cummins (NYSE: CMI). On July 15, Cummins announced a 10% increase in its quarterly dividend, raising it to $2.00 per share. This new dividend will be payable on September 4 to shareholders of record on August 22. Overall, the stock now boasts a solid indicated dividend yield of just under 2.3%, placing it among the top 20 U.S. large-cap industrial stocks.
The MarketBeat consensus price target for Cummins is around $361, implying a modest upside of only 3%. However, Goldman Sachs is notably bullish, setting a price target of $431, which suggests a much more attractive 23% upside. When combined with the stock’s 2.3% dividend, the total return potential for Cummins over the next 12 months could reach as high as 25%.
Wells Fargo Sees +30% Total Return Potential in Unum
Next, we have Unum Group (NYSE: UNM), an insurance provider that recently increased its quarterly dividend by nearly 10%. The new dividend of $0.46 will be paid to shareholders of record as of July 25 on August 15, giving the stock an indicated yield of just under 2.3%.
Analysts are optimistic about Unum’s upside potential. The MarketBeat consensus price target is just over $90, implying around 11% upside. However, Wells Fargo & Company has set a target of $105, suggesting that shares could rise by more than 29%. Including dividends, this target indicates a total potential increase of over 31%. Furthermore, most MarketBeat-tracked price targets updated in July signal higher upside than the consensus target, indicating positive momentum.
Susquehanna’s $215 Target on Ryder System Indicates +25% Upside
Next is Ryder System (NYSE: R), a logistics company that announced a 12% increase in its quarterly dividend on July 10, raising it to $0.91. This dividend will be payable on September 19 to shareholders of record on August 18, resulting in an indicated yield of approximately 2.1%.
The latest price target from Susquehanna, which initiated coverage on July 15, is $215, the highest currently tracked by MarketBeat. This target implies a potential rise of around 26%. When factoring in the dividend, Ryder’s total return potential could reach 28% over the next year.
DUK: +3.5% Yield With Upside According to Goldman Sachs
Also featured is Duke Energy (NYSE: DUK), one of America’s largest utility companies. Duke recently announced a 1.9% increase in its quarterly dividend, raising it to $1.065, payable on September 16 to shareholders of record as of August 15. This results in a solid dividend yield of 3.6%.
Goldman Sachs has set a price target of $132 for DUK, indicating more than 11% upside potential over the next year. Thus, with the dividend yield included, the total return potential for Duke could be around 15%.
Mizuho and WFC Place $135 Target on PPG, Indicating 20% Return Potential
Finally, we have PPG Industries (NYSE: PPG), a basic materials stock valued at approximately $26 billion. The company recently increased its dividend by 4.4%, with the next $0.71 quarterly dividend payable on September 12 to shareholders of record on August 11, resulting in a new indicated yield of just under 2.5%.
The MarketBeat consensus price target for PPG is just over $131, suggesting a solid upside of nearly 15%. However, analysts at Mizuho and Wells Fargo have both released above-consensus price targets of $135, indicating around 18% upside potential. Therefore, the total return for PPG over the next year could exceed 20%.
The combination of investment income and upside potential is a desirable aspect for many investors. These companies are contributing to that equation by increasing their dividends, but they will need to perform well moving forward to fulfill the other part of the promise.
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