Original Link | Investopedia
For income-oriented investors, especially those seeking to bolster their portfolios with high-yielding stocks that also have the resources to maintain or even augment their dividend payouts going forwards, five stocks in particular stand out right now, according to Barron’s. These are: semiconductor manufacturer Texas Instruments Inc. (TXN); drugstore chain CVS Health Corp. (CVS); regional bank PNC Financial Services Group Inc. (PNC); food service supplier Sysco Corp. (SYY); and medical device maker Medtronic PLC (MDT).
Barron’s utilized research by Reality Shares Inc., an investment management firm and ETF sponsor in San Diego that focuses on identifying stocks with the potential to increase their dividends over the long term. Reality Shares uses seven principal criteria to evaluate stocks, including forecast payout growth, the ratio of free cash flow to dividends, and the ratio of share repurchases to dividends. The latter measure indicates whether the company could raise dividends by reducing share buybacks. (For more, see also: Bull or Bear, 5 Stocks With Rising Dividends.)
From 900 companies analyzed by Reality Shares, Barron’s took those with the firm’s top dividend safety rating which also have market caps or at least $25 billion and dividend yields of at least 2%. The five stocks listed above passed all these tests. Barron’s analysis of each follows.
Texas Instruments is the leading analog chipmaker, with rising sales for automotive and industrial applications. EPS has been growing at double-digit annual rates in recent years, with an 18% increase projected for full year 2017. The company has strong cash flow and has a history of using it to fund dividend increases and share repurchases. Analysts project that the dividend per share, currently $2.00, will rise to $2.21 in 2018. (For more, see also: Gartner Raises 2017 Semiconductor Market Outlook.)