Dividend Growth and Analyst Targets Align for These High-Yield Stocks

Dividends are on the rise for these five U.S. stocks, and Wall Street analysts see further return potential through price appreciation.

So, what does the high-end total return potential look like for these stocks when considering rising dividends and Wall Street price targets? Let’s dive in below.

CMI: 25% Return Possible When Considering Goldman Sachs' Bullishness

First up is the approximately $48 billion industrial stock Cummins (NYSE:CMI). On July 15, Cummins announced that it would increase its quarterly dividend by 10% to $2.00 per share. This new dividend is payable on Sept. 4 to shareholders of record on Aug. 22. Overall, the stock now has a solid indicated dividend yield of just under 2.3%. That puts Cummins’ yield solidly in the top 20 among U.S. large-cap industrial stocks.

The MarketBeat consensus price target on Cummins is around $361, implying upside of only 3%. However, Goldman Sachs is notably bullish on this name, placing a $431 price target. Goldman’s target implies a much more appealing 23% upside in Cummins shares. Combined with the stock’s 2.3% dividend, the total return potential in Cummins over the next 12 months could be as high as 25%.

Wells Fargo Sees +30% Total Return Potential in Unum

Insurance provider Unum Group (NYSE:UNM) also just recently boosted its quarterly dividend by nearly 10%. The company is set to pay the new $0.46 dividend to shareholders of record as of July 25 on Aug. 15. This gives the stock an indicated yield of just under 2.3%.

Analysts also see a solid amount of upside potential in Unum, both on average and at the high end. The MarketBeat consensus price target on Unum is just over $90, implying around 11% upside. However, Wells Fargo & Company has placed a $105 target on the stock, suggesting that shares could rise by more than 29%. Including dividends, Wells Fargo’s price target suggests shares could rise by more than 31%. Additionally, most of the MarketBeat-tracked price targets updated in July signal higher upside than the consensus target. This implies that expectations are moving in a positive direction.

Susquehanna’s $215 Target on Ryder System Indicates +25% Upside

Next up is logistics company Ryder System Inc (NYSE:R). On July 10, Ryder announced an increase to its quarterly dividend of 12%, lifting its payout to $0.91. It is payable on Sept. 19 to shareholders of record on Aug. 18. This dividend increase puts the stock's indicated yield at approximately 2.1%.

The most recent price target on Ryder comes from Susquehanna, which initiated coverage on July 15. Their $215 price target is the highest MarketBeat currently tracks and implies that shares could rise by around 26%. Adding in the dividend, the stock’s total return potential stretches to 28% over the next 12 months.

DUK: +3.5% Yield With Upside According to Goldman Sachs

Also making the list is one of America’s largest utility companies, Duke Energy (NYSE:DUK). Duke announced an approximately 1.9% increase to its quarterly dividend. The new $1.065 dividend is payable on Sept. 16 to shareholders of record at the close of business on Aug. 15. Now, the stock’s indicated dividend yield sits at a very solid 3.6%.

Goldman Sachs' $132 price target on DUK signals that more than 11% upside could be in store for Duke over the next 12 months. Thus, the stock’s dividend yield brings its total return potential for this period to around 15%.

Mizuho and WFC Place $135 Target on PPG, Indicating 20% Return Potential

Last up is PPG Industries (NYSE:PPG), an approximately $26 billion basic materials stock that just boosted its dividend by 4.4%. The company’s next $0.71 quarterly dividend is payable on Sept. 12 to shareholders of record on Aug. 11. This gives the stock a new indicated yield of just under 2.5%.

The MarketBeat consensus price target on PPG (WA:IBSP) is just over $131, implying solid upside of nearly 15%. However, in July, analysts at both Mizuho and Wells Fargo released above-consensus $135 price targets on PPG. These targets signal around 18% upside potential in shares. Thus, the stock’s total return over the next 12 months could reach north of 20%.

Overall, the combination of investment income and upside potential is one that many investors covet. These names are fulfilling one part of that equation by lifting dividends. They will need to execute strongly going forward to deliver on the other.

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Written By: MarketBeat.com