Huge Warren Buffett Holding Is One of 3 Top Blue Chips That May Raise Dividends This Week

After years of a low interest rate environment, which currently is trending much higher, many investors have turned to equities not only for the growth potential but also for solid and dependable dividends that help to provide a passive income stream. What this equates to is total return, which is one of the most powerful investment strategies going. While interest rates have risen, 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%: 10% for the increase in stock price and 3% for the dividends paid.

Three 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 that two are rated Buy at some of the top firms on Wall Street. While it is always possible that not all of them do raise their dividends, top analysts expect them to, given 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.

Darden Restaurants

The return to sit-down dining in restaurant locations has been huge for this industry leader, and the trend continues to improve. Darden Restaurants Inc. (NYSE: DRI) owns and operates full-service restaurants in the United States and Canada.

As of May 30, 2021, Darden Restaurants owned and operated 1,834 restaurants, including 875 under the Olive Garden banner, 533 LongHorn Steakhouse, 170 Cheddar’s Scratch Kitchen, 81 Yard House, 63 The Capital Grille, 44 Seasons 52, 42 Bahama Breeze, and 26 Eddie V’s Prime Seafood.

Investors currently receive a dividend yield of 2.92%. The company is expected to raise the dividend to $1.25 per share from $1.21.

Bank of America Securities has a $187 price target on Darden Restaurants stock. That is well above the $169.50 consensus target and Tuesday’s final print of $165.82.

Kroger

This grocery chain giant is always a solid idea when the going gets rough as people tend to go out less, and it is a big Warren Buffett holding. Kroger Co. (NYSE: KR) operates as a retailer in the United States with a focus on combination food and drug stores, multi-department stores, marketplace stores and price impact warehouses.

Its combination food and drug stores offer natural food and organic sections, pharmacies, general merchandise, pet centers, fresh seafood and organic produce. Its multi-department stores provide apparel, home fashion and furnishings, outdoor living, electronics, automotive products and toys.