3 Top Dividend Stocks That Should Boost Their Earnings

Regular dividend payments are a smart addition to any portfolio as they contribute to the investment objective of combining growth and income. Top dividend-paying stocks that also show strong earnings potential or good chart stock, or both, include Interpublic Group of Companies Inc. (NYSE: IPG), Principal Financial Group Inc. (NASDAQ: PFG), And ConAgra Brands Inc. (NYSE: CAG).

Luckily, you can use MarketBeat tools to find the highest dividend-paying stocks. It’s a much better process than chasing performance willy-nilly, which can lead to losses. Investors should remember that when a stock’s price goes down, its yield goes up. In a poor market, many dividend payers may drop their price enough to wipe out their yield.

In other words, don’t just chase the highest yield in town; you also want to find stocks with other quality attributes. Rising revenues and profits are usually the drivers of price growth. You also want to find stocks that are rising in price, so that you have both dividend income and price appreciation in your corner.

Here are three stocks with strong dividend yields that also meet the criteria for institutional-grade investments.

Interpublic Group

It’s no surprise that global advertising agency Interpublic Group, like most of its industry peers, has seen revenue growth slow in 2022 as big brands tighten their belts.

Nevertheless, the company maintained its long streak of profitability and even saw its margins increase. Wall Street still expects earnings growth this year and next, but with higher interest rates and the looming threat of a recession, those increases should be in the single digits.

The company has increased its shareholder payout in each of the past 11 years, as you can see using MarketBeat’s dividend data. Its yield is 3.5%.

When it announced its latest dividend increase, in February, the company also announced that it was authorizing a new buyback program of up to $350 million of common stock. This is in addition to any remaining amount from a buyback program announced in 2022.

The stock’s chart shows an orderly 17% pullback from its early February high of $39.52. At this point, this is the next buy point to watch.

ConAgra Brands

You may not be familiar with the ConAgra name, but you are sure to know some of its brands, including Slim Jim, Duncan Hines, Hunts, Marie Callender’s, Bird’s Eye, and Orville Redenbacher, among others.

The company pays a dividend yield of 3.63%, as shown by dividend data from MarketBeat. This is higher than the current average dividend within the S&P 500, which is 1.69%. ConAgra has increased its payout in each of the past three years.

For income investors, Conagra Brands offers a considerable dividend yield of 3.6%, well above the S&P 500 average of 1.69%. Conagra has a long history of paying dividends. Once a company begins to increase its dividends, this trend tends to continue, unless profits decline sharply or a once profitable company begins to report losses.

At this time, this is not expected to happen at ConAgra. Analysts expect profits to increase by 13% this year and another 5% next year.

MarketBeat’s institutional ownership data shows more institutional buyers than sellers over the past year. Institutional inflows also totaled more than institutional outflows, which is what you want to see in a stock you’re watching.

Main financial group

Principal Financial offers health and life insurance products, as well as retirement and investment services.

The stock’s dividend yield is 3.54%, as shown by dividend data from MarketBeat. It has a three-year annualized dividend growth rate of 5.50%, following several years of dividend increases. Earnings growth has slowed in 2022, but that is expected to reverse this year, with earnings growth of 3%, rising another 11% next year.

As with many financial stocks, the stock fell sharply alongside news of bank failures, although insurance is a very different line of business. It’s not uncommon to see all stocks in a sector fall on bad news about a particular industry.

Analysts have a price target of $78.64 on the stock, a potential upside of 8.66%, which would take the stock back to March 9 levels. While that doesn’t look particularly impressive right now, the continued earnings growth forecast is encouraging.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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