Investing
Morgan Stanley predicts these stocks may follow Meta and Alphabet in declaring a dividend
Morgan Stanley recently highlighted the potential for new companies to join the dividend stock club, emphasizing the benefits of offering a consistent dividend to investors. According to analyst Todd Castagno, dividends can signal optimism for the future, attract income-oriented investors, and demonstrate confidence in the business. High-profile companies such as Alphabet and Meta Platforms have recently initiated dividends, joining the ranks of the “Magnificent Seven” stocks offering dividends. Castagno’s research suggests that companies tend to outperform the market following a dividend initiation, particularly in sectors like consumer staples, energy, and communication services.
To identify potential dividend initiators, Morgan Stanley looked for companies with a market capitalization exceeding $35 billion, a strong net cash position, and a free cash flow yield exceeding 3%. Among the companies that met these criteria were popular tech companies like PayPal and Palo Alto Networks, as well as Expedia Group, which boasts a significant free cash flow yield of 12.6%. Despite its strong fundamentals, Expedia Group has seen its shares decline this year, with the company lowering its full-year guidance due to various challenges in its business segments. Newly public grocery delivery company Instacart, as well as well-known brands like Lululemon Athletica, Airbnb, and Regeneron, also made the list of potential dividend initiators.
Investors may want to keep an eye on these companies as they consider adding dividend stocks to their portfolios. Offering a dividend can be an attractive feature for income-oriented investors seeking a steady source of income from their investments. Additionally, companies that initiate dividends may see a positive impact on their stock performance, as evidenced by Morgan Stanley’s research findings. By diversifying their portfolios with dividend-paying stocks from various sectors, investors can potentially benefit from both income generation and capital appreciation over time. As the dividend stock club potentially expands to include new members, investors have more options to consider when building a well-rounded investment portfolio.
-
Politics4 days ago
Latest news on the 2024 election: Biden fundraising in San Francisco and Seattle regions
-
Tech4 days ago
Here's an In-Depth Look at How Cadillac Made it to Le Mans In 2023
-
News4 days ago
£132,000 farmhouse on the brink of 150ft cliff starts demolition as owner evacuated – neighbor vows to stay until his death.
-
Lifestyle4 days ago
Selena Gomez shares adorable photo with Benny Blanco amidst Justin Bieber baby news
-
Uncategorized4 days ago
The Washington Post – Breaking news and latest headlines, U.S. news, world news, and video
-
News4 days ago
British family left ‘terrified’ after being surrounded by a shark at a Spanish beach – as 27-year-old mother recounts how the predator ‘zig-zagged’ in the water and pursued her father
-
Tech4 days ago
Seattle startup aims to enhance the sports experience for vision-impaired fans with innovative tactile device
-
News4 days ago
16-year-old accused of defacing World War I statue in New York City