© Reuters. 3 top dividend stocks with high upside potential
Given the strong first quarter earnings and economic data, many companies are expected to increase their dividends. For this reason, investors should consider dividend stocks with strong upside prospects that also offer the potential for capital appreciation. Three stocks that fit into the bill are EOG Resources (NYSE :), America Movil (NYSE 🙂 and Toyota Engine (NYSE :). The first quarter earnings season got off to a good start as banks squashed Wall Street analysts' estimates. The results so far appear to be a precursor to a strong winning season. These results, along with robust economic data, show that the economy is improving rapidly. This has increased confidence not only in investors but also in corporate management teams.
As companies grow their profits, many are expected to use that extra cash to restore or increase their dividend payouts. Investing in dividend stocks is a great way for investors to generate income. An even better strategy is to invest in dividend stocks with high upside potential.
I find stocks that trade below their analyst target average offer a great opportunity for price gains in the months ahead. So I created a screen for dividend stocks that were trading at least 13% below their average target price and rated a buy or a strong buy on our POWR rating system. EOG Resources, Inc. (EOG), America Movil (AMX), and Toyota Motor Corporation (TM) are three top dividend stocks that fit the bill, which is why I'll highlight them below.
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