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Diversified financial services firm
Prudential Financial(PRU - Get Report) is up first. The $21 billion firm has businesses ranging from insurance to annuities, retirement and investment management, a combination of one-time and recurring fee-based businesses that have helped PRU achieve stair-step revenue growth, in spite of 2008.
Prudential paid out an annual dividend of $1.45 last year. Investors should expect that payout to increase in 2012.
Prudential is a major player in the insurance industry, a business where size doesn't matter much. After all, insurance offerings have become more commoditized thanks to an increasingly data-hungry and efficient insurance market. But size does allow Prudential to make deals and underwrite coverage that smaller peers can't touch.
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Meanwhile, more significant growth is coming from overseas (and to a lesser extent from fee-based businesses). Japan currently makes up around half of Prudential's annual profits. As insurance markets in other parts of Asia mature, risks should come down enough to allow Prudential to expand its reach even more.
The firm's 3.18% dividend yield is hefty, but its payout ratio is only around 20%. There's ample room for a dividend hike right now.
Prudential shows up on a list of
5 Buy-Rated Insurance Stocks for Long-Term Investors.