Many analysts believe that the smart money is moving out of dividend paying stocks and into riskier growth stocks. Lower unemployment numbers and solid growth forecasted for 2012 may be indicating that it's time to move out of defensive stocks. Despite that opinion, these five dividend stocks have been upgraded in the last week. Each stock has a dividend yield of 2% or more.
Stocks have been roaring higher lately, but analysts believe these dividend stocks still have room to go. We've listed the reason for the upgrade and the new price target for each upgrade.
Hercules Technology Growth Cap (HTGC)
Stifel Nicolaus upgraded Hercules Technology on February 3rd, 2012 to a buy and set a price target of $11.50. They cited significant portfolio growth and increased VC activity.
Hercules has a dividend yield of 8.1% and has been paying dividends since 2005. The company increased its dividend in 2011 after cutting it in 2010. Hercules' payout ratio is a very high 98%.
BB&T Corporation (BBT)
Barclays Capital upgraded BB&T to equal weight on February 3rd 2012 and set a price target of $34 a share. Analysts are expecting BB&T to increase its dividend and are expecting income growth and reduced expenses in 2012.
BB&T has a dividend yield of 2.2% and has been paying dividends since 1934. BB&T cut its dividend in 2010 but resumes its tradition of dividend increases in 2011. BB&T's payout ratio is 41%.
Seagate Tech (STX)
Stifel Nicolaus upgraded Seagate Technology on February 1st 2012 to a buy and set a price target of $35 per share. Stifel Nicolaus referred to Seagate's strong guidance, improving gross margins and the Samsung (SSNLF.PK) acquisition as the reason for Seagate's upgrade.
Seagate has a dividend yield of 3.8% and just recently initiated dividend payments in 2011. The company has increased its annual dividend payments in 2012 for $.72 to $1 per share. Seagate's payout ratio is a modest 49%.
Hancock Holding (HBHC)
Morgan Keegan upgraded Hancock to outperform on January 30th, 2012 and set a price target of $37 per share. They cited improving returns and earning visibility as the reason for the upgrade.
Hancock has a dividend yield of 2.8% and has been paying dividends since 1990. The company has not increased its dividend in recent years and currently has a payout ratio of 66%. Hancock's stock has increased by 6% over the last 12 months.
Brooks Automation (BRKS)
Brigantine upgraded Brooks Automation to a buy on January 30th, 2012 and set a price target of $13.50. Brigantine cited better than expected semiconductor capital equipment spending and the valuation of the stock.
Brooks Automation has a dividend yield of 2.91% and just recently started paying dividends in 2011. Its payout ratio is 8%. This stock was knocked down in 2011 but has started to turn around since October 2011. Since it bottomed out in October, the stock is up over 30%.