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Darden Restaurants, Inc. (DRI), Oracle Corporation (ORCL): These 4 Companies Just Became More Attractive

Aside from periods of irrational exuberance, most gains in this market have not been created by fundamental improvements in the global economy. Our economy is barely trucking along, with very little growth between 2% and 3%. However, high-yield investments can offer a sanctuary of sorts, a place where you can invest money and know that a cushion exists. Therefore, I am looking at four large-cap stocks that just recently became more attractive after raising their dividends.

Company Dividend Hike Quarter-Over-Quarter Dividend Hike Over 5 years 2014 Dividend Yield
Darden Restaurants, Inc. (NYSE:DRI) 10% 175% 4.29%
Oracle Corporation (NASDAQ:ORCL) 100% 140% 1.46%
Target Corporation (NYSE:TGT) 19.4% 170% 2.47%
Caterpillar Inc. (NYSE:CAT) 15% 43% 2.88%

Expectations of Growth With High Yield

Darden Restaurants, Inc. (NYSE:DRI)

Darden Corporation has traded flat over the last year, mostly due to a weak period between September 2012 and January 2013. During this period, there was reason to think that large fundamental declines could occur as same-store sales faltered.

Today, store sales are positive at all three of Darden Restaurants, Inc. (NYSE:DRI)’s restaurants, and after an aggressive capital return program, shares are very attractive. In this economy, with the market so volatile, restaurants are often a good secular investment. In my opinion, with projected growth of 6-8%, Darden Restaurants, Inc. (NYSE:DRI) is a clear leader and should be a safe investment moving forward.

New Partnerships and Synergies Could Produce Gains

Oracle Corporation (NASDAQ:ORCL) is not what most what call “high-yield,” but the company has chosen to return capital to shareholders and is doing so at a rapid rate. The stock’s yield is currently about a half percent below the S&P 500, although at 9.5 times next year’s earnings, the stock also trades significantly below the market.

With that said, I think you have to like Oracle Corporation (NASDAQ:ORCL). The stock is lower by 8% YTD and has seen two weak quarters back-to-back. However, after new partnerships with the likes of Salesforce, Netsuite and Microsoft, analysts believe that additional synergies could be seen in the year(s) ahead. These partnerships should improve industries where Oracle has seen troubles. In my opinion, these partnerships and Oracle’s valuation make it a good long-term buy.

The “Little Brother” Gives You an Edge

Target is the quintessential secular play, but also has room to grow as Wal-Mart’s little brother. With a forward yield of 2.47%, an investment in Target returns slightly more than the S&P 500. However, with it trading at 12.80 times next year’s earnings and 0.6 times sales, Target is much cheaper than the S&P 500 (15% and 50% respectively).

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