5 Dividend Stocks to Buy According to Wall Street Analysts

by:https://www.cnbc.com/

Investors are seeking attractive dividend picks that provide a reliable income stream while offering potential for long-term capital appreciation. According to Wall Street’s leading analysts on TipRanks, several dividend stocks are worth considering for their strong financial performance and promising growth prospects.

IBM

Tech giant IBM reported mixed results for Q2 2023, with revenue falling short of expectations but earnings exceeding estimates due to improved gross margin. The company is undergoing a transformation, focusing on growth areas like hybrid cloud computing and artificial intelligence. IBM generated significant free cash flow and increased its dividend by 0.6% this year, marking the 28th consecutive year of dividend hikes. The current dividend yield stands at about 4.6%. Stifel analyst David Grossman reaffirmed a buy rating for IBM and raised his price target, expecting organic and inorganic growth in the company’s software business.

Chord Energy (CHRD)

Chord Energy is an oil and gas operator with assets in the Williston Basin. The company rewards shareholders through a quarterly base dividend, a variable dividend, and share buybacks. RBC Capital analyst Scott Hanold expects Chord to exceed its minimum shareholder payout and maintains a bullish stance on the stock despite lower commodity prices affecting Q2 results.

Energy Transfer LP (ET)

Energy Transfer is a publicly traded limited partnership operating an extensive pipeline network across 41 U.S. states. The company recently increased its quarterly cash distribution, leading to a dividend yield over 9%. RBC Capital analyst Elvira Scotto reiterated a buy rating on Energy Transfer, impressed by its attractive asset base and potential for significant cash flow generation.

EOG Resources (EOG)

EOG Resources, an oil and gas exploration company, returned a substantial amount to shareholders through dividends and share repurchases. Analyst Nitin Kumar from Mizuho maintains a buy rating on EOG, anticipating strong free cash flow despite a dip in aggregate pricing.

Morgan Stanley (MS)

Morgan Stanley reported market-beating Q2 results, led by its robust wealth management division. The bank announced a dividend hike and reauthorized a share repurchase program. BMO Capital analyst James Fotheringham increased forward estimates and raised the price target for MS stock, optimistic about the bank’s performance and potential deal activity.

Conclusion

These five dividend stocks, favored by Wall Street analysts, present promising opportunities for investors seeking both steady income and long-term growth potential. With their solid financials and strategic initiatives, these companies are well-positioned to deliver favorable returns to shareholders.