Dividend-paying stocks can provide investors with the opportunity to cushion their portfolios from market volatility and can also enhance returns.
For investors, choosing the right dividend stocks is no easy task. Wall Street’s best analysts provide insight into a company’s ability to offer attractive dividend yields and long-term upside.
Here are three attractive dividend stocksaccording to Wall Street’s Top Professionals TipRanks is a platform that ranks analysts based on their past performance.
Kimberly Clark
consumer goods giant Kimberly Clark (KMB) is this week’s first dividend pick. The owner of popular brands like Huggies and Kleenex is a Dividend King, a term used to describe companies that have raised their dividends for at least 50 consecutive years.
In the first quarter of 2024, Kimberly-Clark returns $452 million paid to shareholders In the form of dividends and share buybacks. KMB’s quarterly dividend is $1.22 per share ($4.88 on an annualized basis), giving it a dividend yield of 3.5%.
Earlier this month, RBC Capital analysts Nick Mody Upgraded KMB shares to buy from hold and raised the target price to $165 from $126. The upgrade follows a comprehensive review of the company following its analyst day event in March, reflecting KMB’s “transformation from a cost-focused company to a growth-oriented business”.
Modi believes KMB is well-positioned to achieve faster and more reliable growth. He is now confident that the company can achieve its long-term goals, which include gross margins reaching 40% by 2030 and revenue compound annual growth rates exceeding 3% (local currency).
The analyst attributed Kimberly-Clark’s turnaround to the leadership of CEO Mike Hsu. He acknowledged that the company’s decision to reorganize into three business units (North America, International Personal Care, International Home and Professional) is a step in the right direction. It reduces KMB’s product costs and speeds time to market.
Modi ranks 593rd among more than 8,800 analysts tracked by TipRanks. His ratings were profitable 61% of the time, with an average return of 6.8%. (look Kimberly Clark’s Stock Buybacks on prompt ranking)
chord energy
Next on the list is chord energy (CHRD), an oil and gas operator in the Williston Basin. In June, the company paid a base dividend of $1.25 per share and a variable dividend of $1.69 per share.
Chord Energy recently announced Complete acquisition Enerplus. The company expects the transaction to strengthen its position in the Williston Basin through increased scale, lower inventory costs and solid shareholder returns.
After the news was announced, Mizuho analysts William Janela Reiterate a Buy rating on CHRD stock with a price target of $214. The analyst highlighted that the company had raised its forecast for annualized trading synergies by $50 million, or 33%, to more than $200 million.
Janela believes that given Chord Energy and Enerplus’ good productivity in the Williston Basin, the focus will now be on the combined company’s enhanced operational scale. Additionally, the deal will result in above-average cash returns, a payout yield of approximately 9%, and below-average financial leverage.
“Relative valuation remains attractive as the shares trade at a discount to peers in terms of FCF/EV (free cash flow/enterprise value),” Janela said.
Janela is ranked No. 333 among more than 8,800 analysts tracked by TipRanks. His rating success rate is 57%, with an average return of 29.9%. (look Chord Energy Stock Chart on prompt ranking)
Cisco Systems
Our third pick is dividend-paying tech stocks Cisco Systems (China Association for Science and Technology). The internet giant paid out $2.9 billion to shareholders Q3 FY24, including dividends worth $1.6 billion and stock repurchases worth $1.3 billion. At a quarterly dividend of 40 cents per share, CSCO’s dividend yield is 3.5%.
In response to the recent Investor and Analyst Day, Jefferies analysts George Knott Reiterate a buy rating on Cisco stock with a price target of $56. The analyst said he was more optimistic about the company’s prospects after the event and had a clearer view of Splunk’s strategy. Cisco Complete acquisition Cybersecurity company Splunk, March 2024.
At the event, the company maintained its guidance for the fourth quarter of fiscal 2024 and continues to expect revenue to grow in the low to mid-single digits in fiscal 2025. , “We think the 4-6% Y/Y revenue growth target looks pretty good.” Cisco expects earnings per share (EPS) to grow 6% to 8% in fiscal 2026-2027, with gross margins improving.
The analyst explained that Cisco’s long-term growth goals look good, as the company has been growing revenue at a rate of 1% to 3% over the past decade.
Notter is ranked No. 629 among more than 8,800 analysts tracked by TipRanks. His ratings were profitable 62% of the time, with an average return of 10.1%. (look Cisco Hedge Fund Activity on prompt ranking)
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