The stock market has been buoyed by President Donald Trump’s takeover, but many questions remain about tax and tariff cuts. Dividend-paying stocks can offer investors some cushion if the market turns volatile.
Amid an uncertain macro backdrop, investors looking for stable returns can add solid dividend stocks to their portfolios. To pick the right dividend stocks, investors can consider the insights of top Wall Street analysts as they analyze a company’s ability to pay consistent dividends, backed by solid cash flows.
Here are three dividend paying stockspointed out The best professionals of Wall Street as tracked by TipRanks, a platform that ranks analysts based on their past performance.
AT&T
This week’s first dividend is a share of a telecommunications company AT&T (T). The company recently declared a quarterly dividend of $0.2775 per share, payable on February 3rd. AT&T stock offers a dividend yield of nearly 5%.
Most recently, an Argus Research analyst Joseph Bonner upgraded AT&T stock to Buy from Hold, with a $27 price target. Bonner’s upbeat attitude follows AT&T’s analyst day, where the company discussed its strategy and long-term financial goals.
Bonner noted that management raised its adjusted EPS forecast for 2024 and disclosed strong estimates for shareholder returns, earnings and cash flow growth as AT&T “finishes its exit from some troubled acquisitions and focuses on the convergence of wireless and fiber Internet services. “
The analyst expects the company’s efforts to cut costs, modernize the network and accelerate revenue to gradually reflect on its performance. He believes that management’s vision to capitalize on the opportunities arising from the convergence of wireless and fiber optics, along with the company’s strategic investments, provides a compelling outlook for future growth and shareholder returns.
Bonner noted that at an analyst day event, AT&T indicated that neither dividend increases nor mergers and acquisitions are being considered as the company invests in 5G and fiber broadband networks and continues to reduce its debt. Still, management is committed to protecting its dividend payments after cutting them by nearly half in March 2022. Bonner emphasized that AT&T plans to return $40 billion to shareholders over the period 2025-2027. through $20 billion in dividends and $20 billion in share buybacks.
Bonner is ranked No. 310 among more than 9,300 analysts tracked by TipRanks. Its ratings were profitable 67% of the time, yielding an average return of 14.1%. See Buyback of AT&T shares on TipRanks.
Chord energy
We are moving to Chord energy (CHRD), an independent oil and gas company operating in the Williston Basin. Under its capital return program, Chord Energy aims to return more than 75% of its free cash flow. The company recently paid a basic dividend of $1.25 per share and a variable dividend of 19 cents per share.
Ahead of Chord Energy’s Q4 2024 results, Mizuho analyst William Janela reiterated a buy rating on the stock with a $178 price target, calling CHRD a top pick. The analyst said his Q4 2024 CFPS (cash flow per share) and EBITDX (earnings before interest, taxes, depreciation and amortization) estimates were broadly in line with the Street’s estimates.
Janela added that compared to its competitors, Chord Energy has more visibility into this year’s outlook, as it has already issued its preliminary guidance. Furthermore, he expects the company to demonstrate increased capital efficiency on an annual basis, given that it has fully integrated assets from acquisition of Enerplus.
“A more defensive balance sheet (~0.2x net debt/EBITDX, one of the lowest among E&P peers) also leaves CHRD well positioned in a volatile oil price environment,” Janela said.
While CHRD stock has underperformed others in 2024, the analyst noted that the stock is now trading at a greater discount to the same on an EV/EBITDX and FCF/EV basis, which he believes understates the company’s improved scale and high-quality stock in the Bakken Basin. after the acquisition of Enerplus. Finally, based on its Q4 2024 free cash flow (FCF) estimate of $235 million, Janela expects about $176 million in cash returns, including $76 million in core dividends. It expects most of the variable FCF portion to reflect share buybacks, as in the third quarter.
Janela is ranked #656 out of more than 9,300 analysts tracked by TipRanks. His ratings were profitable 52% of the time, yielding an average return of 19.2%. See Chord Energy Insider Trading Activity on TipRanks.
Diamond energy
Another Mizuho analyst, Nitin Kumarhe is optimistic Diamond energy (CANINE), an independent oil and natural gas company focused on reserves in the Permian Basin. The company paid a basic dividend of 90 cents per share for the third quarter of 2024.
The company is scheduled to report results for the fourth quarter of 2024 at the end of February. Kumar expects FANG to report Q4 2024 EBITDA, free cash flow and capital expenditures of $2.543 billion, $1.243 billion and $996 million, versus Wall Street consensus of $2.485 billion, $1.251 billion and $1.004 billion, respectively. billions of USD.
The analyst said the fact that FANG maintained its preliminary forecast for 2025 that it released while announcing the acquisition of Endeavor Energy Resources in February 2024reflecting strong performance and modest cost savings.
Overall, Kumar reaffirmed a Buy rating on FANG stock with a $207 price target. He noted that “FANG is the leader in cashback payouts, with 50% of free money now returned to investors, including a high core dividend yield.”
He added that the company’s high dividend yield reflects its superior cost control and unit margins. Moreover, the analyst believes that with the completion of the Endeavor acquisition, the scale and quality of the combined asset base is impressive.
Kumar is ranked #119 out of more than 9,300 analysts tracked by TipRanks. Its ratings were profitable 67% of the time, yielding an average return of 14.1%. See Diamondback ownership structure on TipRanks.
