Dividend stocks are more attractive as investors grapple with rising bond yields and a turbulent stock market, he says CNBC.
Here are five dividend stocks worth buying recommended by Wall Street’s top experts on TipRanks, a platform where analysts are ranked based on past performance.
Dividend Aristocrat Exxon Mobil offers a dividend yield of 3.4%. The latest dividend increase represents 40 consecutive years of dividend increases. The oil giant’s payouts are covered by strong earnings and cash flow.
In the second quarter, the group’s dividend cost was $3.7 billion. Exxon also repurchased $4.3 billion worth of shares in the June quarter. During the same period, the oil giant generated $5 billion in free cash flow.
Mizuho analyst Nitin Kumar reiterated a buy rating on Exxonmobil with a target price of $139. The analyst notes that the company is halfway to achieving its goal of increasing product solutions profits by $10 billion by 2027, compared to $6 billion in 2019. Most of that additional profit should come from cost savings.
In addition, Kumar expects the recently announced strategic projects for the period between 2024 and 2027 to help achieve the 2027 profit target.
Nitin Kumar is No. 67 out of over 8,500 analysts on TipRanks. 71% of his tips are profitable, with each tip generating an average return of 19.8%.
Kumar also has a positive outlook on Coterra Energy, a US oil and gas operator. Earlier this year, the oil company increased its core dividend by at least 33% to $80 cents per share.
The company has set a goal of returning 50% of free cash flow to investors. The group announced in 2023 that share buybacks are preferred over variable dividend payments. In the first half of 2023, Cutera returned a total of US$628 million to shareholders, representing 94% of free cash flow.
Last month, Kumar held a meeting with Cottera Energy management, which revealed the company’s confidence in its ability to deliver strong returns on investments under most commodity price scenarios.
Kemar reiterated a Buy rating on Coterra Energy with a price target of $42, implying over 55% upside potential at current price levels.
Brookfield Infrastructure Partners
Brookfield operates in transportation, utilities, data, and other sectors. The company increased its quarterly profits by 6% on an annual basis, bringing the dividend yield to 5.5%.
Robert Cowan, an analyst at KBC Capital, believes the revenue stream could increase, especially in the data center sector. In addition, Cowan believes that the potential for returns on invested capital could exceed the expected 12-15% as market capital raising slows.
Kwan offers a Buy rating for Brookfield with a price target of $45.
Robert Cowan is #194 out of over 8,500 analysts on TipRanks. 64% of his tips are profitable, with each tip generating an average return of 10.8%.
American electric power
Shelby Tucker, another analyst at RBC Capital rising On the American Electric Power Utility Company. On October 2, the company named new CEO Charles E. Zeppola and confirmed its 2023 forecast for earnings per share in the range of $5.19-$5.39 and long-term operating earnings growth of 6%-7% annually.
American Electric Power paid 83 cents in cash on Sept. 8, marking the 453rd consecutive quarter of dividend payments. Dividend yield 4.6%
Tucker recently lowered his price target for Electric Power from $103 to $90 to account for rising interest rates. However, the analyst believes that the group will benefit from this Inflation reduction law.
He also believes the US electric power company deserves an excellent rating because it is greening its fleet and investing heavily in renewable energy.
Shelby Tucker is No. 367 out of over 8,500 analysts on TipRanks. 61% of his tips are profitable, with each tip generating an average return of 8.1%.
Darden Restaurants owns Olive Garden and other famous names. The company achieved better-than-expected results in the first quarter. Dividends will be distributed in the amount of $159 million, and shares will be repurchased for $143 million. Dividend yield 3.7%
Following the strong results, JPMorgan analyst John Evanko reiterated a buy rating, but lowered his price target from $176 to $174.
According to Ivanco, the company can achieve a shareholder return of more than 10% in 2024 and 2025.
John Evanko is #854 out of over 8,500 analysts on TipRanks. 60% of his tips are profitable, with each tip generating an average return of 7.1%.
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