Top Wall Street analysts like these 3 dividend stocks for high yields

A favorable consumer price index report for April lifted investors’ hopes for rate cuts from the Federal Reserve – and that environment could prove favorable for dividend-paying stocks.

A lower interest rate environment makes dividend payers more compelling to income investors, especially because those stocks would be offering competitive yields versus those of Treasurys.

Recent results reported by several dividend-paying companies have proved their resilience and the ability to pay dividends despite a tough macro backdrop.

Bearing that in mind, here are three attractive dividend stocks, according to Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.

Ares Capital

The first stock on this week’s list is Ares Capital (ARCC), a company that focuses on financing solutions for small- and middle-market companies. On May 1, the company announced its first-quarter results and declared a quarterly dividend of 48 cents per share, payable on June 28. ARCC stock offers an attractive dividend yield of 9.1%.

Following the results, RBC Capital analyst Kenneth Lee reaffirmed a buy rating on ARCC stock with a price target of $22. While the company’s core earnings per share slightly missed the analyst’s estimate, he noted that first-quarter portfolio activity, including originations, was much greater than his expectations in what is generally observed to be a seasonally slower quarter.

The analyst added that the credit performance in ARCC’s portfolio continues to be strong. While the non-accrual rate increased slightly quarter over quarter, it still remained low at 1.7% of the portfolio compared to the industry average of nearly 3.8%.

“We maintain our Outperform rating, as we favor ARCC’s strong track record of managing risks through the cycle, well-supported dividends, and scale advantages,” said Lee.

Overall, Lee is bullish on ARCC due to its scale and capital position, access to the resources of the broader Ares Credit Group platform, experienced leadership team, and expectations that it can deliver annualized return on equity above peer averages.

Lee ranks No. 40 among more than 8,800 analysts tracked by TipRanks. His ratings have been successful 71% of the time, with each delivering an average return of 17.2%. (See Ares Capital’s Ownership Structure on TipRanks)

Brookfield Infrastructure Partners

Next up is Brookfield Infrastructure (BIP), a leading global infrastructure company that owns and operates diversified, long-life assets in the utilities, transport, midstream and data sectors. The company recently announced its first-quarter results and declared a quarterly distribution of $0.405 per unit.

This quarterly distribution marks a 6% year-over-year increase and is payable on June 28. With an annualized distribution of $1.62 per unit, BIP offers a yield of 5.3%.

Following the Q1 print, BMO Capital analyst Devin Dodge reaffirmed a buy rating on BIP stock, stating that the first-quarter results were largely in line with expectations. However, the analyst lowered his price target to $36 from $40 to reflect the impact of higher interest rates on the stock’s valuation.

Dodge noted that Brookfield’s investment in container-leasing company Triton International is exceeding its underlying assumptions. BIP’s transport business is benefiting from the Triton acquisition as the Red Sea crisis has led to the lengthening of some shipping trade routes and increased global demand for containers.  

Meanwhile, the analyst expects BIP’s capital deployment to be focused on tuck-in opportunities in its existing businesses. He highlighted that the company’s acquisition pipeline also includes large-scale opportunities focused on Asia-Pacific, North America and Europe. The analyst expects new investment activity to pick pace through 2024.

“We believe BIP’s portfolio companies are performing well, the yield is attractive and valuation appears undemanding,” said Dodge.

Dodge ranks No. 582 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 68% of the time, with each delivering an average return of 10.6%. (See Brookfield Infrastructure’s Insider Trading Activity on TipRanks)

Realty Income

This week’s final dividend pick is Realty Income (O). It is a real estate investment trust that invests in diversified commercial real estate and has a portfolio of over 15,450 properties in the U.S. and seven countries in Europe.

On May 15, the company paid a monthly dividend of $0.257 per share. Overall, based on the annualized dividend amount of $3.08 per share, the stock’s dividend yield stands at 5.6%.  

In reaction to Realty Income’s first-quarter results, RBC Capital analyst Brad Heffern reiterated a buy rating on Realty Income stock with a price target of $58. The analyst noted that Q1 2024 results slightly exceeded his expectations, marked by an impressive capitalization rate of 8.2% on acquisitions.

Heffern added that the vast majority of the first-quarter acquisitions were in Europe, with the region accounting for 95% of the acquisition volumes. The company attributed the opportunity in Europe to improved confidence in the macroeconomic outlook and motivated sellers. In comparison, higher interest rates and macro uncertainty in the U.S. affected Q1 deal volumes. That said, the company expects the U.S. volumes to pick up in the second half, with a clearer picture of interest rates and the macro outlook.

“We think O has one of the highest-quality net lease portfolios in the space, with an above-average investment grade weighting, a strong industrial portfolio, and a high proportion of tenants with public reporting requirements,” said Heffern.

Heffern ranks No. 505 among more than 8,800 analysts tracked by TipRanks. His ratings have been profitable 48% of the time, with each delivering an average return of 12%. (See Realty Income Stock Buybacks on TipRanks)

 

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Top Wall Street analysts are upbeat about these dividend stocks

A Starbucks store is seen inside the Tom Bradley terminal at LAX airport in Los Angeles, California.

Lucy Nicholson | Reuters

Earnings season has a way of revealing which companies can thrive despite near-term headwinds and enhance shareholder returns in the long run.

With dividend-paying stocks, investors will want companies that have the strong balance sheets and cash flows needed to provide steady payments to shareholders. Analysts can dig through these details and identify stocks that could boost returns through dividends and price appreciation.  

Keeping that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

EOG Resources

Crude oil and natural gas exploration and production company EOG Resources (EOG) is first on this week’s list. On Nov. 2, EOG reported market-beating third-quarter results. It also announced a 10% increase in its regular quarterly dividend to 91 cents per share and a special dividend of $1.50 per share.

Additionally, EOG increased its cash return commitment from 2024 onwards to a minimum of 70% of annual free cash flow from the previous target of at least 60%. Considering just the regular dividends, EOG’s dividend yield stands at 2.9%.

Following the print, Siebert Williams Shank analyst Gabriele Sorbara reiterated a buy rating on EOG with a price target of $172, citing the company’s “blowout quarter” that exceeded expectations across all metrics. Commenting on the subdued Q4 2023 guidance, the analyst reminded investors that EOG has a long track record of beating its guidance on production, capital expenditure and costs.

The analyst noted the hike in EOG’s cash returns commitment and also pointed out that this year’s total cash returns (dividends plus share buybacks) are tracking at $4.1 billion, representing about 75% of its estimated FCF of $5.5 billion.      

“We maintain our Buy rating on its track record of execution and shareholder returns with its cash rich balance sheet (~$5.33 billion) providing differentiation and optionality,” said Sorbara.

Sorbara holds the 434th position among more than 8,600 analysts on TipRanks. The analyst’s ratings have been successful 46% of the time, with each rating delivering an average return of 10.9%. (See EOG Resources Financial Statements on TipRanks). 

Coterra Energy

Another energy player, Coterra Energy (CTRA), recently announced better-than-anticipated third-quarter earnings. The company raised its 2023 production guidance, driven by faster cycle times and strong well productivity.

In Q3 2023, Coterra returned $211 million to shareholders, including $151 million via dividends and $60 million through share repurchases. Overall, the company’s year-to-date shareholder return of $839 million represents 91% of its free cash flow.

Management reiterated its commitment to return over 50% of its annual free cash flow to shareholders through its annual regular dividend of 80 cents per share and share repurchases. Based on just the regular dividend, CTRA offers a dividend yield of about 3%.  

Mizuho analyst Nitin Kumar, who ranks No. 124 out of more than 8,600 analysts on TipRanks, thinks that in a quarter where several exploration and production companies have attributed their strong volumes to improving operating efficiencies, CTRA still stands out in his opinion as its beat-and-raise performance was driven by both well timing and productivity.

Further, he highlighted that the company raised its 2023 oil production outlook by 3% compared to peers who increased their guidance by about zero to 1%, on average.

Kumar reiterated a buy rating on CTRA stock with a price target of $42 and designated it a top pick, noting, “CTRA returned ~84% of 3Q23 FCF via its dividend and buybacks, and is on track to return ~80% of 2023 FCF (vs. target of 50%+).”

Kumar’s ratings have been profitable 63% of the time, with each delivering an average return of 17%. (See CTRA Technical Analysis on TipRanks)

Crescent Energy

Kumar is also bullish on another dividend stock: Crescent Energy (CRGY), an independent energy company that develops and operates oil and natural gas properties. On Nov. 6, the company announced its third-quarter results and declared a quarterly dividend of 12 cents per share, payable on Dec. 4. CRGY offers a dividend yield of 4.6%.  

Commenting on the third-quarter results, Kumar said that CRGY reported an oil-driven production and EBITDAX (earnings before interest, taxes, depreciation, amortization and exploration expense) beat, with lower capital expenditure.

Kumar noted that following Crescent’s two Western Eagle Ford acquisitions, the company is already displaying impressive capital efficiency improvements, realizing about 20% drilling and completions well cost savings compared to the prior operator. This suggests an incrementally better 2024 outlook compared to the company’s preliminary soft forecast, the analyst said.  

“Moreover, the company is further demonstrating it can deliver on its acquisition-driven model in the public market arena, which should give investors additional confidence in the strategy,” said Kumar.

In line with his bullish stance, Kumar reiterated a buy rating on CRGY with a price target of $19. (See CRGY Insider Trading Activity on TipRanks)

Diamondback Energy

Diamondback Energy (FANG) is an oil and natural gas company focused on assets in the Permian Basin in West Texas. On Nov. 6, it delivered better-than-projected third-quarter results. Also, the company announced a base dividend of 84 cents per share and a variable cash dividend of $2.53 per share, both payable on Nov. 24.

Diamondback said that the base and variable dividends combined indicate an annualized yield of more than 8%. It is worth noting that FANG also enhanced shareholder returns through share repurchases worth $56 million in Q3 2023.  

In reaction to the results and dividend announcement, RBC Capital analyst Scott Hanold said that Diamondback’s execution remains strong. He added that the company’s shareholder return strategy is differentiated, noting, “FANG quickly pivoted to higher levels of dividends, but was still able to execute buybacks and among the lowest relative points during the last quarter.”

The analyst noted that the company repurchased shares worth $1.9 billion at an average 6% discount to market prices since the start of 2022. He pointed out FANG’s discipline to purchase shares only during periods of significant price disconnects from the stock’s intrinsic value.

Hanold maintained a buy rating on FANG stock and raised the price target to $175 from $170 to reflect stronger free cash flow and stock buybacks executed at accretive value point. He ranks No. 16 among more than 8,600 analysts on TipRanks. His ratings have been successful 64% of the time, with each rating delivering an average return of 24.4%. (See Diamondback Hedge Fund Trading Activity on TipRanks)

Starbucks

Finally, there is coffee chain Starbucks (SBUX), which impressed investors with its fiscal fourth-quarter beats earlier this month. The demand for the company’s pricier beverages and higher traffic in the domestic market boosted its quarterly performance.  

The company also announced its long-term strategy called “Triple Shot Reinvention with Two Pumps,” which will focus on elevating the brand, bolstering and scaling digital presence, and expanding globally, while unlocking efficiency and reinvigorating partner culture.

Coming to shareholder returns, in September, Starbucks announced a 7.5% rise in its quarterly dividend to 57 cents per share, payable on Nov. 24. Starbucks initiated its dividend payments in 2010 and has increased its dividend for 13 straight years at a compound annual growth rate of about 20%. SBUX offers a dividend yield of 2.2%.

Following the fiscal Q4 results and updates on the long-term strategy, BTIG analyst Peter Saleh reiterated a buy rating on SBUX with a price target of $125. The analyst highlighted the company’s better-than-anticipated global same-store sales growth of 8% in fiscal Q4 and noted that traffic gains and solid operating margin fueled the earnings beat.

“We believe Starbucks has a compelling return profile as its unfolding sales and economic recovery is matched by continued global unit development and stronger shareholder return targets,” said Saleh.  

Saleh ranks No. 504 among more than 8,600 analysts tracked by TipRanks. His ratings have been profitable 58% of the time, with each delivering an average return of 9.10%. (See Starbucks’ Stock Charts on TipRanks)

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Top Wall Street analysts remain optimistic about these five stocks

The Netflix logo is seen on a TV remote controller in this illustration taken Jan. 20, 2022.

Dado Ruvic | Reuters

As the earnings season rolls on, investors are getting a glimpse into how companies are handling an array of macro pressures.

Analysts can pick apart these quarterly reports and help investors identify companies that can withstand near-term challenges and deliver attractive returns in the long term.

To that end, here are five stocks favored by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Netflix

Streaming giant Netflix (NFLX) recently delivered a beat on third-quarter earnings per share, with its crackdown on password sharing helping to add more subscribers to its platform.

Evercore analyst Mark Mahaney said that there were several key positives in the company’s third-quarter print, including 8.76 million subscriber additions, stronger-than-anticipated Q4 2023 subscriber addition guidance, and share buybacks of $2.5 billion. He also noted an increase in the 2023 free cash flow outlook to about $6.5 billion, from the previous guidance of at least $5 billion and a price hike for the basic and premium plans.

“We continue to believe that NFLX’s ad-supported offering and password-sharing initiatives constitute major Growth Curve Initiatives [GCI] – catalysts that will drive a material reacceleration in revenue and EPS growth,” said Mahaney.    

The analyst thinks that the company is pursuing these GCI catalysts from a position of strength, given that it is a global streaming leader based on several metrics, including revenue, subscriber base and viewing hours.

Mahaney reiterated a buy rating on NFLX stock with a price target of $500. Interestingly, Mahaney ranks No. 48 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 55% of the time, with each delivering a return of 25.4%, on average. (See Netflix Technical Analysis on TipRanks)

Nvidia

Next up is semiconductor giant Nvidia (NVDA). The stock has witnessed a stellar run this year, thanks to demand for NVDA’s chips in building generative artificial intelligence (AI) models and applications.

In a recently updated investor presentation, the company revealed roadmaps for its data center graphics processing units, central processing units and networking chipsets.

JPMorgan analyst Harlan Sur, who holds the 88th position out of more than 8,500 analysts on TipRanks, noted that NVDA’s product roadmaps indicate two major shifts. First, Nvidia has accelerated its product launch timing from a 2-year cycle to a 1-year cycle, which is expected to help the company keep pace with the growing complexity of large language compute workloads.

Regarding the second major shift, Sur said that the roadmaps indicated “more market segmentation (cloud/hyperscale/enterprise) by expanding the number of product SKUs [stock keeping units] that are optimized for a broad spectrum of AI workloads (training/inference).”

The analyst thinks that with these notable developments, the company is taking a multi-pronged approach to strengthen its data center market and technology. He reaffirmed a buy rating on the stock with a price target of $600, noting the growing demand for NVDA’s accelerated compute and networking silicon platforms and software solutions in the development of generative AI and large language models.

Sur’s ratings have been successful 64% of the time, with each rating delivering an average return of 18.2%. (See Nvidia Insider Trading Activity on TipRanks).

Instacart

Grocery delivery platform Instacart (CART) made its much-awaited stock market debut in September. Baird analyst Colin Sebastian recently initiated a buy rating on CART stock with a price target of $31.

Explaining his bullish stance, Sebastian said, “Despite a range of well-financed online and legacy retail competitors, Instacart enjoys an enviable combination of scale, retail integrations, vertical expertise, and proprietary technology.”

The analyst highlighted that the essence of Instacart’s business model is an asset-light partnership strategy. He also thinks that Instacart’s data and technology sophistication are its key competitive advantages. He believes that most food retailers might not be able to build similar internal e-commerce capabilities.

Most importantly, Sebastian views Instacart’s advertising business as one of the most successful launches of retail media, second only to e-commerce behemoth Amazon (AMZN). He pointed out that consumer packaged goods advertisers are promoting their products by leveraging Instacart’s performance ad formats that help in reaching target customers with relevant product ideas.   

Sebastian holds the 340th position among more than 8,500 analysts on TipRanks. His ratings have been successful 52% of the time, with each rating delivering an average return of 10.7%. (See Instacart Options Activity on TipRanks).

SLB

Oilfield services company SLB (SLB), formerly Schlumberger, recently reported better-than-expected third-quarter adjusted earnings. SLB stated that the oil and gas industry continues to gain from a multi-year growth cycle that has shifted to international and offshore markets, where the company claims to enjoy a dominant position.       

Goldman Sachs analyst Neil Mehta contends that while there are no clear near-term catalysts for SLB stock, the long-term growth story remains intact due to resilient customer spending. The analyst highlighted that Saudi Aramco is expected to spend about $245 billion through 2030, reflecting about 5% to 6% annual growth. Further, additional spending (at a modest growth rate) is anticipated from the United Arab Emirates’ ADNOC, Qatar and other players in the region.

Given that 80% of SLB’s revenue is from international and offshore markets, Mehta is confident that the company is well-positioned to leverage the long-term momentum in the Middle East. 

“SLB remains the preferred way to gain exposure to the international and offshore theme, with additional growth drivers in the expansion of its digital footprint with customers, which is margin accretive at ~40-45%, in our view,” said Mehta. 

Calling SLB a structural winner, particularly during pullbacks, Mehta reiterated a buy rating on the stock with a price target of $65. He ranks No. 155 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 65% of the time, with each delivering an average return of 12.5%. (See SLB’s Stock Charts on TipRanks) 

Tesla

Our final name this week is electric vehicle maker Tesla (TSLA). The company missed earnings and revenue guidance for the third quarter, with macro pressures, a highly competitive EV market and aggressive price cuts affecting its performance.

Mizuho analyst Vijay Rakesh noted that despite the sequential decline in the company’s Q3 gross and operating margin due to lower pricing and Cybertruck R&D expenses, they remain at the high end of the margins of legacy automakers and way above rival EV makers’ margins.

The analyst lowered his price target for TSLA stock to $310 from $330 to reflect near-term headwinds like margin pressure, macro weakness and Cybertruck ramp challenges. Nevertheless, he reiterated a buy rating, noting that the stock still trades at a discount to disruptors such as Nvidia, while also generating profitability at scale.

“We believe TSLA is prioritizing market share, technology, and cost leadership and is better positioned than peers to weather any turbulence to the broader Auto market,” said Rakesh.

Rakesh ranks No. 82 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 57% of the time, with each delivering a return of 18.6%, on average. (See Tesla Financial Statements on TipRanks)

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Top Wall Street analysts favor these five dividend stocks during tumultuous times

A sign bearing the logo for communications and security tech giant Cisco Systems Inc. is seen outside one of its offices in San Jose, California, Aug. 11, 2022.

Paresh Dave | Reuters

The market’s volatility as of late is making dividend-paying stocks seem all the more appealing to investors in search of some stability.

Investors must check the fundamentals of the dividend-paying company and its ability to sustain those payments over the long run before adding the stock to their portfolio.

Bearing that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Civitas Resources  

First on this week’s dividend list is Civitas Resources (CIVI), an oil and gas producer focused on assets in the Denver-Julesburg and Permian Basins. The company paid a dividend of $1.74 per share in late September, which included a quarterly base dividend of 50 cents per share and a variable dividend of $1.24.  

Civitas recently announced an agreement with Vencer Energy to acquire oil-producing assets in the Midland Basin of West Texas for $2.1 billion. The acquisition, anticipated to close in January 2024, is expected to boost CIVI’s free cash flow per share by 5% in 2024.  

Jefferies analyst Lloyd Byrne has a constructive view on the acquisition, as it enhances the company’s scale in the Midland at a relatively low price.

“We believe CIVI acquired one of the few Permian privates remaining that is accretive to asset quality,” said Byrne.

In line with his optimism on the deal, Byrne raised his price target for CIVI to $102 from $100 and reiterated a buy rating, saying that the stock remains cheap given an estimated free cash flow yield of about 23% in 2024.

Byrne ranks No. 64 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 62% of the time, with each delivering an average return of 32.1%. (See Civitas’ Stock Charts on TipRanks)  

Bristol Myers Squibb

Next up is biopharmaceutical company Bristol Myers Squibb (BMY). In September, the company announced a quarterly dividend of 57 cents per share, payable on Nov. 1. This dividend marks a year-over-year increase of 5.6%. BMY’s dividend yield stands at 4%.

On Oct. 8, BMY announced an agreement to acquire biotechnology company Mirati Therapeutics for a total consideration of up to $5.8 billion. The acquisition is expected to bolster the company’s oncology portfolio and help mitigate the loss of sales due to patent expirations in the years ahead. Importantly, BMY will gain access to Krazati, a key lung cancer medicine, which was approved in December 2022.

Given the ongoing commercial launch of Krazati, Goldman Sachs analyst Chris Shibutani views the proposed deal as a strategic positive for BMY, “potentially providing a bridge as its new product portfolio continues to seek its footing while its expansive developmental-stage pipeline incubates with much of its value not to be realized in the near-term.”

Krazati generated sales of over $13 million in the second quarter of 2023 and Goldman Sachs currently estimates the drug will deliver sales of $347 million, $1.8 billion, and $2.1 billion in 2025, 2030, and 2035, respectively. Overall, the analyst expects the Mirati acquisition to provide both commercial and pipeline support to Bristol Myers Squibb.

Shibutani reiterated a buy rating on BMY with a price target of $81. He holds the 288th position among more than 8,500 analysts on TipRanks. Moreover, 42% of his ratings have been profitable, with each generating an average return of 18.9%. (See BMY Blogger Opinions & Sentiment on TipRanks)

Chesapeake Energy

Another Goldman Sachs analyst, Umang Choudhary, is bullish on oil and gas exploration and production company Chesapeake Energy (CHK). The company returned about $515 million to shareholders year-to-date through the second quarter via base and variable dividends and share repurchases. 

It recently hiked its quarterly base dividend per share by 4.5% to $0.575. Considering only the base dividend, CHK offers a dividend yield of about 2.6%.

Following a meeting with Chesapeake’s management, Choudhary reaffirmed a buy rating on the stock with a price target of $91. The analyst noted that given the uncertainty in the natural gas price outlook, the company is focused on maintaining operational flexibility to adjust its capital expenditure based on gas prices.

The analyst added, “Management reiterated its focus on maintaining a strong balance sheet (including moving to investment grade) and capital returns (including growing fixed dividend + variable dividend based on commodity prices and counter-cyclical share repurchases).”

Choudhary ranks No.478 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 77% of the time, with each delivering a return of 39.4%, on average. (See Chesapeake Insider Trading Activity on TipRanks)

EOG Resources

Let’s look at another energy company: EOG Resources (EOG). Back in August, the company declared a quarterly dividend of $0.825 per share, payable on Oct. 31. Based on this quarterly dividend, the annual dividend rate comes to $3.30 per share, bringing the dividend yield to 2.5%.

Under its cash return framework, EOG is committed to return a minimum of 60% of annual free cash flow to shareholders through regular quarterly dividends, special dividends and share repurchases. EOG generated free cash flow of $2.1 billion in the first six months of 2023. Overall, the company’s robust free cash flow supports its attractive shareholder returns.

Ahead of the company’s third-quarter results, due in early November, Mizuho analyst Nitin Kumar reiterated a buy rating on EOG stock and slightly raised the price target to $158 from $157.

The analyst thinks that investors will likely focus on a potential special dividend and a hike in base dividend, as EOG continues to generate strong free cash flow. They might also pay attention to inventory depth and quality due to the underperformance of Eagle Ford and Permian wells. The analyst expects third-quarter 2023 EBITDA of $3.205 billion compared to the consensus estimate of $3.185 billion.

“We estimate a modest (~0.6%) beat on 3Q23 EBITDA from EOG with volumes in-line and pricing slightly ahead of consensus,” said Kumar.

Kumar ranks No.33 among more than 8,500 analysts on TipRanks. His ratings have been profitable 75% of the time, with each delivering an average return of 20.4%. (See EOG Financial Statements on TipRanks)

Cisco Systems

Computer networking giant Cisco Systems (CSCO) is the final dividend stock in this week’s list. The company returned $10.6 billion to shareholders through cash dividends and stock repurchases in fiscal 2023 (ended July 29). Fiscal 2023 marked the 12th consecutive year in which the company increased its dividend. Cisco offers a dividend yield of 2.9%.

Tigress Financial analyst Ivan Feinseth recently reiterated a buy rating on Cisco stock and increased the price target to $76 from $73. (See Cisco Hedge Fund Trading Activity on TipRanks). 

The analyst is bullish on the company’s long-term prospects and expects it to continue to benefit from higher spending on information technology due to the need for increased speed, network security and artificial intelligence implementation. He also expects the recently announced acquisition of cybersecurity firm Splunk to be an additional growth catalyst.

“CSCO’s industry-leading position and strong brand equity enable it to benefit from key secular IT trends, including cloud migration, AI development, the high-speed 5G network rollout, WiFi 6, and the increasing connectivity needs of the IoT [internet of things],” said Feinseth.

Overall, the analyst thinks that Cisco’s solid balance sheet and strong cash flows could support its growth initiatives, strategic acquisitions and enhance shareholder returns.

Feinseth holds the 349th position among more than 8,500 analysts on TipRanks. His ratings have been successful 57% of the time, with each rating delivering an average return of 9.6%.

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Top Wall Street analysts believe in the long-term potential of these stocks

An Amazon delivery truck at the Amazon facility in Poway, California, Nov. 16, 2022.

Sandy Huffaker | Reuters

Investors are confronting several headwinds, including macro uncertainty, a spike in energy prices and the unanticipated crisis in the Middle East.

Investors seeking a sense of direction can turn to analysts who identify companies that have lucrative long-term prospects and the ability to navigate near-term pressures. 

To that end, here are five stocks favored by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Amazon

We begin this week’s list with e-commerce and cloud computing giant Amazon (AMZN). While the stock has outperformed the broader market year to date, it has declined from the highs seen in mid-September.

JPMorgan analyst Doug Anmuth noted the recent sell-off in AMZN stock and highlighted certain investor concerns. These issues include the state of the U.S. consumer and retail market, rising competition, higher fuel costs and the Federal Trade Commission’s lawsuit. Also on investors’ mind is Amazon Web Services’ growth, with multiple third-party data sources indicating a slowdown in September.

Addressing each of these concerns, Anmuth said that Amazon remains his best idea, with the pullback offering a good opportunity to buy the shares. In particular, the analyst is optimistic about AWS due to moderating spending optimizations by clients, new workload deployment and easing year-over-year comparisons into the back half of the third quarter and the fourth quarter. He also expects AWS to gain from generative artificial intelligence.

Speaking about the challenging retail backdrop, Anmuth said, “We believe AMZN’s growth is supported by key company-specific initiatives including same-day/1-day delivery (SD1D), greater Prime member spending, & strong 3P [third-party] selection.”

In terms of competition, the analyst contends that while TikTok, Temu and Shein are expanding their global footprint, they pose a competitive risk to Amazon mostly at the low end, while the company is focused across a broad range of consumers.

Anmuth reiterated a buy rating on AMZN shares with a price target of $180. He ranks No. 84 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, with each delivering an average return of 16.6%. (See Amazon’s Stock Charts on TipRanks)  

Meta Platforms

Anmuth is also bullish on social media company Meta Platforms (META) and reaffirmed a buy rating on the stock. However, the analyst lowered his price target to $400 from $425, as he revised his model to account for higher expenses and made adjustments to revenue and earnings growth estimates for 2024 and 2025 due to forex headwinds.

The analyst highlighted that Meta is investing in the significant growth prospects in two big tech waves – AI and metaverse, while continuing to remain disciplined. (See META Insider Trading Activity on TipRanks)

“AI is clearly paying off in terms of incremental engagement from AI-generated content and Advantage+, and as discussed at Meta Connect, Llama 2 should drive AI experiences across the Family of Apps and devices, while Quest 3 is the most powerful headset Meta has ever shipped,” said Anmuth. Llama 2 is Meta’s new large language model.

The analyst expects Meta’s advertising business to continue to outperform, with AI investments bearing results and Reels anticipated to turn revenue-accretive soon. Overall, Anmuth is convinced that Meta’s valuation remains compelling, with the stock trading at 15 times his revised 2025 GAAP EPS estimate of $20.29.

Intel

We now move to semiconductor stock Intel (INTC), which recently announced its decision to operate its Programmable Systems Business (PSG) as a standalone business, with the intention of positioning it for an initial public offering in the next two to three years.

Needham analyst Quinn Bolton thinks that a standalone PSG business has several benefits, including autonomy and flexibility that would boost its growth rate. Operating PSG as a separate business would also enable the unit to more aggressively expand into the mid-range and low-end field programmable gate arrays segments with its Agilex 5 and Agilex 3 offerings.

Additionally, Bolton said that this move would help Intel drive a renewed focus on the aerospace and defense sectors, as well as industrial and automotive sectors, which carry high margins and have long product lifecycles. It would also help Intel enhance shareholder value and monetize non-core assets.  

“We believe the separation of PSG will further allow management to focus on its core IDM 2.0 strategy,” the analyst said, while reiterating a buy rating on the stock with a price target of $40.   

Bolton holds the No.1 position among more than 8,500 analysts on TipRanks. His ratings have been successful 69% of the time, with each rating delivering an average return of 38.3%. (See Intel Hedge Fund Trading Activity on TipRanks). 

Micron Technology

Another semiconductor stock in this week’s list is Micron Technology (MU). The company recently reported better-than-feared fiscal fourth-quarter results, even as revenue declined 40% year over year. The company’s revenue outlook for the first quarter of fiscal 2024 exceeded expectations but its quarterly loss estimate was wider than anticipated.  

Following the print, Deutsche Bank analyst Sidney Ho, who holds the 66th position among more than 8,500 analysts on TipRanks, reiterated a buy rating on MU stock with a price target of $85. 

The analyst highlighted that the company’s fiscal fourth quarter revenue exceeded his expectations, fueled by the unanticipated strength in NAND shipments through strategic buys, which helped offset a slightly weaker average selling price.

Micron’s management suggested that the company’s overall gross margin won’t turn positive until the second half of fiscal 2024, even as pricing trends seem to be on an upward trajectory. However, the analyst finds management’s gross margin outlook to be conservative.

The analyst expects upward revisions to gross margin estimates. Ho said, “Given that the industry is in the very early stages of a cyclical upturn driven by supply discipline across the industry, we remain confident that positive pricing trends will be a strong tailwind over the next several quarters.”

Ho’s ratings have been profitable 63% of the time, with each delivering a return of 21.5%, on average. (See Micron Blogger Opinions & Sentiment on TipRanks)  

Costco Wholesale

Membership warehouse chain Costco (COST) recently reported strong fiscal fourth-quarter earnings, despite macro pressures affecting the purchase of big-ticket items.

Baird analyst Peter Benedict explained that the earnings beat was driven by below-the-line items, with higher interest income more than offsetting an increased tax rate.

“Steady traffic gains and an engaged membership base underscore COST’s strong positioning amid a slowing consumer spending environment,” said Benedict.

The analyst highlighted other positives from the report, including higher digital traffic driven by the company’s omnichannel initiatives and encouraging early holiday shopping commentary.

Further, the analyst thinks that the prospects for a membership fee hike and/or a special dividend continue to build. He added that the company’s solid balance sheet provides enough capital deployment flexibility, including the possibility of another special dividend.   

Benedict thinks that COST stock deserves a premium valuation (about 35 times the next 12 months’ EPS) due to its defensive growth profile. The analyst reiterated a buy rating on the stock and a price target of $600.

Benedict ranks No. 123 among more than 8,500 analysts tracked on TipRanks. Moreover, 65% of his ratings have been profitable, with each generating an average return of 12.2%. (See COST’s Technical Analysis on TipRanks)

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Top Wall Street analysts expect these dividend stocks to boost portfolio returns

A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018.

Sergio Moraes | Reuters

Dividend-paying stocks are looking even more attractive as investors grapple with a spike in bond yields and a tumultuous stock market.

With that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Exxon Mobil

First on this week’s list is dividend aristocrat Exxon Mobil (XOM). The energy giant offers a yield of 3.4%. The company’s dividend hike of 3.4% last year marked the 40th consecutive year of annual dividend growth. Exxon’s dividends are backed by solid earnings and cash flows.

In the second quarter, the company distributed $8 billion to shareholders through share repurchases of $4.3 billion and dividends of $3.7 billion. It generated free cash flow of $5 billion in the June quarter.

Mizuho analyst Nitin Kumar reiterated a buy rating on Exxon with a price target of $139 after attending the company’s Product Solutions Spotlight event. The analyst said that the company is on track to meet its target of boosting its product solutions earnings by $10 billion by 2027 compared to $6 billion reported in 2019.

“With 1H23 annualized earnings at $11.5 billion, the company is halfway through that target, with most of the benefit to date from cost reductions,” noted Kumar.

He expects key strategic projects that have recently commenced, like Beaumont crude expansion and chemical expansions at Baytown, and major projects planned for 2024 to 2027, such as the Singapore Resid upgrade project, to help Exxon deliver most of the targeted improvement in earnings by 2027.

Kumar ranks No.67 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 71% of the time, with each delivering a return of 19.8%, on average. (See Exxon Insider Trading Activity on TipRanks)

Coterra Energy

Kumar is also bullish on Coterra Energy (CTRA), an oil and gas exploration and production company with major operations in the Permian Basin, Marcellus Shale and Anadarko Basin. Earlier this year, the company increased its annual base dividend by 33% to 80 cents per share.

The company’s shareholder return strategy is to distribute 50% of its free cash flow via base dividends, share repurchases and variable dividends. CTRA realigned its return strategy for 2023 to give importance to buybacks over variable dividends. In the first six months of 2023, it paid $303 million through dividends and made share repurchases worth $325 million, with the total shareholder return representing 94% of free cash flow.

Last month, Kumar hosted investor meetings with CTRA’s management and said the key takeaway was that the company is confident about delivering solid returns on investment in most commodity price scenarios. In particular, management highlighted the flexibility and optionality of CTRA’s asset base and capital allocation strategy.

“In our opinion, the common thread between their choices is the potential to outperform the three-year (2023-25) plan that calls for ~5%+ oil growth for ~$2.0-2.1bn of total capex – either through less capex or more volumes – but without a degradation of capital efficiencies,” said Kumar.

Calling CTRA his top pick, Kumar reiterated a buy rating on the stock with a price target of $42. (See Coterra Financial Statements on TipRanks)

Brookfield Infrastructure Partners

Next on this week’s dividend list is Brookfield Infrastructure (BIP), which operates assets in the utilities, transport, midstream, and data sectors. BIP paid a quarterly dividend of $0.3825 per unit on Sept. 29, which reflects a 6% year-over-year increase in its distribution. The company offers a dividend yield of 5.5%.

At an investor day event held last month, management discussed its goal to deliver more than 12% growth in funds from its operations per unit as part of its 1- to 3-year outlook.

RBC Capital analyst Robert Kwan, who ranks 194th out of over 8,500 analysts tracked on TipRanks, noted that the company’s targeted FFO/unit growth is expected to be partially driven by its significant organic capital backlog, mainly in the data center business.

The analyst also thinks that given the capital constraints in the current backdrop due to a slowdown in fundraising activity, an entity like Brookfield has the potential to enhance returns by investing capital above its 12% to 15% equity internal rate of return (IRR) target range.   

“We believe that the unit price weakness is an attractive entry point based on a 5% current distribution yield with potential for double-digit underlying FFO/unit growth,” said Kwan.

Kwan reaffirmed a buy rating on BIP stock with a price target of $45. His ratings have been profitable 64% of the time, with each delivering an average return of 10.8%. (See BIP Stock Chart on TipRanks)

American Electric Power

Another RBC Capital analyst, Shelby Tucker, is bullish on utility stock American Electric Power (AEP). On Oct. 2, the company named Charles E. Zebula as its new chief financial officer and reaffirmed its 2023 operating earnings outlook of $5.19 to $5.39 per share and long-term operating earnings growth rate of 6% to 7%.

AEP paid a quarterly dividend of 83 cents per share on Sept. 8, its 453rd consecutive quarterly cash dividend. It offers a dividend yield of 4.6%.

Recently, Tucker lowered the price target for AEP to $90 from $103 to reflect a high interest environment but reiterated a buy rating. The analyst said that the stock remains one of the firm’s top picks in 2023 and one of the best-in-class utilities.

The analyst thinks that AEP’s $40 billion regulated capital spending plan, focusing on transmission deployment, offers strong resiliency against a challenging macro backdrop and cost inflation. Tucker also expects the company to benefit from the incentives under the Inflation Reduction Act.  

“We believe AEP deserves a slight premium on valuations from rapid decarbonization of its generation fleet and robust investments in regulated renewable,” the analyst said.

Tucker holds the 367th position among more than 8,500 analysts on TipRanks. Moreover, 61% of his ratings have been profitable, with each generating an average return of 8.1%. (See AEP Blogger Opinions & Sentiment on TipRanks) 

Darden Restaurants

Darden Restaurants (DRI), the owner of Olive Garden and other popular brands, delivered better-than-anticipated fiscal first-quarter results, despite the pullback in consumer spending affecting the company’s fine dining segment.   

The company paid $159 million in dividends and deployed about $143 million toward share repurchases in the fiscal first quarter. With a quarterly dividend of $1.31 per share (annualized dividend of $5.24), DRI stock’s dividend yield is 3.7%.       

Following the results, JPMorgan analyst John Ivankoe reiterated a buy rating on DRI stock but lowered the price target to $174 from $176.

The analyst noted that the company’s same-store sales growth of 5% surpassed his estimate of 4.4%, with its Olive Garden and LongHorn Steakhouse chains offsetting the softness in fine dining. Also, DRI’s same-store sales growth outperformed the industry average of 0.9%.       

“Finally, the 10%+ TSR [total shareholder return] (EPS + annual dividend yield) remains intact for F24/25,” said Ivankoe.  

Ivankoe holds the 854th position among more than 8,500 analysts tracked on TipRanks. Moreover, 60% of his ratings have been profitable, with each generating an average return of 7.1%. (See DRI Hedge Fund Trading Activity on TipRanks)

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Top Wall Street analysts pick these five stocks for compelling returns

Shantanu Narayen, CEO, Adobe.

Mark Neuling | CNBC

Investors are grappling with uncertainty after a difficult September left the major averages reeling.

However, the current scenario also offers an opportunity to pick stocks that could generate attractive returns despite short-term pressures.

To that end, here are five stocks favored by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Adobe

Software giant Adobe (ADBE) recently reported fiscal third-quarter earnings. The company is experiencing strength in subscriptions to its cloud-based software offerings.

Impressed with the quarter’s print, Deutsche Bank analyst Brad Zelnick boosted his price target for ADBE stock to $610 from $550 and reaffirmed a buy rating. The analyst said the results reinforce his view of Adobe as a winner in an emerging generative artificial intelligence world.  

Ahead of the results, Adobe announced the commercial availability of its Firefly generative AI offering and increased the pricing of its Creative Cloud product to reflect the integration of the new AI features. The analyst said that this pricing strategy could drive the adoption of the core Creative Cloud product with the embedded generative AI tools, which is better than selling the new features separately.

“This strategy should enable creatives to better appreciate the productivity benefits of generative AI more quickly, and make Firefly-powered generative AI offerings a critical part of their workflows, creating competitive differentiation as well as increasing the overall value of Creative Cloud,” said Zelnick.

The analyst also sees additional monetization opportunities through new standalone offerings like GenStudio. 

Zelnick ranks No.50 among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 71% of the time, with each delivering a return of 15.5%, on average. (See Adobe’s Technical Analysis on TipRanks)   

Salesforce

Zelnick is also bullish on another cloud software vendor: Salesforce (CRM). The analyst reiterated a buy rating on the stock with a price target of $260 following the company’s Dreamforce annual conference and investor meetings with the CEO of a Salesforce consulting partner and a global consulting firm executive.

He said that the Dreamforce event emphasized Salesforce’s leadership in AI customer relationship management (CRM), supported by a combination of “trust, data and interoperability.” (See Salesforce Hedge Fund Trading Activity on TipRanks).

The analyst noted that data cloud commentary from partners was optimistic, based on real demand and ongoing implementations.             

“With strong pricing power, unparalleled access to enormous trusted data, an eventual rotation back to front office spending, as well as management’s laser-focus on margins and cash flow growth, we believe Salesforce shares are poised to outperform,” said Zelnick.

Pinterest

Image-sharing platform Pinterest (PINS) held its investor day on Sept.19. At the event, the company said that it expects a compound annual growth rate in the mid to high teens for its revenue and an earnings before interest, taxes, depreciation and amortization margin that is in the low 30% range over the next three to five years.

Baird analyst Colin Sebastian noted that management expects an upside to its long-term targets if the underlying trends improve. The analyst highlighted that the shopping experience remains vital in the company’s overall strategy. Specifically, 96% of searches on Pinterest are unbranded, providing advertisers a huge opportunity to target users, with more than 50% of them using the platform to shop.

“Importantly, the Amazon ads integration seems to be going well, exceeding management’s initial expectations, with Pinterest using its recommendation engine to target Amazon ads at its own users,” added Sebastian.

The analyst reaffirmed a buy rating on PINS stock and a price target of $34, with a valuation that reflects rapid growth rate, an early stage of market share gains, as well as significant cash flow generation over the long term.

Sebastian ranks 328th out of more than 8,500 analysts tracked on TipRanks. Also, 54% of his ratings have been profitable, with an average return of 11.7%. (See Pinterest Blogger Opinions & Sentiment on TipRanks) 

Microsoft

Tech giant Microsoft (MSFT) recently made several announcements spanning its Microsoft 365 Copilot, Bing, Windows and Surface products.

Goldman Sachs analyst Kash Rangan thinks that the developments announced by the company reflect solid execution against its Copilot product roadmap and the strength of its OpenAI partnership.

“Microsoft’s speed to market, strong presence across the tech stack and well-established footprint within the enterprise give us confidence that Microsoft is well positioned to drive growth on the back of these announcements and be a key leader in the Gen-AI era,” said Rangan.

The analyst thinks that the company should be able to capture a solid part of its more-than-$135 billion total addressable market within Microsoft 365, with additional opportunities across its Azure, Windows, Dynamics and Bing/Edge offerings. He reiterated a buy rating on MSFT with a price target of $400.

Rangan holds the 509th position among more than 8,500 analysts on TipRanks. His ratings have been profitable 58% of the time, with each delivering an average return of 8.5%. (See Microsoft Financial Statements on TipRanks)

FedEx

We end this week’s list with logistics giant FedEx (FDX). The company recently reported fiscal first-quarter earnings that beat expectations, but a decline in revenue due to macro pressures. The bottom line benefited from the company’s cost-reduction initiatives.

Evercore analyst Jonathan Chappell, who holds the 156th position out of more than 8,500 analysts on TipRanks, noted the improvement in the company’s full-year earnings guidance range, despite the lower revenue outlook. The earnings outlook was fueled by the cost reductions under FedEx’s DRIVE program that is targeting savings of $1.8 billion in fiscal 2024.

Chappell said that FedEx grabbed about 400,000 packages of volume from its closest peer (UPS), with a lower possibility of these share gains reversing immediately. Further, FedEx gained almost 5,000 shipments per day from the liquidation of a key competitor (Yellow).

The analyst said, “FDX continues to build a track record of execution on its ambitious cost-cutting and efficiency targets, rendering the equity as a unique investment opportunity for when demand returns.”

Chappell maintained a buy rating on FDX and raised his price target to $291 from $276, saying that FDX remains his top pick. His ratings have been successful 65% of the time, with each rating delivering an average return of 19.7%. (See FedEx Insider Trading Activity on TipRanks).  

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Top Wall Street analysts are bullish on these dividend stocks

Michael Wirth, CEO of Chevron.

Adam Jeffery | CNBC

Dividend-paying stocks can help enhance portfolio returns, but investors will need to perform their due diligence as they sift through the names.

Investors should carefully assess these companies by paying attention to various factors, including the dividend growth rate and the ability to consistently generate sufficient cash flows to support payments.

Bearing that in mind, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Public Service Enterprise Group

First on this week’s dividend list is Public Service Enterprise Group (PEG), one of the leading electric and gas companies in the U.S. Last month, PEG reaffirmed its full-year earnings guidance, as the company expects growth in regulated operations, the realization of higher average hedged prices and its cost control efforts to offset the impact of higher interest rates and lower pension income.

Earlier this year, PEG increased its quarterly dividend by 5.6% to 57 cents per share (annualized dividend of $2.28), marking the 19th annual increase for the company. PEG’s dividend yield is 3.8%.

RBC Capital analyst Shelby Tucker highlighted that PEG’s subsidiary Public Service Electric and Gas (PSE&G), which is a franchised public utility in New Jersey, enjoys solid cash flows from the nuclear assets in its power generation business.

While the company faces cost and pension expense headwinds this year, the analyst expects a 6% EPS compound annual growth rate through 2027 and 5.5% annual dividend growth.

“We believe the primary attraction to PEG is a strong pipeline of electric and gas investments in New Jersey with low equity dilution risk,” said Tucker.

Tucker reiterated a buy rating on PEG while slightly lowering the price target to $69 from $70. He ranks No. 305 among more than 8,500 analysts tracked by TipRanks. Tucker’s ratings have been profitable 63% of the time, with each rating delivering a return of 9%, on average. (See PEG’s Insider Trading Activity on TipRanks)

Southern Company

Tucker is also bullish on Southern Company (SO), a gas and electric utility giant. Earlier this month, the analyst called SO a “quality utility operating in constructive regulatory environments.” He reiterated a buy rating on the stock and increased the price target to $80 from $78.

With the company’s much-delayed Vogtle nuclear project’s commercial operation date on the horizon, the analyst thinks that investors are finally hopeful of better times ahead. The company expects its Vogtle Unit 4 to be placed in service during late fourth quarter of 2023 or the first quarter of 2024.

The analyst sees the possibility of SO commanding a premium compared to its peers as the year progresses and heads into 2024. Post-Vogtle, Tucker expects the company to accelerate its EPS growth and use the higher cash flows to boost dividends.

Note that in April, Southern announced a 2.9% increase in its quarterly dividend to $0.70. This is the 22nd consecutive year in which SO has raised its dividend. SO offers a dividend yield of 4%.  

“We note that SO’s utilities mostly operate in strong economic environments, which should support investment opportunities throughout the decade,” said Tucker. (See Southern Company Stock Chart on TipRanks)

Chevron

Next up is dividend aristocrat Chevron (CVX). In January, the oil and gas giant increased its quarterly dividend by about 6% to $1.51 per share, making 2023 the 36th straight year with a higher dividend payment. CVX’s dividend yield stands at 3.6%.

On Sept. 13, Goldman Sachs hosted roundtable discussions with Chevron’s senior management. Analyst Neil Mehta said that the firm remains bullish on CVX due to its peer-leading capital returns profile, inflecting upstream operations expected in 2025 supported by higher Tengiz/Permian volumes and relative valuation.

The analyst contends that near-term pressures like risks around the Tengiz project are largely reflected in CVX’s valuation. He highlighted management’s constructive view on the upstream business, reaffirming nearly 3% CAGR forecast for production over the next five years.

“The company reiterated its commitment to competitive shareholder returns, which we believe is a core differentiating factor for CVX over the next few years,” added Mehta, who ranks No. 181 among more than 8,500 analysts on TipRanks. 

The analyst currently expects about a 9% capital return yield in 2024/2025, higher than the U.S. energy majors peer average of about 7%. Overall, Mehta reiterated a buy rating on Chevron with a price target of $187.

Mehta’s ratings have been successful 67% of the time, with each rating delivering an average return of 13%. (See Chevron Hedge Fund Trading Activity on TipRanks)

Broadcom

Semiconductor company Broadcom (AVGO) managed to beat the Street’s fiscal third-quarter estimates. However, investors seemed unsatisfied as the quarterly outlook was in line with the analysts’ expectations, unlike that of chip giant Nvidia (NVDA), which crushed estimates on artificial intelligence tailwinds.

Broadcom generated $4.6 billion in free cash flow in the fiscal third quarter of 2023. It paid a cash dividend worth $1.9 billion in the quarter and repurchased 2.4 million shares.

Earlier, AVGO increased its quarterly dividend for fiscal 2023 by 12% to $4.60 per share (annualized $18.40). This hike reflected the company’s twelfth consecutive increase in annual dividends since it initiated dividends in fiscal 2011. It offers a dividend yield of 2.2%

Baird analyst Tristan Gerra recently reiterated a buy rating on AVGO stock while boosting the price target to $1,000 from $900 to reflect solid growth opportunities, mainly in the company’s custom application-specific integrated circuit (ASIC) business for AI applications. Gerra also noted that the company’s free cash flow remains strong.

The analyst said that recent channel checks revealed a surge in Broadcom’s custom ASIC business to over 2 million units for next year, which was more than 2.5 times his unit base expectation for 2023. He added that generative AI investments are accounting for nearly all the growth in Broadcom’s semiconductor business, with AI-related revenue now exceeding $1 billion.

Gerra holds the 514th position among more than 8,500 analysts tracked on TipRanks. Moreover, 54% of his ratings have been profitable, with each generating an average return of 8.7%. (See Broadcom’s Financial Statements on TipRanks)

Bristol-Myers Squibb

We end this week’s list with biopharmaceutical company Bristol-Myers Squibb (BMY). The company repurchased 17 million shares for $1.2 billion and made dividend payments of $2.4 billion in the first six months, ended June 30.

The quarterly dividend of $0.57 per share for 2023 indicates a 5.6% year-over-year increase, marking the 14th consecutive year of dividend hikes. BMY’s dividend yield stands at 3.9%.

Following the company’s Research and Development (R&D) Day held in New York on Sept. 14, Goldman Sachs analyst Chris Shibutani reaffirmed a buy rating on BMY stock with a price target of $81.

At the event, management highlighted how new product launches and the acceleration of research and development productivity would drive future revenue growth, addressing concerns about the Inflation Reduction Act and loss of exclusivity of key drugs.

Shibutani noted that management expressed continued confidence in the 2030 new product launch revenue goal of more than $25 billion (non-risk adjusted), based on currently visible late-stage and already commercializing opportunities.

Commenting on BMY’s capital allocation program, Shibutani said that management’s priority remains business development (BD). “Beyond BD, the company remains committed to growing its dividend and will continue to be opportunistic with share buybacks,” the analyst added.

Shibutani holds the 271th position among more than 8,500 analysts tracked on TipRanks. In all, 44% of his ratings have been profitable, with each generating an average return of 20.5%. (See BMY Options Activity on TipRanks)

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Top Wall Street analysts say these stocks have the best growth prospects

CrowdStrike IPO at the Nasdaq exchange June 12, 2019.

Source: Nasdaq

While macro uncertainty continues to distract investors, it is prudent to focus on companies that are well-positioned to navigate challenges with their solid execution and deliver attractive growth over the long term by capitalizing on secular trends. 

Here are five such stocks chosen by Wall Street’s top analysts, according to TipRanks, a platform that ranks analysts based on their past performance.

Zscaler

First, we will look at cybersecurity solutions provider Zscaler (ZS). Earlier this month, the company reported its fiscal fourth-quarter results and outlook, which topped Wall Street’s expectations. That said, management cautioned that deals are taking longer to close due to a challenging macro backdrop.

Praising Zscaler’s performance, TD Cowen analyst Shaul Eyal said that the rising demand for the company’s Zero Trust solutions and disciplined spending drove the fourth-quarter outperformance.

The analyst noted that over the past seven quarters, Zscaler’s annual recurring revenue (ARR) has doubled to $2 billion from $1 billion. Other interesting points that the analyst focused on included the company’s large deals, a strong pipeline, and growing federal contracts. (Zscaler serves 12 of the 15 U.S. cabinet-level agencies.)  

Further, the company continues to invest in AI and sees huge growth potential for its AI-powered features. It provides data protection capabilities to prevent the leakage of sensitive data through generative AI.  

Overall, the analyst reiterated a buy rating on ZS stock with a price target of $195, saying, “Investments in AI, Cloud and go-to-market are set to accelerate growth.”

Eyal holds the 9th position among more than 8,500 analysts tracked on TipRanks. In all, 70% of his ratings have been profitable, with each generating an average return of 25.5%. (See Zscaler’s Financial Statements on TipRanks)

CrowdStrike Holdings

Another cybersecurity stock in this week’s list is CrowdStrike (CRWD), which recently reported upbeat fiscal second-quarter results and issued solid guidance.

In reaction to the impressive performance, Needham analyst Alex Henderson raised his price target for CRWD stock to $200 from $170 and reiterated a buy rating on the stock. The analyst noted that the company achieved strong growth in new products under its Identity, Cloud, and LogScale Security Information and Event Management (SIEM) offerings.

The analyst also highlighted management’s commentary about the company’s generative AI cybersecurity product called Charlotte AI, which they believe can immensely improve execution for customers by automating workflows. He added that the use of AI helped the company enhance its own adjusted operating margin, which increased by 472 basis points to 21.3% in the fiscal second quarter.

Henderson called CRWD one of his top recommendations in cybersecurity and said, “Crowd is taking market share with relatively stable pricing and strong new product uptake.”

The analyst also said that the company’s managed services, which are core to the Falcon Complete offering, are enjoying high demand and differentiate the platform from others like Microsoft (MSFT).    

Henderson ranks 162nd among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 58% of the time, with each rating delivering a return of 15.1%, on average. (See CrowdStrike’s Technical Analysis on TipRanks) 

Chipotle Mexican Grill

Next up is Mexican fast food chain Chipotle Mexican Grill (CMG). Baird analyst David Tarantino, who ranks 357 out of more than 8,500 analysts on TipRanks, said that CMG remains his top idea for investors with a 12-month horizon.

The analyst observed that the stock has pulled back since the mixed second-quarter results due to concerns about late Q2 2023 and early Q3 traffic, subdued Q3 restaurant margin outlook, and macro factors. Nevertheless, he feels that this pullback has created an attractive opportunity to buy CMG stock based on multiple positive catalysts that could emerge in the months ahead.

“Specifically, we expect signs of strong same-store traffic momentum and further pricing actions to lead to an upward bias to EPS estimates and support robust valuation metrics on CMG heading into year-end,” said Tarantino.

Additionally, he sees the possibility of CMG accelerating its unit growth to the high end of its target of 8% to 10% annually, supported by the hiring of additional construction managers this year. Tarantino estimates that a combination of about 10% unit growth and mid-single-digit comparable sales could drive low-to-mid teens revenue growth and more than 20% EPS increase, a profile which he believes deserves a premium valuation.

Tarantino reaffirmed a buy rating on CMG stock with a price target of $2,400. His ratings have been successful 62% of the time, with each rating delivering an average return of 10%. (See CMG Hedge Fund Trading Activity on TipRanks).

Lululemon

Athletic apparel retailer Lululemon (LULU) impressed investors with its fiscal second-quarter performance and improved outlook. The company experienced strong momentum in North America and a spike in its international business, mainly due to robust sales in China.

Commenting on the 61% growth in sales from Greater China, Guggenheim analyst Robert Drbul said that he continues to believe that China holds significant growth potential for Lululemon, as the company aims to quadruple international revenues by 2026. He also highlighted that Lulu intends to open a majority of its 35 new international stores, scheduled for this year, in China. 

The analyst raised his Fiscal 2023 and 2024 earnings estimates and believes that demand for the company’s merchandise remains strong, as competitive pressures from upcoming athletic brands seem overestimated.  

Drbul maintained a buy rating on LULU and a price target of $440, justifying that the company “stands to benefit from favorable secular tailwinds (health, wellness, casualization, and fitness, including at-home).”

Drbul ranks No. 958 out of more than 8,500 analysts tracked on TipRanks. Additionally, 57% of his ratings have been profitable with an average return of 5%. (See Lululemon Insider Trading Activity on TipRanks)

Acushnet Holdings

The last stock on this week’s list is Acushnet Holdings (GOLF), a manufacturer of golf products. Tigress Financial analyst Ivan Feinseth believes that the company is well-positioned to benefit from the ongoing growth in golf, driven by product launches and biannual new golf ball design introductions.

The analyst highlighted that GOLF’s strong brand name continues to be a growth catalyst, as its Titleist brand golf balls remain the preferred choice of PGA and LPGA Tour players. He also noted the strong growth in Titleist golf clubs, Titleist gear, and FootJoy golf wear segments, fueled by a wide range of innovative launches, including new TSR models that rapidly emerged as the most-played model on the PGA tour.

Feinseth increased his price target for GOLF to $68 from $62 and reiterated a buy rating, while emphasizing that the company is enhancing shareholder returns through ongoing dividend increases and share repurchases.

“GOLF’s incredible brand equity, driven by its best-in-class and industry-leading product lines, including FootJoy and Titleist, are major assets and the primary drivers of its premium market valuation,” said Feinseth.  

Feinseth holds the 289th position among more than 8,500 analysts tracked on TipRanks. His ratings have been profitable 58% of the time, with each rating delivering an average return of 10.9%. (See Acushnet Stock Chart on TipRanks)

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Top Wall Street analysts select these dividend stocks to enhance returns

Verizon CEO Hans Vestberg on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 22, 2019.

Brendan McDermid

When markets get choppy, dividends offer investors’ portfolios some cushioning in the form of income.

Dividends provide a great opportunity to enhance investors’ total returns over a long-term horizon. Investors shouldn’t base their stock purchases on dividend yields alone, however: They ought to assess the strength of a company’s fundamentals and analyze the consistency of those payments first. Analysts have insight into those details.

To that effect, here are five attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.

Verizon Communications

Let us first look at telecommunication giant Verizon (VZ). The stock offers a dividend yield of 8%. Last week, the company declared a quarterly dividend of 66.50 cents per outstanding share, an increase of 1.25 cents from the previous quarter. This marked the 17th consecutive year the company’s board approved a quarterly dividend increase.

Recently, Citi analyst Michael Rollins upgraded Verizon and its rival AT&T (T) to buy from hold. The analyst increased his price target for Verizon stock by $1 to $40, while maintaining AT&T’s price target at $17.

Rollins noted that several headwinds like competition, industry structure, higher rates and concerns about lead-covered cables have affected investor sentiment on telecom companies. That said, he has a more constructive outlook for large cap telecom stocks.

“The wireless competitive environment is showing positive signs of stabilization that should help operating performance,” said Rollins, who ranks No. 298 out of more than 8,500 analysts on TipRanks.

The analyst contended that the recently announced price hikes by Verizon and AT&T indicate a stabilizing competitive backdrop for wireless. He further noted that customers continue to hold onto their phones for longer, which is reducing device upgrade costs and stabilizing churn.

Overall, the analyst sees the possibility of some of the ongoing market concerns fading over the next 12 months. Also, he expects the prospects for improved free cash flow to lower net debt leverage and support the dividend payments. 

Rollins has a success rate of 65% and each of his ratings has returned 13.3%, on average. (See Verizon Hedge Fund Trading Activity on TipRanks)

Medtronic

Medical device company Medtronic (MDT) recently announced a quarterly dividend of $0.69 per share for the second quarter of fiscal 2024, payable on Oct. 13. MDT has increased its annual dividend for 46 consecutive years and has a dividend yield of 3.5%. 

Reacting to MDT’s upbeat fiscal first-quarter results and improved earnings outlook, Stifel analyst Rick Wise explained that continued recovery in elective procedure volumes, supply chain improvements and product launches helped drive revenue outperformance across multiple business units.

The analyst thinks that Medtronic’s guidance indicates that it is now well positioned to more consistently deliver better-than-expected growth and margins. He also expressed optimism about the company’s transformation initiatives under the leadership of CEO Geoff Martha.

“We view Medtronic as a core healthcare holding and total return vehicle in any market environment for investors looking for safety and stability,” said Wise, while raising his price target to $95 from $92 and reaffirming a buy rating.

Wise holds the 729th position among more than 8,500 analysts on TipRanks. Moreover, 58% of his ratings have been profitable, with each generating a return of 6.3%, on average. (See Medtronic Insider Trading Activity on TipRanks)   

Hasbro

Another Stifel analyst, Drew Crum, is bullish on toymaker Hasbro (HAS). He increased the price target for Hasbro to $94 from $79 while maintaining a buy rating, and moved the stock to the Stifel Select List.

Crum acknowledged that HAS stock has been a relative laggard over the past several years due to many fundamental issues that resulted in unhappy investors.

Nevertheless, the analyst is optimistic about the stock and expects higher earnings power and cash flow generation, driven by multiple catalysts like portfolio adjustments, further cost discipline, greater focus on gaming and licensing, as well as a new senior leadership team.

Crum noted that Hasbro grew its dividend for 10 consecutive years (2010-2020) at a compound annual growth rate of over 13%, with the annual payout representing more than 50% of free cash flow, on average. However, any upward adjustments were limited following the Entertainment One acquisition, with only one increase during 2021 to 2023.

The analyst thinks that given the current dividend yield of around 4%, Hasbro’s board might be less inclined to approve an aggressive raise from here. That said, with expectations of higher cash flow generation, Crum said that “the company should have more flexibility around growing its dividend going forward.”

Crum ranks 322nd among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 59% of the time, with each rating delivering an average return of 12.9%. (See Hasbro Stock Chart on TipRanks)

Dell Technologies

Next up is Dell (DELL), a maker of IT hardware and infrastructure technology, which rallied after its fiscal second-quarter results far exceeded Wall Street’s estimates. The company returned $525 million to shareholders through share repurchases and dividends in that quarter. DELL offers a dividend yield of 2.1%.

Evercore analyst Amit Daryanani maintained a buy rating following the results and raised his price target for DELL stock to $70 from $60. Daryanani ranks No. 249 among more than 8,500 analysts tracked by TipRanks.

The analyst highlighted that Dell delivered impressive upside to July quarter revenue and earnings per share (EPS), driven by broad-based strength across both infrastructure and client segments. Specifically, the notable upside in the infrastructure segment was fueled by GPU-enabled servers.

The analyst also noted that Dell generated $3.2 billion of free cash flow in the quarter and is currently running at over $8 billion free cash flow on a trailing twelve-month basis. This implies that the company has “plenty of dry powder” to significantly enhance its capital allocation program, he added.

“We think the catalysts at DELL are starting to add up in a notable manner ranging from – cap allocation update during their upcoming analyst day, AI centric revenue acceleration and potential S&P 500 inclusion,” said Daryanani.

In all, 60% of his ratings have been profitable, with each generating an average return of 11.5%. (See Dell’s Financial Statements on TipRanks)

Walmart

We finally come to big-box retailer Walmart (WMT), which is a dividend aristocrat. Earlier this year, the company raised its annual dividend for fiscal 2024 by about 2% to $2.28 per share. This marked the 50th consecutive year of dividend increases for the company. WMT’s dividend yield stands at 1.4%.

Following WMT’s upbeat fiscal second-quarter results and upgraded full-year outlook, Baird analyst Peter Benedict highlighted that traffic gains in stores and online channels reflect that consumers are choosing Walmart for a blend of value and convenience.

Benedict also noted that the company’s efforts to drive improved productivity and profitability are gaining traction.

The analyst reiterated a buy rating on WMT and raised the price target to $180 from $165, saying that the new price target “assumes ~23x FY25E EPS, slightly above the stock’s five-year average of ~22x given the company’s defensive sales mix, market share gains, and an improved long-term profit/ROI profile as alternative revenue streams scale.” 

Benedict ranks 94th among more than 8,500 analysts tracked by TipRanks. His ratings have been profitable 68% of the time, with each rating delivering an average return of 13.7%. (See Walmart’s Technical Analysis on TipRanks)  

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