As macroeconomic woes and geopolitical tensions continue to shake up the markets, investors are increasingly turning to dividend-paying stocks for stability. Wall Street analysts play a crucial role in identifying attractive dividend stocks by conducting thorough analyses of the financials of companies and their ability to grow dividends over the long term.
One of the top dividend stocks recommended by Wall Street analysts is Enterprise Products Partners (EPD), a midstream energy services provider. The company has a solid track record of increasing its cash distribution for 25 consecutive years, with a compound annual growth rate of 7%. Recent announcements of a 5.1% year-over-year increase in cash distribution reflect the company’s commitment to rewarding investors. With a dividend yield of 7.1%, EPD is an attractive option for income-seeking investors.
RBC Capital analyst Elvira Scotto remains bullish on EPD, reiterating a buy rating with a price target of $35 after a recent investor update call. The company’s focus on organic growth projects in the Permian Basin positions it well for consistent growth over the next decade. Scotto is confident in EPD’s ability to support its growth investments and expects mid-single-digit growth in distributions
Another dividend stock worth considering is Goldman Sachs (GS), one of the leading investment banks in the U.S. The bank recently reported strong first-quarter results driven by a rise in trading and investment banking revenue. Share repurchases and dividends totaling $2.43 billion were returned to shareholders, reflecting the company’s commitment to creating value for investors. With a dividend yield of 2.7%, GS offers a compelling option for income investors.
Argus analyst Stephen Biggar upgraded his rating for Goldman Sachs to buy from hold, with a price target of $465, citing the strength of the company’s franchise in the investment banking space. Biggar is optimistic about the current recovery in the industry and expects improved revenues in the second half of 2024. Factors such as a significant increase in capital formation and IPO issuance are expected to drive growth for Goldman Sachs in the near term.
Cisco Systems (CSCO), a networking equipment maker, is another dividend stock recommended by analysts. The company announced a 3% increase in dividends in the second quarter of fiscal 2024, reflecting its commitment to returning value to shareholders. With a dividend yield of 3.3%, CSCO is an attractive option for income investors.
Bank of America Securities analyst Tal Liani upgraded Cisco Systems to buy from hold, with a price target of $60, citing three catalysts for growth: AI-related tailwinds, growth in the security business, and synergies from recent acquisitions. Liani expects the company’s networking business to rebound driven by share gains in AI buildouts of hyperscalers. Additionally, growth in the security business and new product launches are expected to drive accelerated growth for Cisco Systems in the coming quarters.
Dividend-paying stocks offer investors an opportunity to generate stable income and potentially benefit from capital appreciation. By following the recommendations of top Wall Street analysts and conducting thorough research, investors can identify attractive dividend stocks with strong growth potential. Consider investing in companies like Enterprise Products Partners, Goldman Sachs, and Cisco Systems to build a diversified portfolio that aligns with your investment objectives.