Investors seeking to add dividend-paying stocks to their portfolio may want to consider companies with a proven track record of consistent payments and robust financials. Darden Restaurants (DRI) is one such company that stands out as an attractive option in this regard. The company, which operates popular brands like Olive Garden, LongHorn Steakhouse, and Yard House, recently reported mixed results for the fourth quarter of fiscal 2024.
While Darden exceeded analysts’ earnings expectations, its sales slightly missed the Street’s consensus due to increased discounting by competitors. However, the company remains committed to its shareholders, having issued $628 million in dividends and allocated $454 million to share repurchases in fiscal 2024. Moreover, Darden announced a dividend increase of nearly 7%, raising the quarterly dividend to $1.40 per share, resulting in a dividend yield of 3.5%.
BTIG analyst Peter Saleh remains bullish on DRI stock, reiterating a buy rating with a price target of $175. Saleh is confident in Darden’s ability to achieve double-digit total shareholder returns, driven by factors such as modest pricing increases, advertising initiatives, and easing inflation. With a strong historical performance and a solid outlook, Darden Restaurants is positioned as one of the industry’s top operators.
International Seaways (INSW): A Dividend Opportunity in Energy Transportation
Another promising dividend stock for investors to consider is International Seaways (INSW), a tanker company that provides energy transportation services for crude oil and petroleum products. The company recently paid a combined dividend of $1.75 per share, representing 60% of its first-quarter adjusted net income.
Stifel analyst Benjamin Nolan reiterated a buy rating on INSW stock and raised the price target to $68 from $66. Nolan is optimistic about the tanker market’s strength, driven by increasing global oil consumption, limited new ship supply, and geopolitical concerns. He expects International Seaways to generate higher cash flows, supported by favorable market conditions. With an estimated $200-300 million in excess cash flow, INSW has the potential to sustain high supplemental dividends.
Nolan’s positive outlook is backed by INSW’s solid financial performance and strategic positioning in the energy transportation sector. With room for dividend growth and strong cash flow generation, International Seaways presents an attractive opportunity for dividend investors.
Citigroup (C): A Banking Giant with Strong Dividend Potential
Lastly, investors looking for dividend stocks may find Citigroup (C) to be a compelling option. With a quarterly dividend of 53 cents per share, Citigroup offers a yield of 3.3%. Following the bank’s Services Investor Day, Goldman Sachs analyst Richard Ramsden reiterated a buy rating on Citi stock and raised the price target to $72.
Ramsden is optimistic about Citigroup’s strategic transformation plan, which aims to drive revenue growth across its core businesses. With a focus on risk control, data quality, and market-leading positions in its Services business, Citi is well-positioned to achieve its financial targets. The bank’s extensive global network, long-term client relationships, and investments in technology further support Ramsden’s positive outlook on Citi’s dividend potential.
Dividend-paying stocks like Darden Restaurants, International Seaways, and Citigroup offer investors an opportunity to build a strong and diversified portfolio while generating consistent income. By carefully selecting companies with a proven track record of dividend payments and solid financial performance, investors can enhance their returns and achieve long-term financial goals.