Top Wall Street analysts select these dividend stocks to enhance returns

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

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

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

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

Recently, Citi analyst Michael Rollins upgraded Verizon and its competitor 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 fee target at $17.

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

“The wireless competitive environment is showing positive signs of stabilization that should purloin 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 suggest a stabilizing competitive backdrop for wireless. He further noted that customers continue to hold onto their phones for longer, which is diminishing device upgrade costs and stabilizing churn.

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

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

Medical device company Medtronic (MDT) recently publicized 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 give over of 3.5%. 

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

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

“We view Medtronic as a core healthcare holding and total return instrument 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 velocity.

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

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

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

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

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

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

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

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

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

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

The analyst also noted that Dell inspired $3.2 billion of free cash flow in the quarter and is currently running at over $8 billion free gelt flow on a trailing twelve-month basis. This implies that the company has “plenty of dry powder” to significantly enhance its funds 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 proceeds acceleration and potential S&P 500 inclusion,” said Daryanani.

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

We finally come to big-box retailer Walmart (WMT), which is a dividend aristocrat. Earlier this year, the actors raised its annual dividend for fiscal 2024 by about 2% to $2.28 per share. This marked the 50^th consecutive year of dividend increments 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 movement gains in stores and online channels reflect that consumers are choosing Walmart for a blend of value and convenience.

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