As President Donald Trump steps into office, the stock market has been riding a wave of enthusiasm. However, investors are left pondering the potential impacts of tax cuts and tariffs. In turbulent times, dividend-paying stocks can provide a cushion for investors.
In today’s unpredictable economic climate, those seeking steady returns might find solace in robust dividend stocks. To choose wisely, investors can rely on insights from top Wall Street analysts, who evaluate companies’ capacity to pay reliable dividends supported by strong cash flows.
Here’s a look at three notable dividend-paying stocks endorsed by elite Wall Street professionals, according to TipRanks, a platform that ranks analysts based on past performance.
Starting off our list, we have AT&T, a powerhouse in telecommunications. Not long ago, AT&T announced a quarterly dividend of $0.2775 per share, scheduled for February 3rd, boasting a dividend yield of almost 5%.
Joseph Bonner, an analyst at Argus Research, recently upgraded AT&T from hold to buy, setting a target price of $27. His optimism stems from AT&T’s recent analyst day, where they underscored their strategy and long-term goals. Bonner highlighted AT&T’s enhanced 2024 earnings per share outlook and optimistic projections for shareholder returns and cash flow growth. He observed that the company is wrapping up some challenging acquisitions and is focusing on the synergy of wireless and fiber internet services.
Bonner is confident that AT&T’s efforts to cut costs, modernize its network, and accelerate revenue will eventually pay off. He believes their strategic investments in wireless and fiber opportunities make for an exciting growth prospect. At the analyst day, AT&T expressed that they weren’t looking at dividend increases or mergers and acquisitions while they continue investing in 5G and fiber networks and reducing debt. Nevertheless, they remain dedicated to protecting their dividends after a significant cut in March 2022. Notably, AT&T plans to return $40 billion to shareholders between 2025 and 2027, through $20 billion in dividends and $20 billion in share buybacks.
Joseph Bonner ranks 310th among more than 9,300 analysts tracked by TipRanks, with a successful rating impact 67% of the time and an average return of 14.1%. Check out AT&T Stock Buybacks on TipRanks for more insights.
Next, let’s turn our attention to Chord Energy, an independent oil and gas firm operating in the Williston Basin. Their capital return strategy aims to return over 75% of free cash flow, recently providing a base dividend of $1.25 per share and a variable dividend of 19 cents.
Ahead of their Q4 2024 results, William Janela from Mizuho reiterated a buy rating on Chord Energy with a $178 target, marking it as a Top Pick. Janela noted that his estimates for cash flow per share and earnings before interest, taxes, depreciation, and exploration costs align closely with market expectations.
He mentioned that Chord Energy stands out with more predictable guidance compared to competitors, thanks to preliminary direction already provided. Janela foresees improved capital efficiency, especially post-integration of Enerplus assets.
“A more defensive balance sheet—with about 0.2x net debt/EBITDX, among the lowest in exploration and production peers—positions Chord Energy well amid oil price volatility,” Janela remarked.
While Chord Energy trailed behind its peers in 2024, Janela pointed out that its shares are now trading at a greater discount on EV/EBITDX and FCF/EV metrics. He believes this underestimates the company’s growth scale and high-quality assets in the Bakken basin following the Enerplus acquisition. With his Q4 2024 free cash flow estimate sitting at $235 million, Janela anticipates a $176 million cash return, including $76 million in base dividends, with much of the variable free cash flow likely going to share buybacks.
William Janela ranks 656th out of over 9,300 analysts on TipRanks, with 52% of his ratings proving lucrative and delivering an average return of 19.2%. For more, see Chord Energy Insider Trading Activity on TipRanks.
Lastly, Nitin Kumar from Mizuho shares a positive outlook on Diamondback Energy, an independent oil and gas company focusing on the Permian Basin. For Q3 2024, Diamondback Energy distributed a base dividend of 90 cents per share.
With their Q4 2024 results set to be announced in late February, Kumar projects EBITDA, free cash flow, and capital expenditure figures of $2.543 billion, $1.243 billion, and $996 million, respectively, aligning closely with Wall Street’s consensus.
Kumar noted that Diamondback’s fortitude is evident in maintaining its preliminary 2025 outlook, originally set during their Endeavor Energy Resources acquisition announcement in February 2024, highlighting robust execution and modest cost savings.
Reaffirming a buy rating with a $207 price target, Kumar emphasized Diamondback’s leadership in cash returns, with half of free cash flow going back to investors, including a robust base dividend yield. He also mentioned their strong cost control and unit margins, crediting the acquisition’s successful completion with enhancing asset quality and scale.
Ranking 119th among more than 9,300 analysts tracked by TipRanks, Kumar’s ratings have been successful 67% of the time, delivering an average return of 14.1%. Check Diamondback Ownership Structure on TipRanks for further details.
