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These Three Dividend Stocks Offer Higher Returns According to Wall Street Analysts

April 21, 2024
minute read

In the preceding week, investor morale took a hit due to a combination of macroeconomic uncertainties and geopolitical strains, causing turbulence in the primary market indices.

For those investors seeking a safe harbor amidst the volatility, dividend-paying stocks emerge as an attractive option. These stocks not only offer potential for stable returns but also indicate the financial robustness of the companies behind them.

Wall Street analysts, renowned for their meticulous scrutiny of financial data, present a pathway to such stability. Through comprehensive evaluations of dividend-paying enterprises, they gauge their capacity for sustained dividend growth over extended periods.

Highlighted below are three such dividend stocks recommended by top analysts on TipRanks, a platform revered for its analyst ranking system based on historical performance.

Enterprise Products Partners stands out as the first contender. As a midstream energy services provider, EPD boasts a commendable track record, having augmented its cash distributions for 25 consecutive years, exhibiting a compound annual growth rate of 7%. Its recent declaration of a quarterly cash distribution of $0.515 per unit, marking a 5.1% increase from the previous year, underscores its stability. With an enticing dividend yield of 7.1%, EPD garners attention. RBC Capital's Elvira Scotto reaffirms this sentiment, reiterating a buy rating and setting a price target of $35. Scotto’s optimism stems from EPD's strategic investments in organic growth projects, particularly in the Permian Basin, ensuring sustained growth over the next decade. Scotto's track record, positioning her at 84th among over 8,700 analysts on TipRanks, adds credence to her endorsement.

Moving on to Goldman Sachs, a stalwart in the investment banking sector, recent financial reports showcase its resilience and profitability. Bolstered by a surge in trading and investment banking revenues, Goldman Sachs exceeded Q1 expectations, returning $2.43 billion to shareholders through a combination of share repurchases and dividends. A dividend yield of 2.7% makes GS an appealing choice.

Argus analyst Stephen Biggar, upgrading his rating to buy with a price target of $465, attributes this to the bank's robust performance during the investment banking upswing. Biggar anticipates sustained revenue growth driven by promising trends in equity and debt underwriting, as well as substantial increases in M&A activity. His ranking within the top 603 analysts on TipRanks lends credibility to his bullish outlook.

Cisco Systems emerges as the final recommendation, known for its prowess in networking equipment manufacturing. Cisco's recent dividend increase to 40 cents per share, coupled with a dividend yield of 3.3%, signals its commitment to rewarding shareholders. Bank of America Securities analyst Tal Liani, elevating his rating to buy with a revised price target of $60, points to three catalysts: AI-related advancements, burgeoning security business, and synergies from recent acquisitions.

Liani foresees a resurgence in networking growth driven by Cisco's competitive edge in Ethernet-based AI infrastructures. Despite near-term challenges, Liani remains optimistic, guided by management's prudent guidance and anticipated growth in Cisco's security segment. Liani's standing among the top 532 analysts on TipRanks validates his endorsement.

In conclusion, amidst market uncertainties, dividend-paying stocks offer a beacon of stability. Backed by thorough analysis from esteemed Wall Street analysts, enterprises like Enterprise Products Partners, Goldman Sachs, and Cisco Systems present compelling investment opportunities for those seeking reliable returns in tumultuous times.

Cathy Hills
Associate Editor
Eric Ng
John Liu
Editorial Board
Bryan Curtis
Adan Harris
Managing Editor
Cathy Hills
Associate Editor

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