The U.S. stock market has been experiencing some turbulence lately, with concerns about an economic slowdown. However, one way investors can navigate these uncertain times is by investing in dividend-paying stocks. These stocks provide a steady stream of income, which can help smooth out the bumps in the market.
When looking for dividend stocks to add to your portfolio, it can be helpful to consider the recommendations of top Wall Street analysts. These experts have a track record of success when it comes to predicting the performance of stocks. Here are three dividend-paying stocks that are highly recommended by Wall Street’s top pros on TipRanks, a platform that evaluates analysts based on their past performance.
Pfizer
First up is health-care giant Pfizer (PFE). The company recently announced better-than-expected second-quarter results, driven by cost-cutting measures and strong sales of non-Covid products. Pfizer raised its full-year guidance, reflecting the strong demand for its non-Covid business.
In the first half of 2024, Pfizer returned $4.8 billion to shareholders through dividends. The stock currently boasts a dividend yield of 5.9%.
Following the positive Q2 results, Goldman Sachs analyst Chris Shibutani reiterated a buy rating on PFE stock and raised the price target to $34. He highlighted the strength of Pfizer’s heart disease drug, Vyndaqel, and cancer treatment Padcev as key drivers of growth. Shibutani also noted the company’s capital allocation priorities, which focus on dividends and debt reduction.
Shibutani is ranked No. 462 among more than 8,900 analysts tracked by TipRanks, with a success rate of 46%. (See Pfizer Stock Charts on TipRanks)
Civitas Resources
Next, we have oil and natural gas producer Civitas Resources (CIVI). The company recently announced its second-quarter results and declared a quarterly dividend of $1.52 per share. This dividend consists of a base dividend of 50 cents per share and a variable dividend of $1.02 per share.
Civitas has revised its shareholder-return program to provide more flexibility in rewarding shareholders with variable returns. Starting in Q3 2024, the company’s variable component will include a combination of buybacks and dividends.
Following the Q2 results, Mizuho analyst William Janela reaffirmed a buy rating on CIVI stock with a price target of $98. He praised Civitas for its solid execution and cost savings in the Permian assets acquired in 2023.
Janela is ranked No. 406 among analysts tracked by TipRanks, with a success rate of 52%. (See Civitas Resources Stock Buybacks on TipRanks)
IBM
Lastly, tech giant IBM has impressed investors with better-than-expected results for the second quarter. The company now expects full-year free cash flow to exceed $12 billion, up from its previous forecast.
IBM returned $1.5 billion to shareholders in dividends in Q2 and currently offers a dividend yield of 3.5%. The company’s dividends are supported by strong cash flows and a solid growth outlook.
After the earnings report, Evercore analyst Amit Daryanani reaffirmed a buy rating on IBM stock with a price target of $215. He noted the overall strength of IBM’s software and infrastructure businesses, despite challenges in the consulting sector.
Daryanani is ranked No. 429 among analysts tracked by TipRanks, with a success rate of 54%. (See IBM Ownership Structure on TipRanks)
Conclusion:
Investing in dividend-paying stocks is a smart strategy for generating passive income and navigating market volatility. Pfizer, Civitas Resources, and IBM are three stocks recommended by top Wall Street analysts for their strong financials and consistent dividend payments. By following the advice of these experts, investors can build a more resilient portfolio that can weather economic uncertainties.
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