Dividend paying stocks can give investors the opportunity to protect their portfolio from market fluctuations and also boost their income.
Picking the right dividend stocks can be a challenge for investors. Wall Street’s best analysts have insight into whether a company can deliver attractive dividend yields and earnings over the long term.
Here are three dividend stocks that look attractive, according to top Wall Street pros at TipRanks, a platform that ranks stocks based on analysts’ past performance.
Kimberly-Clark
Consumer goods giant Kimberly-Clark (KMB) is our first dividend stock of the week. The owner of popular brands like Huggies and Kleenex is a Dividend King, a term used to describe a company that has increased its dividend for at least 50 consecutive years.
In the first quarter of 2024, Kimberly-Clark returned $452 million to shareholders in the form of dividends and share repurchases. With a quarterly dividend of $1.22 per share ($4.88 annualized), KMB offers a dividend yield of 3.5%.
Earlier this month, RBC Capital analyst Nik Mody upgraded KMB shares to a “buy” rating from a “hold” rating and raised his price target from $126 to $165. The upgrade follows a thorough assessment of the company after its analyst day event in March, and reflects KMB’s “transformation from a cost-focused company to a growth-oriented company.”
Modi believes KMB is well positioned for faster and more reliable growth and is now confident the company can achieve its long-term targets of a 40% gross margin and 3%+ compound annual revenue growth (in local currencies) by 2030.
Analysts attribute Kimberly-Clark’s transformation to the leadership of CEO Mike Hsu, who acknowledged that the company’s decision to reorganize into three business units (North America, International Personal Care, and International Family and Professional) was a step in the right direction, which has lowered product costs and improved time to market for KMB.
Modi is ranked 593rd among the more than 8,800 analysts tracked by TipRanks. His ratings have produced profits 61% of the time and have delivered an average return of 6.8%. (See Kimberly-Clark Stock Buybacks on TipRanks)
Code Energy
next Code Energy CHRD, a Williston Basin oil and gas operator, paid a base dividend of $1.25 per share and a floating dividend of $1.69 per share in June.
Chord Energy recently announced the completion of its acquisition of Enerplus, a transaction the company expects will strengthen its position in the Williston Basin with increased scale, low-cost inventory and solid shareholder returns.
Following the announcement, Mizuho analyst William Gianella reaffirmed his buy recommendation on CHRD shares with a price target of $214, noting that the firm raised its estimate for full-year transaction synergies by $50 million, or 33%, to more than $200 million.
Giannella believes the focus going forward will be on expanding the combined company’s scale, given the well productivity of both Cord Energy and EnerPlus in the Williston Basin. Additionally, the transaction would provide above-average cash returns with a dividend yield of about 9% and below-average financial leverage.
“Relative valuation remains attractive, with the stock trading at a discount to peers on FCF/EV. [Free Cash Flow/ Enterprise Value]” Janella said.
Janella is ranked 333rd out of more than 8,800 analysts tracked by TipRanks, and his ratings are successful 57% of the time, delivering an average return of 29.9%. (See Chord Energy stock chart on TipRanks)
Cisco Systems
Third, we have dividend-paying technology stocks. Cisco Systems (CSCO). The networking giant paid out $2.9 billion to shareholders in the third quarter of fiscal 2024, including dividends worth $1.6 billion and share repurchases of $1.3 billion. With a quarterly dividend of 40 cents per share, CSCO’s dividend yield is 3.5%.
Jefferies analyst George Notter reiterated his buy recommendation on Cisco shares with a $56 price target in response to the company’s recent investor and analyst day. The analyst said he felt more positive about the company’s prospects after the event and that his strategy regarding Splunk has become clearer. Cisco completed its acquisition of cybersecurity company Splunk in March 2024.
At the event, the company maintained its guidance for the fourth quarter of fiscal 2024 and continues to expect low- to mid-single-digit revenue growth in fiscal 2025. Regarding the company’s goals for fiscal 2026 and 2027, Notter said, “I thought the 4-6% year-over-year revenue growth target was pretty good.” Cisco expects earnings per share (EPS) to grow 6-8% and gross margins to improve in fiscal 2026-2027.
Analysts said Cisco’s long-term growth prospects look good, given that the company has grown revenue at a rate of 1-3 percent over the past decade.
Notter is ranked 629th out of more than 8,800 analysts tracked by TipRanks, and his ratings have produced profits 62% of the time, with an average return of 10.1%. (See Cisco hedge fund activity on TipRanks)
