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Major stock averages have recently broken new records, but there are plenty of triggers that could shake things up, including geopolitical tensions and the upcoming U.S. presidential election.
Investors looking for some stability in their portfolio may want to consider high-quality dividend stocks, especially those with a track record of paying consistent income.
Analysts thoroughly examine a company’s fundamentals and ability to pay and grow dividends over the long term.
Here are three attractive dividend stocks, according to top Wall Street experts at TipRanks, a platform that ranks analysts based on past performance.
enbridge
energy infrastructure company enbridge (ENB) is our first dividend pick of the week. The company moves about 30% of North American crude oil production and about 20% of the natural gas consumed in the United States.
Enbridge has increased its dividend for 29 years. The dividend yield is 7.7%.
Following the recent Investor Day event, RBC Capital analyst Robert Kwan reiterated his buy rating on ENB stock. The analyst believes recent developments, including regulatory approval for the acquisition of East Ohio Gas Company, support market confidence in the company’s ability to grow revenue.
It’s worth noting that East Ohio Gas is the largest of the three utilities Enbridge has agreed to acquire from Dominion Energy (the other two being Questar Gas and North Carolina Public Service Company).
“Dominion Utilities represents the next episode in Enbridge’s series of growth platforms,” said Kwan.
The analyst highlighted that the company has extended its growth target to 2026 and expects earnings before interest, taxes, depreciation and amortization to grow in the range of 7% to 9% from 2023 to 2026. From 2022 to 2025, it will be 6%. The company also expects to be able to increase its annual dividend due to this forecast.
Mr. Kwan is ranked #191 out of over 8,700 analysts tracked by TipRanks. His ratings are successful 67% of the time, with an average return of 10.2% on each rating. (See Boost your hedge fund activity on TipRanks)
american bank
next american bank (BAC), one of the world’s leading banking institutions. The bank returned $12 billion to shareholders in 2023 through dividends and share buybacks.
The bank announced a first-quarter 2024 dividend of 24 cents per share, to be paid on March 29. BAC stock has a dividend yield of 2.6%.
RBC Capital analyst Gerald Cassidy recently reiterated his buy rating on Bank of America, with a price target of $39. The analyst is optimistic about Chairman and CEO Brian Moynihan’s leadership, who is helping the bank steadily improve its profitability by focusing on expenses and sound credit underwriting principles. I’m watching.
Cassidy also noted that BAC’s balance sheet is strong, with a common equity Tier 1 ratio of 11.8% and an incremental leverage ratio of 6.1% as of December 31, 2023.
“Also, our strong capital base and PPNR (earnings before taxes and provisions) should allow us to pay and grow dividends even in a downturn,” Cassidy said.
The analyst highlighted the bank’s growing deposit market share, dominant position in global capital markets and the stock’s attractive valuation. He expects increased adoption of BAC’s mobile products to improve profitability.
Mr. Cassidy is ranked #143 out of over 8,700 analysts tracked by TipRanks. His evaluations made him successful 62% of the time, with an average return of 14.9% on each evaluation. (See his BAC technical analysis on TipRanks)
pepsico
This week’s third dividend candidate is a snack food and beverage giant pepsico (pep). The company last month reported fourth-quarter profits that beat expectations, even though demand pressure in its North American business led to lower sales and lower than analysts’ expectations.
Nevertheless, PepsiCo announced a 7% increase in its annual dividend to $5.42 per share, effective from the June 2024 dividend. This is the first increase in 52 years.n.d. We achieved dividend increases for consecutive years. PepsiCo’s current dividend yield is 2.9%.
Overall, PepsiCo aims to return approximately $8.2 billion in cash to shareholders in 2024, including $7.2 billion in dividends and $1 billion worth of stock buybacks.
On March 18, Morgan Stanley analyst Dara Mohsenian upgraded PepsiCo stock to buy with a price target of $190. The analyst cited two reasons behind the early decline in stock prices. That’s due to valuation concerns and his own opinion that the consensus organic sales growth (OSG) guidance appears to be too high.
However, Mohsenian said, “Both of these issues have now been resolved, with PEP fundamentally bottoming out in the first quarter, and PEP’s valuation compression has gone too far to return it above consensus and peer OSG.” “After and ahead of a strong modulation in the second half of the year, we will be active buyers here.” . ”
The analyst named PepsiCo as a top candidate, arguing that the market has not fully priced in the growth prospects of PepsiCo’s international business.
Mr. Mohsenian is ranked #383 out of over 8,700 analysts tracked by TipRanks. Analysts estimate that he is profitable 68% of the time, and the average return for each is 9.2%. (See PepsiCo stock buyback on TipRanks)
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