Investors can enhance their portfolios and increase returns by investing in dividend-paying stocks.
To identify promising opportunities, investors should look for companies with a consistent track record of paying dividends supported by strong financial performance.
Here are three appealing dividend stocks favored by top analysts on Wall Street, as per TipRanks, a platform that evaluates analysts based on their historical accuracy.
Darden Restaurants
The first recommended dividend stock is Darden Restaurants (DRI), the owner of popular full-service dining brands like Olive Garden, LongHorn Steakhouse, and Yard House. In the latest fiscal quarter, Darden reported mixed results, surpassing earnings estimates but falling slightly short in sales due to increased competitive pricing.
In fiscal year 2024, Darden distributed $628 million in dividends, allocated $454 million to share repurchases, and raised its quarterly dividend by nearly 7% to $1.40 per share, resulting in a 3.5% dividend yield.
Following the earnings report, BTIG analyst Peter Saleh reiterated a buy rating on DRI with a target price of $175, citing the company’s projected double-digit total shareholder return and positive growth outlook driven by pricing strategies, marketing efforts, and inflation moderation.
Saleh highlighted Darden’s consistent industry outperformance in sales and restaurant margins, positioning it as a resilient player in the market.
Saleh is ranked No. 360 out of over 8,900 analysts tracked by TipRanks, with a success rate of 61% and an average return of 11.7%. (See Darden’s Financial Statements on TipRanks)
International Seaways
The next recommended stock is International Seaways (INSW), a tanker company providing energy transportation for crude oil and petroleum products. In June, the company paid a dividend of $1.75 per share, representing 60% of its first-quarter adjusted net income.
INSW reported a combined dividend payment of $5.74 per share in the last twelve months, equating to a dividend yield exceeding 13%.
Following discussions with INSW’s management, analyst Benjamin Nolan from Stifel reiterated a buy rating with a target price increase to $68, citing a robust tanker market driven by rising global oil demand, limited new ship supply, and extended voyage lengths due to geopolitical challenges.
Nolan expects INSW to sustain high supplementary dividends, backed by expected excess cash flow of $200-300 million post capital expenditures. The analyst estimates a 2024 dividend of $5.51 per share but sees potential for higher payouts.
Nolan is ranked No. 68 out of over 8,900 analysts tracked by TipRanks, boasting a success rate of 67% and an average return of 19.5%. (See International Seaways’ Stock Charts on TipRanks)
Citigroup
Lastly, the third dividend stock recommended this week is the banking titan Citigroup (C), offering a 3.3% yield with a quarterly dividend of 53 cents per share.
During the Services Investor Day on June 18, Citigroup management expressed optimism about reaching the 2024 guidance, driven by revenue growth in core businesses despite economic uncertainties and potential interest rate declines.
Following the event, Goldman Sachs analyst Richard Ramsden reiterated a buy rating on Citigroup, raising the price target to $72 from $71, reflecting improved EPS estimates for 2024-2026 based on the bank’s progress in strategic transformations.
Ramsden praised Citi’s focused approach towards risk management, data quality improvement, and strategic developments in the Services segment, expecting significant revenue growth contribution by 2026.
The analyst’s confidence in Citi stems from its extensive global network, strong client relationships, and investments in technology driving market share expansion.
Ramsden is ranked No. 969 out of over 8,900 analysts tracked by TipRanks, with a success rate of 65% and an average return of 11.9%. (See Citigroup Technical Analysis on TipRanks)
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