Investing in stocks that pay dividends can help shield investor holdings against market turbulence while potentially boosting overall gains.
However, identifying the most promising dividend-yielding stocks can be challenging. The foremost analysts on Wall Street have a keen understanding of which companies are likely to deliver sustainable dividend income and appreciation over the long haul.
Highlighted below are three compelling dividend stock options recommended by esteemed analysts on TipRanks, a service that rates analysts based on their historical accuracy and performance.
Kimberly-Clark
The renowned consumer product corporation Kimberly-Clark (KMB), known for trusted brands such as Huggies and Kleenex, earns its spot as the first top dividend contender of the week. This dividend aristocrat has notably increased its dividends for over 50 consecutive years.
In the first quarter of 2024, Kimberly-Clark gave back $452 million to its shareholders through dividend payments and stock buyback programs. The company’s quarterly dividend stands at $1.22 per share, which translates to $4.88 annualized, equating to a yield of 3.5%.
Following Kimberly-Clark’s Analyst Day event in March, RBC Capital’s Nik Modi raised his recommendation for KMB’s stock to a buy from hold and lifted the target price to $165, up from $126. Modi’s optimism is due to the company’s directional shift from a cost-centric focus to a growth-driven approach.
He believes that Kimberly-Clark is poised for more consistent, accelerated growth and is confident that it will meet its long-term financial objectives, such as a 40% gross margin and a revenue annual growth rate over 3% in local currencies by 2030.
Modi credits CEO Mike Hsu for KMB’s strategic revamp and organizational restructuring into three divisions, which has led to reduced product costs and quicker market launches.
With a ranking of 593 out of over 8,800 analysts on TipRanks, Modi’s stock picks have been profitable 61% of the time, with a 6.8% average return. (View Kimberly-Clark’s Stock Repurchase Data on TipRanks)
Chord Energy
Second on our list is the Williston Basin’s prominent oil and gas explorer Chord Energy (CHRD). The company has been generous with a $1.25 per share standard dividend and a $1.69 per share special payout in June.
The acquisition of Enerplus by Chord Energy is recently complete, which is expected to solidify the company’s leadership within the Williston Basin thanks to the acquisition’s expanded footprint, cost-effective inventory, and robust shareholder returns.
Mizuho Securities’ William Janela continued to endorse CHRD stock with a buy recommendation and a $214 price target, emphasizing the successful integration and a 33% increase in annual cost-saving synergy estimates to over $200 million.
Janela believes that the merger will likely focus on operational efficiencies and cash returns, projecting a 9% yield in payouts and an improving financial position.
“The stock’s relative value looks appealing as it is trading at a reduced multiple compared to its peers when considering Free Cash Flow to Enterprise Value,” Janela asserts.
Janela, ranked 333rd out of more than 8,800 analysts on TipRanks, has a 57% rate of successful recommendations, yielding an average of 29.9% in returns. (Examine Chord Energy’s Stock Performance on TipRanks)
Cisco Systems
The final recommendation is the dividend-issuing tech leader Cisco System.(CSCO). In the third fiscal quarter of 2024, Cisco distributed $2.9 billion to its shareholders, which includes $1.6 billion in dividends and $1.3 billion in stock repurchases. With a 40 cents quarterly dividend per share, CSCO’s yield stands at 3.5%.
Jefferies analyst George Notter reaffirmed a buy rating and $56 price target for Cisco stock post the company’s investor and analyst day. Post-event, Notter has gained greater confidence in Cisco’s strategic trajectory, especially in light of its Splunk acquisition, which concluded in March 2024.
At the same event, Cisco reaffirmed its fourth-quarter fiscal 2024 projections and predicts a low to mid-single-digit revenue uptick for fiscal 2025. Notter points out that Cisco’s forecasted annual revenue rise of 4-6% for fiscal 2026-2027, with improved gross margins, positions the company well, considering its historical 1-3% revenue growth record.
Ranking 629th among TipRanks’ pool of over 8,800 analysts, Notter’s picks have borne fruit 62% of the time, with a return average of 10.1%.
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