The markets stumbled at the start of September, sparking investor caution due to the usual uncertainties this month brings. Amid this volatility, dividend-paying stocks stand out as a strategic choice, providing steady income and the chance for long-term growth. For long-term investors, choosing companies with strong financials and a solid dividend history can boost overall portfolio performance and help navigate short-term market shifts.
In this search, insights from top Wall Street analysts are key to finding promising dividend stocks. Based on expert analysis from the TipRanks platform, three stocks emerge for their attractive dividends and potential for future growth.
MPLX LP, a midstream energy company, has gained attention with its sizable quarterly payout of 85 cents per unit, leading to an annual yield of nearly 8%. This appealing dividend has drawn praise from analysts like RBC Capital’s Elvira Scotto. She recently reiterated a buy rating on MPLX with a $47 price target, highlighting the company’s strong second-quarter results, where its adjusted EBITDA surpassed expectations by 3%.
Scotto has updated her EBITDA forecasts for 2024 and 2025, reflecting MPLX’s strength, especially in the Logistics & Storage segment. The company’s growing free cash flow supports greater shareholder returns through dividends and stock buybacks. MPLX’s strategic move into natural gas and liquid assets through projects and acquisitions further strengthens its growth outlook.
Scotto, known for her analytical skill, has a 69% success rate and an average return of 20.8%, making her endorsement of MPLX a noteworthy pick for investors looking for stable income in the energy sector.
Chord Energy, another dividend-focused player in the energy sector, operates in the Williston Basin. Recently, it paid a base dividend of $1.25 per share along with a variable dividend of $1.27, showing a strong commitment to shareholder value. RBC Capital’s Scott Hanold maintained his buy rating on Chord, with a $200 price target, supported by higher production and lower operational costs. He also raised his EPS and cash flow estimates for the next two years by about 3%.
Hanold expects Chord’s free cash flow to grow in the second half of 2024, helped by the integration of assets from its recent acquisition of Enerplus. He predicts quarterly payouts between $4.50 and $5.00 per share, with dividends making up 60% and buybacks 40%. Hanold’s confidence in Chord’s ability to exceed integration targets suggests a bright future for the company.
With a 63% success rate and an average return of 25.4%, Hanold’s expertise indicates that Chord Energy is a solid option for investors seeking a blend of income and growth in the energy sector.
McDonald’s provides a reliable dividend yield of 2.3% and has an impressive track record of increasing dividends for 47 years. Ivan Feinseth from Tigress Financial reiterated a buy rating for McDonald’s, raising the price target to $360. He remains positive about McDonald’s due to its focus on technology, innovation, and value-driven strategies that strengthen its business model and long-term growth potential.
Feinseth notes McDonald’s competitive strengths, including its strong brand, customer loyalty program, and digital initiatives. With a current loyalty base of 166 million members and a goal of 250 million by 2027, the company’s customer engagement strategy is clearly working. McDonald’s is also investing heavily in expanding its stores and enhancing technology, such as AI-enabled ordering systems.
Feinseth expects McDonald’s to announce a dividend increase in October, continuing its tradition of rewarding shareholders. With a 60% success rate and an average return of 11.9%, his positive view of McDonald’s carries weight for investors.
MPLX LP, Chord Energy, and McDonald’s offer attractive opportunities for investors seeking steady income and potential growth. Their strong fundamentals, along with insights from top Wall Street analysts, make them valuable picks for a diversified, income-focused portfolio.
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