Top Dividend Stocks Recommended for High Returns
The month of September started off with a bit of turbulence for investors, with market volatility shaking things up in the first week. However, for those seeking stability and consistent returns, dividend-paying stocks can offer a smooth ride amidst the market ups and downs. These stocks not only provide regular income through dividends but also have the potential for share price appreciation over the long term.
When it comes to selecting the best dividend stocks for high returns, the recommendations of top Wall Street analysts can be a valuable resource. These experts analyze companies based on their financial strength, growth prospects, and ability to pay consistent dividends. Here are three dividend stocks highlighted by Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.
MPLX LP
Leading the list is MPLX LP, a midstream energy player that offers an attractive yield of nearly 8%. The company’s quarterly cash distribution for the second quarter of 2024 was 85 cents per common unit, equivalent to $3.40 on an annualized basis. RBC Capital analyst Elvira Scotto recently reiterated a buy rating on MPLX stock with a price target of $47. Scotto’s updated model reflects the company’s strong second-quarter results, with adjusted earnings before interest, taxes, depreciation, and amortization surpassing expectations.
Scotto raised her adjusted EBITDA estimates for 2024 and 2025 to account for the company’s solid performance in the Logistics & Storage segment in Q2. She also highlighted MPLX’s expansion efforts in natural gas and natural gas liquids assets through organic projects, joint venture interests, and acquisitions. Scotto views MPLX as one of the most attractive income plays among large-cap MLPs, thanks to its robust yield and rising free cash flow generation.
Chord Energy
Another dividend-paying energy stock recommended by Wall Street analysts is Chord Energy, an independent oil and gas company operating in the Williston Basin. The company recently paid a base dividend of $1.25 per share of common stock and a variable dividend of $1.27 per share. RBC Capital analyst Scott Hanold reaffirmed a buy rating on CHRD stock with a price target of $200, citing higher production and lower cash operating costs in his updated earnings and cash flow estimates for 2024 and 2025.
Hanold expects Chord Energy to generate significant free cash flow in the coming years, with quarterly distributions ranging from $4.50 to $5.00 per share in the second half of 2024. He anticipates that the company’s recent acquisition of Enerplus will further enhance its operational efficiency and profitability. Hanold’s positive outlook on Chord Energy is supported by the company’s strong growth potential and commitment to delivering value to shareholders through dividends and buybacks.
McDonald’s
The third pick for top dividend stocks is fast-food chain McDonald’s, a dividend aristocrat that has increased its dividends for 47 consecutive years. With a dividend yield of 2.3%, McDonald’s is a reliable choice for income-seeking investors. Tigress Financial analyst Ivan Feinseth reiterated a buy rating on MCD stock and raised his price target to $360, citing the company’s ongoing technology initiatives, innovation, and value focus as key drivers of its long-term growth potential.
Feinseth highlighted McDonald’s efforts to enhance its value offerings, improve its digital capabilities, and expand its store footprint through capital investments. The company’s loyalty program and digital initiatives have helped it maintain a competitive edge in the fast-food industry. Feinseth expects McDonald’s to announce a dividend hike in the upcoming months, reflecting its commitment to rewarding shareholders through dividends and share repurchases.
In conclusion, dividend-paying stocks like MPLX LP, Chord Energy, and McDonald’s offer investors the opportunity to earn regular income while benefiting from potential share price appreciation. By following the recommendations of top Wall Street analysts, investors can make informed decisions about which dividend stocks to include in their portfolios for high returns in the long run.
