In times of market volatility, investors often seek out dividend-paying stocks as a way to generate income and provide stability to their portfolios. With so many options available, it can be challenging to identify the best choices. One strategy is to follow the recommendations of Wall Street analysts, who conduct in-depth analyses of companies’ earnings potential and dividend track records.
One such recommended stock is IBM, a tech giant that recently reported mixed first-quarter results. Despite revenue missing estimates, the company’s earnings exceeded expectations. IBM also made a significant acquisition of cloud software maker HashiCorp. With a dividend yield of around 4%, IBM paid out $1.5 billion in dividends in the first quarter and expects to generate about $12 billion in free cash flow for the full year. Analysts like Evercore’s Amit Daryanani have reiterated a buy rating on IBM stock, citing the company’s growth prospects in areas like generative artificial intelligence and consulting revenue.
Another Wall Street favorite is Hasbro, a toymaker that surpassed first-quarter earnings expectations due to its turnaround efforts. With a dividend yield of 4.7%, Hasbro paid out $97.2 million in dividends in Q1. Analysts like JPMorgan’s Christopher Horvers have upgraded Hasbro stock to a buy rating, pointing to the company’s cost efficiency efforts and digital gaming prospects as potential growth drivers for the future.
Lastly, big-box retailer Target is also on Wall Street’s radar, having paid out $508 million in dividends to shareholders in the first quarter of 2024. Despite slightly missing earnings per share expectations, analysts like Baird’s Peter Benedict are optimistic about Target’s prospects. Benedict believes that the company’s strategy of focusing on value and affordability through low pricing will help drive positive comparable sales growth in the coming quarters.
Overall, these three dividend stocks offer investors the opportunity to earn income while potentially benefiting from capital appreciation. By following the recommendations of top Wall Street analysts, investors can gain valuable insights into the growth potential of these companies and make informed investment decisions for the future.