Leading Wall Street analysts suggest these dividend stocks for consistent profits

The stock market has been riding on optimism as President Donald Trump assumes office, but many uncertainties remain regarding tax cuts and tariffs. Stocks that pay dividends can offer investors some stability if the market encounters volatility.

 

In an unpredictable macroeconomic environment, investors seeking steady returns might consider adding reliable dividend stocks to their portfolios. To choose the appropriate dividend stocks, investors can utilize insights from leading Wall Street analysts, who assess a company's capacity to consistently pay dividends supported by robust cash flows.

 

Here are three dividend-paying stocks, highlighted by top Wall Street professionals as tracked by TipRanks, a platform that ranks analysts based on their historical performance.

 

This week's first dividend stock is telecommunications firm AT&T (T). Recently, the company declared a quarterly dividend of $0.2775 per share, payable on Feb. 3. AT&T stock offers a dividend yield of nearly 5%.

 

Recently, Argus Research analyst Joseph Bonner upgraded AT&T stock to buy from hold, with a price target of $27. Bonner's optimistic stance follows AT&T's analyst day event, where the company outlined its strategy and long-term financial plans.

 

Bonner observed that management increased its 2024 adjusted EPS outlook and presented strong projections for shareholder returns, earnings, and cash flow growth, as AT&T "completes disentangling itself from challenging acquisitions and focuses on the convergence of wireless and fiber internet services."

 

The analyst anticipates that the company's cost-reduction efforts, network modernization, and revenue acceleration will gradually become evident in its performance. He believes that management's vision of capturing opportunities from the convergence of wireless and fiber, coupled with the company's strategic investments, offers a compelling outlook for future growth and shareholder returns.

 

Bonner noted that during the analyst day event, AT&T indicated that increases in dividends or mergers and acquisitions are not currently under consideration while the company invests in 5G and fiber broadband networks and works to reduce its debt. However, management remains dedicated to maintaining its dividend payments after reducing them by nearly half in March 2022. Bonner highlighted that AT&T aims to return $40 billion to shareholders in 2025-2027 through $20 billion in dividends and $20 billion in share buybacks.

 

Bonner ranks No. 310 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, yielding an average return of 14.1%. See AT&T Stock Buybacks on TipRanks.

 

Next up is Chord Energy (CHRD), an independent oil and gas company operating in the Williston Basin. Through its capital returns program, Chord Energy aims to return over 75% of its free cash flow. The company recently disbursed a base dividend of $1.25 per share and a variable dividend of 19 cents per share.

 

Ahead of Chord Energy's Q4 2024 results, Mizuho analyst William Janela reiterated a buy rating on the stock with a price target of $178, designating CHRD as a Top Pick. The analyst stated that his Q4 2024 estimates for CFPS (cash flow per share) and EBITDX (earnings before interest, tax, depreciation, and exploration costs) closely align with the Street's projections.

 

Janela added that relative to its peers, Chord Energy's outlook for this year is clearer, given its preliminary guidance. Furthermore, he expects the company to display enhanced capital efficiencies on a year-over-year basis, considering its complete integration of assets from the Enerplus acquisition.

 

"A more cautious balance sheet (~0.2x net debt/EBITDX, one of the lowest among E&P peers) also positions CHRD well in an unpredictable oil price environment," stated Janela.

 

Although CHRD stock underperformed compared to its peers in 2024, the analyst noted that shares are now trading at a greater discount to peers on an EV/EBITDX and FCF/EV basis, which he believes overlooks the company's improved scale and top-notch inventory in the Bakken basin following the Enerplus acquisition. Lastly, based on his Q4 2024 free cash flow (FCF) estimate of $235 million, Janela anticipates about $176 million in cash returns, including $76 million in base dividends. He expects most of the variable FCF portion to go toward share buybacks, similar to the third quarter.

 

Janela ranks No. 656 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 52% of the time, yielding an average return of 19.2%. See Chord Energy Insider Trading Activity on TipRanks.

 

Another Mizuho analyst, Nitin Kumar, is optimistic about Diamondback Energy (FANG), an independent oil and natural gas company focused on reserves in the Permian Basin. The company paid a base dividend of 90 cents per share for Q3 2024.

 

The company is set to release its Q4 2024 results in late February. Kumar anticipates FANG to report Q4 2024 EBITDA, free cash flow, and capital expenses of $2.543 billion, $1.243 billion, and $996 million, versus Wall Street's consensus of $2.485 billion, $1.251 billion, and $1.004 billion, respectively.

 

The analyst remarked that FANG's maintenance of its preliminary outlook for 2025, issued while announcing the Endeavor Energy Resources acquisition in February 2024, signals strong execution and modest cost savings.

 

Overall, Kumar reaffirmed a buy rating on FANG stock with a price target of $207. He emphasized that "FANG is a frontrunner in cash return payouts, with 50% of free cash now being distributed to investors, including a significant base dividend yield."

 

He highlighted that the company's high dividend yield demonstrates its excellent cost control and unit margins. Moreover, the analyst believes that with the completion of the Endeavor acquisition, the scale and quality of the combined asset base are noteworthy.

 

Kumar ranks No. 119 among more than 9,300 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, yielding an average return of 14.1%. See Diamondback Ownership Structure on TipRanks.