Investors seeking income-generating assets should consider dividend-paying stocks, especially with the expected interest rate cut by the Federal Reserve in September. These stocks are likely to outperform other assets like bonds due to their attractive dividend yields. However, with a vast array of companies offering dividends, it can be challenging to choose the right stocks. Seeking advice from top analysts can help investors select the most attractive dividend stocks with strong financials. Let’s delve into three such dividend stocks recommended by Wall Street’s top professionals on the TipRanks platform.
EPR Properties (EPR) is a real estate investment trust that focuses on experiential properties such as movie theaters, amusement parks, eat-and-play centers, and ski resorts. With a dividend yield of 7.3%, EPR is an attractive option for income-seeking investors. RBC Capital analyst Michael Carroll recently upgraded his rating for EPR to buy from hold, with a raised price target of $50. Carroll believes that EPR has weathered tough operating conditions, including the Covid-19 pandemic and actors/writers strikes. He anticipates a resurgence in the theatrical box office in 2H24 and 2025, leading to higher percentage rents and a strengthened tenant base. Despite concerns about EPR’s significant exposure to theaters, management is working to reduce this exposure over time. Carroll also highlighted that EPR’s high dividend yield is well-protected by its 70% adjusted funds from operations payout ratio and a solid balance sheet with a 5.2-times net debt to earnings before interest, taxes, depreciation, and amortization ratio.
Energy Transfer (ET) is a limited partnership operating in the midstream energy sector. The company recently announced a quarterly cash distribution of 32 cents per unit, reflecting a 3.2% year-over-year growth. With a dividend yield of 8%, ET presents a compelling opportunity for dividend investors. Stifel analyst Selman Akyol praised ET’s Q2 results, citing better-than-anticipated EBITDA and significant growth opportunities in the Permian to Gulf Coast value chain. Akyol expressed optimism about the natural gas sector, which is expected to meet the energy demands of artificial intelligence data centers. He noted that ET’s strong footprint positions the company to supply natural gas to power data centers continually. ET is also benefiting from increased demand from utilities, particularly in Texas and Florida, where the rise in population and potential data center growth offer attractive prospects. Akyol reaffirmed a buy rating on ET stock with a price target of $19.
Retail giant Walmart (WMT) has impressed investors with its strong performance in the second quarter of fiscal 2025. The company raised its full-year outlook following robust results in the first half of the year. Walmart remains committed to rewarding shareholders through dividends and share repurchases. In the first half of fiscal 2025, Walmart disbursed over $3 billion in dividends and repurchased shares worth $2.1 billion. The company also increased its dividend by 9% to 83 cents per share earlier this year, marking the 51st consecutive year of dividend hikes. Baird analyst Peter Benedict reiterated a buy rating on Walmart and raised the price target to $82. Benedict attributed Walmart’s market share gains to its focus on value and convenience, despite a challenging macroeconomic environment. He highlighted the company’s digital growth and earnings from higher-margin advertising and membership income streams. Walmart’s trailing 12-month return on investment increased by 10 basis points to 15.1%, driven by investments in automation and generative AI.
Dividend-paying stocks offer attractive opportunities for investors seeking strong returns, especially in the current low-interest-rate environment. By considering recommendations from top analysts and focusing on companies with solid financials, investors can build a robust dividend stock portfolio that delivers consistent income and capital appreciation over time. EPR Properties, Energy Transfer, and Walmart are compelling dividend stocks that have garnered positive reviews from Wall Street’s top professionals, making them worth considering for income-focused investors.