September got off to a rocky start for investors as a first week of volatility roiled the market, but dividend stocks can help smooth the process.
Investors with a long-term investment horizon can ignore short-term noise and focus on stocks that have the potential to increase total portfolio returns through dividends and share price appreciation.
To this end, recommendations from top Wall Street analysts can help investors choose stocks with strong fundamentals that can continue to pay dividends.
these are three dividend stockshighlighted as Wall Street's Top Professionals TipRanks is a platform that ranks analysts based on their past performance.
DoplexLP
Let's start this week Doplex (Doplex), a midstream energy player. The company’s quarterly cash distribution is as follows: 85 cents per common unit ($3.40 on an annualized basis) Q2 2024.
Recently, analysts at Royal Bank of Canada Capital Elvira Scotto Reiterate a Buy rating on MPLX stock with a $47 price target. The analyst updated her model to reflect the company's solid second-quarter results, with adjusted earnings before interest, tax, depreciation and amortization 3% above Wall Street expectations.
Scotto raised its 2024 and 2025 adjusted EBITDA guidance to reflect strong performance in the logistics and warehousing segment in the second quarter and some consolidation of joint venture interests. The analyst maintained forecasts for distributions per unit of $3.57 in 2024 and $3.84 in 2025.
Scotto continues to view MPLX as “one of the most attractive income companies among large-cap MLPs (master limited partnerships),” thanks to its strong yield and growing free cash flow generation. Analysts believe that MPLX's stable free cash flow will help the company continue to develop its business and increase shareholder returns through buybacks.
The analyst also highlighted that MPLX is growing its natural gas and natural gas liquids assets across its integrated network through organic projects, joint venture interests and bolt-on acquisitions.
Scotto ranks No. 18 among more than 9,000 analysts tracked by TipRanks. Her ratings were profitable 69% of the time, with an average return of 20.8%. (look MPLX Options Trading on prompt ranking)
chord energy
We turn to another dividend-paying energy stock, chord energy (CHRD). It is an independent oil and natural gas company operating in the Williston Basin. company recent payment The basic dividend per common share is $1.25 and the variable dividend is $1.27 per share.
September 4, RBC Capital analyst Scott Hannold Reiterate a Buy rating on CHRD stock with a $200 price target. The analyst raised his earnings per share and cash flow per share forecasts by nearly 3% for 2024 and 2025 to reflect modest growth in production and lower cash operating costs.
Hanold expects free cash flow to be $1.2 billion and $1.4 billion in 2024 and 2025, respectively. Analysts expect FCF to increase in the second half of 2024 due to the combined assets of the company's acquisitions of Chord Energy and Enerplus earlier this year.
Commenting on the Enerplus integration, the analyst said: “We remain optimistic that with the business fully integrated, the company will be able to not only meet and potentially exceed synergy targets.”
Additionally, analysts expect quarterly distributions in the second half of 2024 to be $4.50 to $5.00 per share, with dividends accounting for approximately 60% of the distribution and buybacks accounting for approximately 40%.
Hanold ranks No. 27 among more than 9,000 analysts tracked by TipRanks. His rating success rate is 63%, with an average return of 25.4%. (look Chord Energy Stock Buyback on prompt ranking)
McDonald's
This week’s third choice is a fast food chain McDonald's (MCD). MCD stock has a dividend yield of 2.3%. McDonald's is a Dividend Aristocrat, having raised its dividend for 47 consecutive years.
On September 3, Tigress Financial analyst Ivan Fainsese Reaffirmed a Buy rating on MCD stock and raised the price target to $360 from $355. Despite the challenging backdrop, analysts remain bullish on McDonald's due to its continued technology initiatives, innovation and value focus. These factors support its resilient business model and long-term growth potential.
Feinseth noted that the company is focused on enhancing its value offerings to regain competitive advantage. The analyst highlighted several of McDonald's recent great deals, including $5 meal deals, that have helped improve its image as a fast-food chain that offers value and affordability.
Additionally, Feinseth pointed to MCD's competitive advantages, which are supported by its solid brand equity, loyalty program and digital initiatives. The company has a loyal membership base of 166 million members. The company aims to have 250 million active loyalty members by 2027.
The analyst also noted that McDonald's is making capital investments of $2 billion to $2.5 billion annually to expand its stores and improve its technology, including enhancing its ordering capabilities through automated voice artificial intelligence. Overall, Feinseth is confident in MCD's long-term growth potential and its ability to enhance shareholder returns through dividends and share buybacks. In fact, he expects MCD to announce a dividend hike in October, similar to a 10% increase announced last year.
Feinseth is ranked No. 210 among more than 9,000 analysts tracked by TipRanks. His ratings were profitable 60% of the time, with an average return of 11.9%. (look McDonald's insider trading activities on prompt ranking)
