Top Wall Street analysts recommend these dividend stocks for stable returns

The stock market has been riding on enthusiasm as President Donald Trump takes the reins, but there are many questions about tax cuts and tariffs. Dividend-paying stocks can offer investors some cushioning if the market turns rocky.

Amid an uncertain macro backdrop, investors looking for steady returns can add some solid dividend stocks to their portfolios. To select the right dividend stocks, investors can consider insights from the main analysts of Wall Street, as they analyze the ability of a company to pay consistent dividends, supported by solid cash flows.

Here are three dividend paying stockshighlighted by Wall Street’s best pros as tracked by TipRanks, a platform that ranks analysts based on their past performance.

AT&T

The first dividend this week is the telecommunications company AT&T (T). Recently, the company announced a quarterly dividend of $0.2775 per share, paid on February 3rd. AT&T stock offers a dividend yield of nearly 5%.

Recently, Argus Research analyst Joseph Bonner upgraded AT&T shares to buy from hold, with a price target of $27. Bonner’s bullish stance follows AT&T’s analyst day event, where the company discussed its strategy and financial goals long term.

Bonner noted that management raised its adjusted EPS outlook for 2024 and revealed strong estimates for shareholder returns, earnings and cash flow growth as AT&T “finishes off from some acquisitions annoying and focuses on the convergence of wireless and fiber Internet services.

The analyst expects the company’s cost-saving efforts, network modernization and revenue acceleration to gradually reflect in its performance. He believes that management’s vision to capture opportunities arising from the convergence of wireless and fiber, together with the company’s strategic investments, provides a compelling outlook for future growth and shareholder returns.

Bonner noted that at the analyst day event, AT&T indicated that neither dividend increases nor M&A are under consideration as the company invests in 5G and fiber broadband networks and continues to reduce its debt That said, management is committed to protecting its dividend payouts after reducing them by almost half in March 2022. Bonner highlighted that AT&T plans to return $40 billion to shareholders in 2025-2027 via $20 billion in dividends and $20 billion in share buybacks.

Bonner is number 310 among more than 9,300 analysts tracked by TipRanks. Their assessments were profitable 67% of the time, providing an average return of 14.1%. To see Buy AT&T stock on TipRanks.

String energy

We move to String energy (CHRD), an independent oil and gas company operating in the Williston Basin. Under its capital return program, Chord Energy aims to return more than 75% of its free cash flow. The company recently paid a basic dividend of $1.25 per share and a variable dividend of 19 cents per share.

Ahead of Chord Energy’s Q4 2024 results, analyst Mizuho Guglielmo Janela reiterated a buy rating on the stock with a target price of $178, calling CHRD a Top Pick. The analyst said his Q4 2024 estimates for CFPS (cash flow per share) and EBITDX (earnings before interest, tax, depreciation and exploration costs) are essentially in line with Street estimates.

Janela added that compared to its peers, there is more visibility in Chord Energy’s outlook for this year, as it has already published its preliminary guidance. Additionally, expect the company to demonstrate enhanced capital efficiency on a year-over-year basis as it has fully integrated assets from the acquisition of Enerplus.

“A more defensive balance sheet (~0.2x net debt/EBITDX, one of the lowest among E&P peers) also leaves CHRD well positioned in a volatile oil price environment,” Janela said.

While CHRD stock has underperformed its peers in 2024, the analyst noted that the stock is now trading at a wider discount to peers on the basis of EV/EBITDX and FCF/EV, which he thinks which understates the company’s improved scale and high-grade inventory in the Bakken Basin. after the acquisition of Enerplus. Finally, based on its Q4 2024 free cash flow (FCF) estimate of $235 million, Janela expects approximately $176 million in cash returns, including $76 million in basic dividends. It is expected that most of the variable part FCF reflects the purchase of shares, as in the third quarter.

Janela is ranked number 656 out of over 9,300 analysts tracked by TipRanks. Their assessments were profitable 52% of the time, providing an average return of 19.2%. To see Chord Energy Insider Trading Activity on TipRanks.

Diamondback Energy

Another Mizuho analyst, Nitin Kumaris bullish on Diamondback Energy (MUD), an independent oil and natural gas company that is focused on reserves in the Permian Basin. The company paid a basic dividend of 90 cents per share for Q3 2024.

The company is expected to announce its results for the fourth quarter of 2024 at the end of February. Kumar expects FANG to report Q4 2024 EBITDA, free cash flow, and capital spending of $2.543 billion, $1.243 billion, and $996 million, versus the Wall Street consensus of $2.485 billion, $1.251 billion and $1.004 billion, respectively.

The analyst said that the fact that FANG maintained its preliminary outlook for 2025, which it published while announcing the acquisition of Endeavor Energy Resources in February 2024it reflects strong execution and modest cost savings.

Overall, Kumar reaffirmed a buy rating on FANG stock with a price target of $207. He highlighted that “FANG is a leader in cash repayment payments, with 50% of free cash now return to investors, including a high basic dividend yield.”

He added that the company’s high dividend yield reflects its superior control of costs and unit margins. Additionally, the analyst believes that with the completion of the Endeavor acquisition, the scale and quality of the combined asset base is impressive.

Kumar is number 119 among more than 9,300 analysts tracked by TipRanks. Their assessments were profitable 67% of the time, providing an average return of 14.1%. To see Diamondback’s ownership structure on TipRanks.