Top Wall Street analysts recommend these stocks for consistent income

As stock markets continue to be volatile, investors looking for a stable income stream can bolster their portfolios with the addition of attractive dividend stocks. Selecting good dividend stocks from a vast universe of companies can be challenging.

In this regard, recommendations of top Wall Street analysts can help investors make the right choice, as these experts assign buy ratings after a thorough analysis of a company’s fundamentals and its ability to consistently pay dividends.

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

Ares Capital

This week’s first dividend pick is Ares Capital (ARCC), a business development company that offers comprehensive financing solutions to the middle-market. Recently, the company announced better-than-expected fourth-quarter earnings and declared a dividend of 48 cents per share for the first quarter, payable on March 31. ARCC stock offers a dividend yield of 9.64%.

Following the print, RBC Capital analyst Kenneth Lee reiterated a buy rating on Ares Capital and slightly lowered the price target to $22 from $23 as he adjusted his estimates. “We favor ARCC’s strong track record of managing risks through the cycle, and scale advantages,” said Lee.

The 5-star analyst highlighted that ARCC’s credit performance remains strong despite recent concerns about software lending due to potential artificial intelligence-related disruption. Lee contends that investors are not fully valuing the resiliency of Ares Capital’s software-lending business. The company is focused on lending to companies in foundational/infrastructure software, proprietary data, and regulated end markets.  

Lee finds ARCC’s credit performance encouraging, with non-accruals unchanged quarter-over-quarter at 1.8% of the portfolio. Furthermore, the company’s internal risk grade remained unchanged at 3.1 compared with the prior quarter, and investments in the bottom 2 risk grades remained low at about 4% of the portfolio. Lee noted that management sees minimal AI risk over the near term and manageable risk over the medium and long term.

Overall, Lee is bullish on Ares Capital, given that it is a market-leading BDC with its scale being a competitive advantage. He added that ARCC’s dividends are well supported by the company’s core earnings per share and potential net realized gains.

Lee ranks No. 689 among more than 12,100 analysts tracked by TipRanks. His ratings have been successful 62% of the time, delivering an average return of 8.7%. See Ares Capital Financials on TipRanks. 

ConocoPhillips

Oil and gas exploration and production company ConocoPhillips (COP) recently reported its fourth-quarter results and announced a dividend of 84 cents per share for the first quarter. The company distributed $9 billion, or 45% of its cash flow operations, to shareholders, including $5 billion through share repurchases and $4 billion in…