The U.S. stock market has been under pressure recently due to fears of an economic slowdown, but dividend-paying names can help smooth the ride for investors.
Investors can consider the recommendations of top Wall Street analysts as they search for stocks that are backed by strong financials and the ability to pay dividends consistently.
Here are three attractive dividend stocks, according to Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.
Pfizer
Health-care giant Pfizer (PFE) is this week’s first dividend stock. The company announced better-than-expected second-quarter results, driven by its cost-cutting initiatives and solid sales of non-Covid products. Pfizer raised its full-year guidance, reflecting strong demand for its non-Covid business, which is gaining from several acquired drugs and recently launched products.
In the first six months of 2024, Pfizer returned $4.8 billion to shareholders through dividends. The stock has a dividend yield of 5.9%.
In reaction to the upbeat Q2 results, Goldman Sachs analyst Chris Shibutani reiterated a buy rating on PFE stock and increased the price target to $34 from $31. The analyst said that while he anticipated that Pfizer will raise its outlook, the magnitude of the increase surpassed his expectations.
The analyst increased his revenue estimates to reflect the strength in PFE’s heart disease drug, Vyndaqel, and cancer treatment Padcev. He also raised his EPS estimates, thanks to improved top-line expectations and enhanced gross margin.
Shibutani said that while management didn’t provide any significant updates related to the company’s obesity programs, he does see the “scope for further beat and raise quarters during the balance of the year.” He also noted that the company’s capital allocation priorities, mainly dividends and debt reduction, remain intact.
Shibutani ranks No. 462 among more than 8,900 analysts tracked by TipRanks. His ratings have been profitable 46% of the time, delivering an average return of 13%. (See Pfizer Stock Charts on TipRanks)
Civitas Resources
We move to oil and natural gas producer Civitas Resources (CIVI). On Aug. 1, the company announced its second-quarter results and declared a quarterly dividend of $1.52 per share, payable on Sept. 26.
The amount included a base dividend of 50 cents per share and a variable dividend of $1.02 per share.
CIVI’s shareholder return policy involves the payment of at least 50% of its free cash flow (after the payment of its base dividend) as a variable component. Interestingly, the company has now revised its shareholder-return program to enhance the flexibility in the way it rewards shareholders with variable returns. Effective Q3 2024, CIVI’s variable component will include a combination of buybacks and dividends, with management and the board deciding the allocation. CIVI also announced a new share buyback plan of up to $500 million.
Read More: Top Wall Street analysts are bullish on these dividend stocks