September had a bumpy start for investors as volatility jolted markets in the first week, but dividend-paying stocks can help smooth the ride.
Investors with a long-term investment horizon can ignore short-term noise to focus on stocks that have the potential to enhance their total portfolio returns through a mix of dividends and share price appreciation.
To that end, the recommendations of top Wall Street analysts can help investors choose stocks with strong fundamentals and the ability to pay consistent dividends.
Here are three dividend stocks, highlighted by Wall Street’s top pros on TipRanks, a platform that ranks analysts based on their past performance.
MPLX LP
We start this week with MPLX (MPLX), a midstream energy player. The company’s quarterly cash distribution was 85 cents per common unit ($3.40 on an annualized basis) for the second quarter of 2024. MPLX offers an attractive yield of nearly 8%.
Recently, RBC Capital analyst Elvira Scotto reiterated a buy rating on MPLX stock with a price target of $47. The analyst updated her model to reflect the company’s solid second-quarter results, with adjusted earnings before interest, taxes, depreciation and amortization surpassing the Street’s estimate by 3%.
Scotto raised her adjusted EBITDA estimates for 2024 and 2025 to reflect the strong performance of the Logistics & Storage segment in Q2 and some consolidation of joint venture interests. The analyst maintained her distribution per unit estimate of $3.57 for 2024 and $3.84 for 2025.
Scotto continues to view MPLX as “one of the most attractive income plays among large-cap MLP [master limited partnership],” thanks to its robust yield and rising free cash flow generation. The analyst thinks that MPLX’s solid free cash flow will help the company to continue to grow its business and enhance shareholder returns through buybacks.
The analyst also highlighted that MPLX is expanding its natural gas and natural gas liquids assets across its integrated network via organic projects, joint venture interests and bolt-on acquisitions.
Scotto ranks No. 18 among more than 9,000 analysts tracked by TipRanks. Her ratings have been profitable 69% of the time, delivering an average return of 20.8%. (See MPLX Options Trading on TipRanks)
Chord Energy
We move to another dividend-paying energy stock, Chord Energy (CHRD). It is an independent oil and gas company operating in the Williston Basin. The company recently paid a base dividend of $1.25 per share of common stock and a variable dividend of $1.27 per share.
On Sept. 4, RBC Capital analyst Scott Hanold reaffirmed a buy rating on CHRD stock with a price target of $200. The analyst increased his earnings per share and cash flow per share estimates for 2024 and 2025 by nearly 3% to reflect modestly higher production and lower cash operating costs.
Hanold expects free cash flow of $1.2 billion and $1.4 billion in 2024 and 2025, respectively. The…
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