Top Wall Street analysts pick these 3 dividend stocks for the long haul

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Top Wall Street analysts pick these 3 dividend stocks for the long haul

A strong fourth-quarter earnings season is underway and it's time for dividend-paying companies to shine.

Resilient dividend-paying companies can offer long-term growth potential and stable earnings. Investors should consider the insights of Wall Street's top pros when looking for dividend stocks with solid fundamentals.

Here are three attractive dividend stocks, according to Wall Street's top experts on TipRanks, a platform that ranks analysts based on past performance.

Verizon Communications

First up is the telecommunications giant Verizon Communications (VZ), which recently reported its fourth-quarter results and impressed investors with the strong increase in postpaid mobile phone subscriber additions.

In 2023, the company increased its dividend for the 17th consecutive year. Verizon's quarterly dividend of $0.665 per share (annualized dividend of $2.66) represents a yield of 6.7%.

Following Verizon's Q4 results, Tigress Financial analyst Ivan Feinseth reiterated his Buy rating on the stock and increased his price target to $50 per share from $45. The analyst noted that the company delivered strong subscriber and cash flow growth in 2023 and is expected to further accelerate this year.

“Continued momentum in 5G and fixed wireless broadband, as well as expanded service offerings combined with operational efficiencies and margin improvement, will result in a renewed acceleration of cash flow growth and improving business performance trends,” Feinseth said.

The analyst believes Verizon's strong balance sheet and cash flow support the company's ongoing investments in spectrum expansion and other growth initiatives, as well as dividend increases. Overall, he believes the company offers a compelling investment opportunity given its high dividend yield and industry-leading position, which allows it to benefit from long-term telecom trends

Feinseth ranks 214th among more than 8,700 analysts tracked by TipRanks. Its ratings were profitable 61% of the time and delivered an average return of 11.7% each time. (See Verizon Hedge Fund activity on TipRanks)

Enterprise Products Partner

This week's second dividend pick is Enterprise Products Partner (EPD), a master limited partnership providing midstream energy services. Last month, the company announced a quarterly cash distribution of $0.515 per unit for the fourth quarter of 2023, to be paid on February 14. This quarterly distribution represents a 5.1% increase year-over-year and reflects a yield of nearly 8%. .

In response to EPD's fourth-quarter results, Stifel analyst Selman Akyol reiterated a Buy rating on the stock and increased the price target to $36 per share from $35. The analyst said fourth-quarter 2023 results slightly exceeded his expectations. It increased its estimated earnings before interest, taxes, depreciation and amortization by more than 2% in 2024, largely due to the company's natural gas-liquids pipeline segment.

Furthermore, Akyol expects the momentum in EPD's pipeline and export throughput to continue in the near future. The analyst also noted that EPD has been increasing its distributions for 25 years. He expects distributions to be the primary means of returning capital to shareholders, with buybacks expected to be opportunistic.

Explaining his investment stance, Akyol said: “We believe Enterprise has one of the strongest financial profiles in the midstream sector and can withstand the turbulence of a volatile macro environment.”

Akyol is ranked 695th among more than 8,700 analysts tracked by TipRanks. Its ratings were profitable 64% of the time and delivered an average return of 5% each. (See EPD insider trading activity on TipRanks)

MPLX LP

Our third dividend pick is another midstream energy player. MPLX LP (MPLX). Last month, the master limited partnership announced a quarterly distribution of 85 cents per common unit for the fourth quarter of 2023, payable on February 14. MPLX offers a dividend yield of 9%.

Based on the recently announced fourth quarter results, RBC Capital analyst Elvira Scotto reiterated her Buy rating on MPLX stock and increased the price target to $46 per share from $45. The analyst noted that the company's adjusted EBITDA in the fourth quarter of 2023 exceeded consensus expectations by 4%, driven by increased product volumes, higher pipeline rates in the logistics and warehousing segment, and higher processing volumes in the collection and processing unit.

Given the high yield the stock offers, Scotto believes MPLX remains one of the most attractive income companies in the large-cap MLP space. The analyst expects cash distributions of $3.57 per unit in 2024 and $3.84 per unit in 2025. That's up from $3.40 in 2023

Scotto believes that “future cash flow generation, coupled with the financial flexibility provided by lower leverage and adequate distribution coverage, can result in additional returns of capital for investors over time.” A Â Â

Scotto is ranked #83 among more than 8,700 analysts tracked by TipRanks. Their ratings were profitable 64% of the time and delivered an average return of 17.8% each. (See MPLX technical analysis on TipRanks)