Investors looking for regular income can enhance their portfolio by adding attractive dividend stocks.
Given the large universe of companies that pay dividends, it can be difficult for investors to conduct in-depth analysis and select the right stocks. To this end, insights from top analysts can help inform investor decisions.
Here are three attractive dividend stocks, according to Wall Street's top experts on TipRanks, a platform that ranks analysts based on past performance.
Energy transfer
This week's first dividend stock is Energy transfer (AND), a master limited partnership or MLP. The midstream energy company operates more than 125,000 miles of pipeline and related energy infrastructure.
Earlier this year, Energy Transfer announced a quarterly cash distribution of $0.3150 per common unit for the fourth quarter of 2023, an increase of 3.3% year over year. With an annual distribution per unit of $1.26, ET stock offers an attractive yield of 8.4%.
Following the company's fourth-quarter results, Stifel analyst Selman Akyol reiterated his Buy rating on ET stock with a price target of $18 per share. The analyst noted that earnings before interest, taxes, depreciation and amortization in the fourth quarter of 2023 beat Wall Street estimates, with the company forecasting adjusted EBITDA between $14.5 billion and $14.8 billion in 2024.
Akyol stressed that ET was operating at the lower end of its debt range, with management noting that the company could further reduce its debt to retain some “dry powder” (or cash reserves), which would allow it to pursue further mergers and acquisitions Offers. With respect to the Crestwood acquisition, management expects annual synergies of $80 million through 2026, with $65 million expected in 2024
Management also intends to consider expanding distribution and conducting opportunistic repurchases. “We believe ET will generate well over $1 billion in FCF [free cash flow] after distribution in 2024, which could be targeted at incremental growth projects or potential unit buybacks,” Akyol said.
Akyol is ranked #396 among more than 8,700 analysts tracked by TipRanks. Its ratings were successful 67% of the time, with an average return of 6.9% each. (See Energy Transfer Stock Charts on TipRanks)
Garmin
We switch to the manufacturer of navigation devices Garmin (GRMN). The company impressed investors with better-than-expected fourth-quarter earnings and solid guidance, thanks to the strength of its auto and fitness businesses.
Garmin announced a quarterly dividend of 73 cents per share, payable on March 29. The company will also propose a 2.7% dividend increase to 75 cents per share at its upcoming annual general meeting in June. The company also announced a new share repurchase program of up to $300 million through December 2026. GRMN stock offers a dividend yield of 2.1%.
Ivan Feinseth, an analyst at Tigress Financial, recently reiterated his Buy rating on GRMN stock and increased the price target from $165 to $175. The analyst noted that the company's fourth-quarter 2023 and full-year revenue increased due to solid demand for its advanced smart wearables, several new launches and momentum in its automotive original equipment manufacturer (OEM) business.
Feinseth emphasized that the company's strong balance sheet and cash flow allow it to invest in new product development, make strategic acquisitions and increase returns to shareholders. The analyst added that the company is increasing its investments in automotive product development, focusing on OEM partnerships with leading automakers and launching new specialty products for the automotive industry.
“Thanks to diversified product lines and industry-leading products, GRMN is positioned to capitalize on new opportunities in all key markets, including aviation, automotive, fitness, marine and outdoor activities,” he said.
Feinseth is ranked #233 among more than 8,700 analysts tracked by TipRanks. Its ratings were successful 61% of the time, with an average return of 12.1% each. (See Garmin insider trading activity on TipRanks)
Goal
This week's third dividend pick is Goal (TGT), which delivered better-than-expected sales and profits in the fourth quarter, even as macroeconomic pressures continue to weigh on the retailer's business.A Against the backdrop of a difficult macroeconomic environment, the company is focused on improving its profitability through better inventory management and greater efficiency of its operations.
Target's quarterly dividend of $1.10 per share represents a 1.9% year-over-year increase and represents a dividend yield of 2.6%. Target has increased its dividends for 52 consecutive years
Jefferies analyst Corey Tarlowe was impressed with the fourth-quarter results and reiterated his Buy rating on TGT stock and increased the price target to $195 from $170. Tarlowe noted that the retailer's fourth-quarter revenue benefited from a 10% increase in other revenue, thanks to solid advertising growth. The analyst expects further gains as Target expands its advertising business.
The analyst said that while Target slightly beat fourth-quarter revenue expectations, investors were more impressed by the company's nearly 100 basis point increase in operating margin. The analyst is encouraged by the improvements Target has demonstrated in inventory management, shrink reduction, and store and supply chain efficiencies. Â Â
Tarlowe remains optimistic about Target's long-term prospects, concluding: “TGT has clean inventory and continues to experience temporary margin headwinds, which could lead to margin recovery opportunities.”
Tarlowe is ranked 399th among more than 8,700 analysts tracked by TipRanks. His ratings were successful 67% of the time, yielding an average return of 17% each. (See Target Ownership Structure on TipRanks)