As investors face uncertain markets in the short term, dividend stocks could provide some portfolio stability and income.
Analysts have delved into the details of dividend stocks, analyzing the companies' fundamentals and understanding their long-term growth potential.
With that in mind, here are three attractive dividend stocks, according to Wall Street's top experts on TipRanks, a platform that rates analysts based on past performance.
State resources
First, there are independent oil and natural gas producers State resources (CITIZENS). The Company is focused on developing assets in the Permian and Denver-Julesburg Basin.
Civitas paid a quarterly dividend of $1.59 per share on December 29, 2023. This payment included a base dividend of $0.50 per share and a variable dividend of $1.09 per share.
Earlier this month, Mizuho analyst Nitin Kumar upgraded Civitas shares to “buy” from “hold” and set a price target of $86 per share. The analyst called the stock one of his top picks in the U.S. oil and gas sector. The analyst believes 2023 was a year of change for the company as three major acquisitions in the Permian Basin reshaped its asset base.
Kumar added that these recent acquisitions extended the life of the company's overall portfolio to nearly 10 years, making it more competitive than its small and medium-sized peers in exploration and production. He also highlighted that CIVI offers the highest cash returns compared to its peers.
Despite these positives, the stock still trades at a significant discount to its peers on a FCF/EV and EV/EBITDAX (earnings before interest, taxes, depreciation or depletion, amortization and exploration expenses) basis.
“We believe this relative valuation gap is too wide given the significantly improved asset base and longer inventory life,” Kumar said.
Kumar is ranked #224 among more than 8,600 analysts tracked by TipRanks. Its ratings were profitable 60% of the time and delivered an average return of 15.5% each. (See Civita's insider trading activity on TipRanks)
Williams Company
We move to another energy dividend stock – Williams Company (WMB). The energy infrastructure company handles about a third of the natural gas transported in the United States
On December 26, 2023, the Company paid a quarterly dividend of $0.4475 per share. This dividend represented a 5.3% increase over the previous year. WMB offers a dividend yield of 5.1%.
Williams recently acquired a portfolio of natural gas storage assets for $1.95 billion from its Hartree Partners LP affiliate. Stifel analyst Selman Akyol expects this acquisition, which includes six natural gas assets, to be beneficial as the acquired assets have access to LNG export facilities.
The analyst expects the deal will expand the company's storage capacity to meet growing LNG demand. Additionally, the analyst noted that this acquisition would put the company in a better position to provide fuel for replacement power plants as part of the transition to renewable energy.
Reiterating his Buy rating on WMB shares with a price target of $40, Akyol said: “With a diversified gathering footprint and the US's largest long-distance natural gas pipeline in Transco, Williams' 90%+ footprint should remain insulated from commodity price fluctuations. paid margins.”
The analyst also highlighted the company's best-in-class distribution coverage, investment-grade balance sheet, attractive yield and ability to generate stable cash flows despite macroeconomic challenges.
Akyol is ranked 976th on TipRanks among more than 8,600 analysts. Its ratings were successful 63% of the time and delivered an average return of 4.2%. (See Williams' financial reports on TipRanks.
Kimco Realty
Finally, let's take a look Kimco Realty (KIM), a real estate investment trust (REIT) focused on grocery shopping malls. In December 2023, the Company paid a quarterly cash dividend of $0.24 per share, an increase of 4.3% from the previous dividend payment. KIM's dividend yield is 4.7%.
Following Kimco Realty's recently completed acquisition of RPT Realty, Stifel analyst Simon Yarmak reiterated a Buy rating on KIM stock and slightly increased the price target from $21.75 per share to $23 per share. The analyst noted that management is optimistic about RPT portfolio utilization, margins and a solid signed-not-opened (SNO) portfolio.
The analyst added that management is positive about the financial health of the company's tenants and believes exposure to Rite Aid, which filed for bankruptcy in 2023, remains “very muted.”
Yarmak remains optimistic about Kimco Realty and believes the company's portfolio is stable and has significant size and reach in its target markets. He raised his FFO (funds from operations) per share estimate for 2024 from $1.61 to $1.62 and for 2025 from $1.68 to $1.69. The analyst expects 2023 FFO of $1.57 per share.
“KIM is focused on leveraging the value creation opportunities in its portfolio to increase NOI.” [net operating income] and cash flow growth,” said Yarmak, explaining his investment stance.
Yarmak is ranked #410 among more than 8,600 analysts tracked by TipRanks. Its ratings were profitable 58% of the time and delivered an average return of 9.7% each time. (See Kimco Realty technical analysis on TipRanks)