Dividend-paying stocks can enhance investors’ portfolio returns and provide certainty in shaky markets.
Investors can track Wall Street analysts’ ratings to select stocks of dividend-paying companies that have attractive growth prospects, which could boost earnings and cash flows to support higher dividends.
Here are three attractive dividend stocks, according to Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.
Northern Oil and Gas
This week’s first dividend stock is Northern Oil and Gas (NOG). The company engages in the acquisition, exploration and production of oil and natural gas properties, mainly in the Williston, Permian and Appalachian basins.
NOG paid a dividend of 40 cents per share for the first quarter, reflecting an 18% year-over-year increase. The stock offers a dividend yield of 4.1%. The company also enhanced shareholder returns through stock buybacks worth $20 million in Q1 2024.
NOG recently announced an agreement to acquire a 20% undivided stake in the Uinta Basin assets of XCL Resources for $510 million. The deal will be made in partnership with SM Energy.
Reacting to the news, RBC Capital analyst Scott Hanold reiterated a buy rating on NOG stock with a price target of $46. Following discussions with management, the analyst noted that similar to NOG’s strategy in the Permian and Williston Basins, there is a possibility of further expansion in the Uinta Basin through additional deals.
Hanold said the deal was in line with NOG’s strategy of collaborating with high-quality operators like SM Energy to capture lucrative opportunities. “This is NOG’s fourth large JV [joint venture] and meaningfully adds to its diversity, returns, and inventory runway,” he said.
The analyst boosted his 2025 earnings per share and cash flow per share estimates by 11% to 12% and increased his free cash flow per share forecast by 10%, given that the XCL deal is significantly accretive. He thinks that the solid free cash flow outlook could enable NOG to hike its base dividend. Hanold estimates a 10% to 15% increase in dividend in 2025.
Hanold ranks No. 23 among more than 8,900 analysts tracked by TipRanks. His ratings have been profitable 67% of the time, delivering an average return of 26.7%. (See NOG Stock Buybacks on TipRanks)
JPMorgan Chase
JPMorgan Chase (JPM), the largest U.S. bank by assets, is the next dividend pick. Last month, the bank announced its plans to increase its dividend by about 9% to $1.25 per share for the third quarter of 2024. JPM offers a dividend yield of 2.2%.
JPM highlighted that this potential increase in the Q3 dividend would mark the second dividend hike this year. In March 2024, the bank announced an increase in its dividend to $1.15 per share from $1.05. Moreover, JPM’s board has authorized a new share repurchase program of $30 billion, effective July 1, to boost shareholder returns.
Recently, RBC Capital analyst Gerard Cassidy reaffirmed a buy rating on JPM stock with a price target of $211. The analyst cited several reasons for his bullish investment thesis, including a strong management team, JPM’s impressive business lines that rank among the top three in the banking space and a robust balance sheet.
“We believe that as the company builds economies of scale in its consumer and capital markets businesses, it will realize enhanced profitability by taking market share from its weaker competitors,” said Cassidy.
The analyst also highlighted JPM’s well-diversified business model that derives revenue from Consumer and Community banking (41% of Q1 2024 revenue), Corporate and Investment Banking (32%), Asset and Wealth Management (12%), Commercial Banking (9%) and Corporate (5%).
Cassidy ranks No. 128 among more than 8,900 analysts tracked by TipRanks. His ratings have been successful 63% of the time, delivering an average return of 14.7%. (See JPM Stock Charts on TipRanks)
Walmart
Finally, we will look at big-box retailer Walmart (WMT). Earlier this year, the company increased its dividend by 9% to 83 cents per share. This increase represented Walmart’s 51st consecutive annual hike.
In the fiscal first quarter, WMT returned $2.73 billion to shareholders through $1.67 billion in dividends and $1.06 billion in share repurchases. With a payout ratio of 37.5%, the company sees the possibility of further growth in its dividend.
Recently, Jefferies analyst Corey Tarlowe reiterated a buy rating on WMT with a price target of $77, saying that the stock remains his firm’s top pick. The analyst thinks that Walmart is in the early phase of its artificial intelligence and automation journey.
Tarlowe thinks that AI and automation could help double the company’s operating income by fiscal year 2029 compared to fiscal year 2023, delivering more than $20 billion of incremental earnings before interest and taxes. The analyst expects the increased operating income to be driven by several factors, including automation efficiencies, advertising, theft mitigation and autonomous driving.
Among the recent AI developments, the analyst highlighted WMT’s strategic investment and partnership with Fox Robotics, which provides the world’s first autonomous forklift. He also mentioned the deployment of automatic receipt verification arches at Sam’s Club as part of the company’s AI strategy.
“Overall, we expect WMT to command an increasingly large share of customer spending through bolstered omnichannel capabilities, partnerships, and services,” said Tarlowe.
Tarlowe ranks No. 266 among more than 8,900 analysts tracked by TipRanks. His ratings have been successful 67% of the time, delivering an average return of 19.7%. (See WMT Technical Analysis on TipRanks)
