Investors looking for stability and long-term growth potential may want to consider dividend-paying stocks amid macroeconomic concerns and geopolitical tensions. Wall Street analysts provide valuable insights into dividend-paying companies, assessing their financials and ability to sustain and grow dividends over time. One such dividend stock recommended by top experts on TipRanks is Enterprise Products Partners (EPD), a midstream energy services provider.
EPD has a track record of increasing its cash distribution for 25 consecutive years, with a compound annual growth rate of 7%. The company recently announced a quarterly cash distribution of $0.515 per unit, reflecting a 5.1% year-over-year increase. With a dividend yield of 7.1%, EPD offers an attractive investment opportunity for income-oriented investors.
RBC Capital analyst Elvira Scotto reiterated a buy rating on EPD stock following the company’s investor update call. Scotto is optimistic about the company’s organic growth projects, particularly in the Permian Basin, which is expected to drive consistent growth for the next decade. She believes that EPD’s strong operations base and balance sheet position it well to support its growth investments and sustain mid-single-digit distribution growth.
Goldman Sachs (GS)
Goldman Sachs, one of the leading investment banks in the U.S., reported better-than-expected first-quarter results driven by strong trading and investment banking revenue. The bank returned $2.43 billion to shareholders through share repurchases and dividends in the first quarter. With a dividend yield of 2.7%, GS offers an attractive income opportunity for investors.
Argus analyst Stephen Biggar upgraded his rating on Goldman Sachs to buy from hold, citing the bank’s solid performance during an investment banking upturn. He expects the current recovery in the investment banking space to continue, supported by improving equity and debt underwriting business and strong M&A deal activity. Biggar anticipates improved revenues in the second half of 2024, driven by robust capital formation and IPO issuance.
Cisco Systems (CSCO)
Cisco Systems, a networking equipment maker, returned $2.8 billion to stockholders in the second quarter of fiscal 2024 through share repurchases and dividends. The company announced a 3% increase in its dividend to 40 cents per share, with a dividend yield of 3.3%. Bank of America Securities analyst Tal Liani upgraded Cisco Systems to buy, citing three catalysts for growth: AI-related tailwinds, security business expansion, and synergies from recent acquisitions.
Liani is bullish on Cisco’s prospects, expecting growth in the networking sector driven by AI buildouts and share gains. While acknowledging near-term challenges, Liani believes that the stock’s valuation reflects Wall Street’s expectations and that the security business will drive accelerated growth. Cisco’s strategic initiatives and product launches position it well for long-term success.
Dividend-paying stocks such as EPD, GS, and CSCO offer investors an opportunity to generate income while benefiting from potential long-term growth. By following the recommendations of Wall Street analysts and conducting thorough research, investors can build a diversified portfolio of high-quality dividend stocks to navigate uncertain market conditions and achieve their financial goals.
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