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 steady income. Investors ought to consider the insight of top Wall Street pros as they hunt 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 their past performance.

Verizon Communications

First up is telecom giant Verizon Communications (VZ), which recently reported its fourth-quarter results and impressed investors with the robust jump in wireless postpaid phone subscriber additions.

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

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

“Ongoing 5G and fixed wireless broadband momentum and increased services offerings combined with operating efficiencies and margin improvement will drive a reacceleration in cash flow growth and improving Business Performance trends,” said Feinseth.

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

Feinseth ranks No. 214 among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 61% of the time, with each delivering an average return of 11.7%. (See Verizon Hedge Fund Activity on TipRanks)

Enterprise Products Partners

This week’s second dividend pick is Enterprise Products Partners (EPD), a master limited partnership that provides 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 Feb. 14. This quarterly distribution marks a 5.1% year-over-year increase and reflects a yield of nearly 8%.

In reaction to EPD’s fourth-quarter results, Stifel analyst Selman Akyol reaffirmed a buy rating on the stock and raised the price target to $36 per share from $35. The analyst stated that Q4 2023 results slightly surpassed his expectations. He increased his 2024 earnings before interest, tax, depreciation and amortization estimate by more than 2%, mainly due to the company’s natural gas liquids pipeline segment.

Further, Akyol anticipates that the momentum in EPD’s pipeline and export throughputs will continue in the near term. The analyst also pointed out that EPD has increased its distributions for 25 years. He expects distributions to be the primary mode of returning capital to unitholders, with buybacks projected to be opportunistic.

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

Akyol holds the 695th position among more than 8,700 analysts tracked by TipRanks. His ratings have been profitable 64% of the time, with each delivering an average return of 5%. (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 Feb. 14. MPLX offers a dividend yield of 9%.

Based on the recently announced fourth-quarter results, RBC Capital analyst Elvira Scotto reiterated a buy rating on MPLX stock and increased the price target to $46 per share from $45. The analyst noted that the company’s Q4 2023 adjusted EBITDA surpassed consensus expectations by 4%, thanks to increased product volumes, higher pipeline rates in the logistics and storage segment, and higher processing volumes in the gathering and processing unit.

Given the high yield offered by the stock, Scotto thinks that MPLX remains one of the most attractive income plays in the large-cap MLP space. The analyst expects a cash distribution of $3.57 per unit in 2024 and $3.84 per unit in 2025. That’s up from $3.40 in 2023.   

Scotto thinks that “future cash flow generation in conjunction with the financial flexibility provided by decreasing leverage and adequate distribution coverage can drive incremental capital returns to investors over time.”    

Scotto ranks No. 83 among more than 8,700 analysts tracked by TipRanks. Her ratings have been profitable 64% of the time, with each delivering an average return of 17.8%. (See MPLX Technical Analysis on TipRanks)