Top Wall Street analysts pick these dividend stocks for attractive returns
Dividend Stocks to Consider Amid Market Volatility #
September’s volatile start has highlighted the potential benefits of dividend-paying stocks for investors seeking to smooth out market fluctuations. For those with a long-term investment horizon, focusing on stocks that offer both dividends and potential share price appreciation can enhance total portfolio returns.
MPLX LP #
MPLX, a midstream energy company, offers an attractive dividend yield of nearly 8%. The company’s quarterly cash distribution was 85 cents per common unit for the second quarter of 2024, equating to $3.40 on an annualized basis.
An analyst views MPLX as one of the most attractive income plays among large-cap master limited partnerships, citing its robust yield and increasing free cash flow generation. The company’s solid free cash flow is expected to support business growth and enhance shareholder returns through buybacks.
MPLX is expanding its natural gas and natural gas liquids assets across its integrated network through organic projects, joint venture interests, and bolt-on acquisitions.
Chord Energy #
Chord Energy, an independent oil and gas company operating in the Williston Basin, recently paid a base dividend of $1.25 per share of common stock and a variable dividend of $1.27 per share.
An analyst expects free cash flow of $1.2 billion and $1.4 billion in 2024 and 2025, respectively, with an increase anticipated in the second half of 2024 due to the integration of recently acquired Enerplus assets.
The company is expected to distribute quarterly payments of $4.50 to $5.00 per share in the second half of 2024, with dividends accounting for about 60% of the distributions and buybacks amounting to 40%.
McDonald’s #
Fast-food chain McDonald’s offers a dividend yield of 2.3% and has raised its dividends for 47 consecutive years, making it a dividend aristocrat.
An analyst remains bullish on McDonald’s due to its ongoing technology initiatives, innovation, and value focus. The company has introduced several value deals, including a $5 meal deal, to improve its image as an affordable fast-food chain.
McDonald’s competitive advantage is supported by its brand equity, loyalty program, and digital initiatives. The company aims to reach 250 million active loyalty members by 2027, up from its current 166 million members.
The fast-food giant is making significant capital investments to expand its store footprint and improve technology, including enhancing ordering capabilities through automated voice artificial intelligence. Analysts expect McDonald’s to announce a dividend hike in October, potentially similar to the 10% increase announced last year.