With the Federal Reserve expected to cut interest rates in September, dividend-paying stocks are likely to outperform.
This is because the dividend yield from these stocks will be more attractive than the returns from other income-producing assets, including bonds.
With such a large universe of dividend-paying companies, investors can have a hard time picking the right stocks. Investors may want to consider the recommendations of top analysts when choosing attractive dividend-paying stocks with strong financials.
Here are three dividend stocksmarked with Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their past performance.
EPR Properties
This week’s first dividend paying stock is EPR Properties (EPR), a real estate investment fund. The fund focuses on experiential properties such as movie theaters, theme parks, dining and entertainment centers, and ski resorts. EPR offers a dividend yield of 7.3%.
RBC Capital Analyst Michael Carroll recently upgraded his rating on EPR to buy from hold and increased his price target from $48 to $50. He credits the company for successfully navigating difficult operating conditions, including the Covid-19 pandemic and the actors/writers strikes.
Carroll believes EPR is better positioned to deliver favorable results as those headwinds recede. “We expect box office to accelerate again in the second half of 2024 and 2025, driving higher rent percentages and strengthening the tenant base,” the analyst said.
Commenting on concerns about EPR’s significant exposure to movie theaters, the analyst noted that management intends to reduce that exposure over time. He added that concerns about AMC, one of the company’s major tenants, appear to be easing to some extent, with AMC undertaking initiatives such as capital raising and debt refinancing.
Finally, Carroll stressed that EPR’s high dividend is well protected by an adjusted operating payout ratio of nearly 70% and a solid balance sheet with a net debt-to-earnings ratio of 5.2 times.
Carroll ranks No. 703 out of more than 9,000 analysts tracked by TipRanks. His ratings have been profitable 63% of the time, delivering an average return of 7.7%. See. Ownership Structure of EPR Properties on TipRanks.
Energy transfer
The next dividend option is Energy transfer (and), a limited partnership. The intermediate energy company made a quarterly cash distribution of 32 cents per unit August 19reflecting year-over-year growth of 3.2%. Energy Transfer has a dividend yield of 8%.
Reacting to ET’s Q2 results, Stifel analyst Selman Akyol The company said it reported better-than-expected EBITDA and pointed to several growth opportunities, primarily in its Permian to Gulf Coast value chain.
The outlook for natural gas is optimistic, as natural gas is expected to supply a large portion of the energy needs of AI data centers. Akyol stressed that ET management believes the company’s solid footprint can provide the natural gas needed to provide uninterrupted power to data centers.
Akyol pointed out that ET is also benefiting from rising demand from utilities, primarily in Texas and Florida. These two states offer attractive growth prospects for ET, with potential data centers and solid population growth.
“Energy Transfer is never a short-term opportunity and while capex run rates may increase, we continue to support its position,” Akyol said. He reiterated a buy rating on ET shares with a price target of $19.
Akyol ranks #137 out of more than 9,000 analysts tracked by TipRanks. His ratings have been successful 71% of the time, delivering an average return of 10.3%. See. Energy Transfer Stock Chart on TipRanks.
Walmart
Major Retailer Walmart (WMT) has recently impressed investors with its upbeat results for Q2 FY2025The company also raised its full-year outlook to reflect strong first-half performance.
Walmart continues to reward shareholders with dividends and stock buybacks. In the first half of fiscal 2025, the company paid over 3 billion dollars in dividends and share repurchases are valuable $2.1 billion. Earlier this year, Walmart increase its dividend up 9% to 83 cents a share. This is the 51st consecutive year the company has increased its dividend.
Following Q2 print, Baird analyst Peter Benedict reiterated a buy rating on Walmart and raised its price target to $82 from $70. He noted that the retailer has gained market share despite a volatile macro backdrop, thanks to its continued focus on value and convenience.
Walmart’s Q2 results clearly reflect the impact of its transformation efforts, “with approximately 70% of its US revenue growth driven by digital and >50% of its national business growth,” the analyst said. [earnings before interest and taxes] growth coming from higher margin advertising/membership revenue streams.”
Benedict also highlighted a 10 basis point sequential increase in Walmart’s investment returns over the past 12 months to 15.1%. The improvement was driven by the company’s investments in areas such as automation and generative AI.
Benedict ranks #35 out of more than 9,000 analysts tracked by TipRanks. His ratings have been profitable 71% of the time, delivering an average return of 15.9%. See. Walmart Stock Buyback on TipRanks.
