Investors facing uncertainty due to macroeconomic challenges and geopolitical tensions may find solace in dividend-paying stocks. Wall Street analysts recommend considering dividend stocks as a stable investment option in times of market volatility. Enterprise Products Partners (EPD) stands out as one of the top picks in the current market scenario. The midstream energy services provider has a track record of increasing its cash distribution for 25 consecutive years, with a compound annual growth rate of 7%. Recently, Enterprise Products announced a quarterly cash distribution of $0.515 per unit, marking a 5.1% year-over-year increase. This stock offers an attractive dividend yield of 7.1%.
RBC Capital analyst Elvira Scotto is optimistic about EPD’s growth prospects. Scotto maintains a buy rating on EPD stock, setting a price target of $35. According to Scotto, the company’s organic growth projects, particularly in the Permian Basin, position it well for sustained growth over the next decade. She believes that EPD’s strong operations base and balance sheet will support its growth investments, leading to mid-single-digit growth in distributions.
Another highly recommended dividend stock is Goldman Sachs (GS), a prominent U.S. investment bank. The company reported better-than-expected first-quarter results, driven by increased trading and investment banking revenue. Despite past challenges, the bank managed to return $2.43 billion to shareholders through share repurchases and dividends. In addition, Goldman Sachs declared a dividend of $2.75 per share, offering a dividend yield of 2.7%.
Argus analyst Stephen Biggar upgraded his rating for Goldman Sachs to buy from hold, with a price target of $465. Biggar commended Goldman’s strong performance during an investment banking upturn, citing a robust rebound in capital market activities. He predicts improved revenues in the second half of 2024, supported by positive trends in equity and debt underwriting. Biggar also highlighted significant growth in industrywide M&A deal value, pointing towards a sustained recovery in the investment banking sector.
Cisco Systems (CSCO), a leading networking equipment manufacturer, is another dividend stock worth considering. The company recently announced an increase in its dividend to 40 cents per share, representing a 3% growth rate. With a dividend yield of 3.3%, Cisco Systems remains an attractive option for income-seeking investors.
Bank of America Securities analyst Tal Liani upgraded Cisco Systems to buy from hold, setting a new price target of $60. Liani cited three key catalysts for the stock: AI-related opportunities, growth in the security business, and synergies from recent acquisitions. He anticipates a resurgence in Cisco’s networking segment driven by AI adoption by hyperscalers. While short-term challenges may persist, Liani believes that Wall Street’s expectations already account for these fluctuations. Additionally, he expects accelerated growth in the security business, propelled by new product launches and market stabilization.
Dividend-paying stocks like Enterprise Products Partners, Goldman Sachs, and Cisco Systems offer stability and income potential in the current market environment. By following the recommendations of top Wall Street analysts, investors can make informed decisions to navigate through prevailing uncertainties and capitalize on long-term growth opportunities.