Amidst expectations of interest rate cuts by the Federal Reserve in September, dividend-paying stocks are gaining attention as potential outperformers. This is especially true as the dividend yields from such stocks are poised to become more attractive compared to other income-generating assets like bonds. With a plethora of companies offering dividends, choosing the right stocks can be a challenging task for investors. In such a scenario, seeking advice from top analysts could prove to be beneficial. According to analysts on TipRanks, EPR Properties (EPR), a real estate investment trust, is a top dividend stock pick. Specializing in experiential properties such as movie theaters, amusement parks, 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 raised the price target to $50, citing the company’s successful navigation through challenging operating conditions like the Covid-19 pandemic. Carroll expressed confidence in EPR’s ability to deliver positive results, especially with the anticipation of a resurgence in the theatrical box office, which would lead to higher percentage rents and a stronger tenant base.
Energy Transfer (ET), a limited partnership operating in the midstream energy sector, is another dividend stock worth considering. With a dividend yield of 8%, ET recently announced a quarterly cash distribution of 32 cents per unit, reflecting a year-over-year growth of 3.2%. Stifel analyst Selman Akyol praised ET’s performance in the second quarter and highlighted the company’s growth opportunities, particularly in the Permian to Gulf Coast value chain. Akyol also noted the positive outlook for natural gas, emphasizing its importance in meeting the energy needs of AI data centers. With a strong presence in key states like Texas and Florida, Energy Transfer is well-positioned to capitalize on the growing demand from utilities in these regions. Akyol reiterated a buy rating on ET stock with a price target of $19, underlining the company’s opportunities for growth and favorable positioning in the market.
Big-box retailer Walmart (WMT) has maintained its position as a reliable dividend-paying stock, pleasing investors with its strong performance in the second quarter of fiscal 2025. Walmart’s commitment to rewarding shareholders is evident through its consistent dividend payments and share repurchases. Having paid over $3 billion in dividends and repurchased shares worth $2.1 billion in the first half of fiscal 2025, Walmart continues its legacy of dividend hikes, marking the 51st consecutive year of such increases. Following the impressive Q2 results, Baird analyst Peter Benedict reiterated a buy rating on Walmart, with a revised price target of $82. Benedict lauded the retailer’s market share gains and highlighted the impact of its transformation efforts on financial performance. With the majority of U.S. comp growth being driven digitally and a significant portion of earnings growth coming from high-margin advertising and membership streams, Walmart continues to demonstrate its resilience and adaptability in the retail landscape.
Dividend-paying stocks like EPR Properties, Energy Transfer, and Walmart present promising opportunities for investors seeking income-generating assets in a potentially declining interest rate environment. By heeding the recommendations of top analysts and closely monitoring companies with strong financials and growth potential, investors can build a well-rounded dividend stock portfolio that aligns with their investment goals and risk appetite.