Investors can diversify their portfolios and increase profits by investing in stocks that pay out dividends.
To identify promising opportunities, investors should look for companies with a solid track record of paying dividends supported by strong financial performance.
Outlined below are three attractive dividend stocks highly endorsed by prominent analysts on Wall Street, as per TipRanks, a platform that evaluates analysts’ accuracy based on their historical performance.
Darden Restaurants
Leading the list of recommended dividend stocks is Darden Restaurants (DRI), the owner of popular upscale dining brands like Olive Garden, LongHorn Steakhouse, and Yard House. In the latest fiscal quarter, Darden reported a mixed performance, surpassing earnings estimates but slightly missing revenue forecasts due to heightened competition.
For the fiscal year 2024, Darden distributed $628 million in dividends, allocated $454 million for share repurchases, and raised its quarterly dividend by almost 7% to $1.40 per share, resulting in a 3.5% dividend yield.
Following the earnings release, BTIG analyst Peter Saleh maintained a buy rating on DRI with a price target of $175, highlighting the company’s expected double-digit total shareholder return and promising growth prospects driven by pricing strategies, marketing campaigns, and inflation moderation.
Saleh emphasized Darden’s consistent outperformance in sales and restaurant margins within the industry, positioning it as a solid contender in the market.
Saleh ranks 360th among over 8,900 analysts monitored by TipRanks, with a success rate of 61% and an average return of 11.7%. (Check Darden’s Financial Statements on TipRanks)
International Seaways
The next recommended stock is International Seaways (INSW), a shipping company that provides transportation services for crude oil and petroleum products. In June, the company paid a dividend of $1.75 per share, representing 60% of its adjusted net income for the first quarter.
INSW reported a total dividend payout of $5.74 per share in the last twelve months, resulting in a dividend yield exceeding 13%.
After discussions with INSW’s management, analyst Benjamin Nolan from Stifel reaffirmed a buy rating with an increased target price of $68, citing a robust tanker sector driven by rising global oil demand, limited new vessel supply, and extended voyage distances due to geopolitical challenges.
Nolan expects INSW to maintain significant additional dividends, supported by an estimated surplus cash flow of $200-300 million after capital expenditures. The analyst forecasts a 2024 dividend of $5.51 per share but sees the potential for higher payouts.
Nolan holds the 68th position among more than 8,900 analysts tracked by TipRanks, boasting a success rate of 67% and an average return of 19.5%. (Check International Seaways’ Stock Charts on TipRanks)
Citigroup
Lastly, the third recommended dividend stock this week is the financial giant Citigroup (C), offering a 3.3% yield with a quarterly dividend of 53 cents per share.
During the Services Investor Day on June 18, Citigroup’s management expressed confidence in achieving the 2024 guidance, driven by revenue growth in core businesses despite economic uncertainties and potential interest rate declines.
Following the event, Goldman Sachs analyst Richard Ramsden reiterated a buy rating on Citigroup, raising the target price to $72 from $71, citing improved earnings per share projections for 2024-2026 based on the bank’s progress in strategic transformations.
Ramsden praised Citi’s focused approach to risk management, enhancement of data quality, and strategic advancements in the Services sector, forecasting a significant revenue contribution by 2026.
The analyst’s faith in Citi stems from its extensive global reach, strong client relationships, and investments in technology driving market share expansion.
Ramsden ranks 969th among more than 8,900 analysts tracked by TipRanks, with a success rate of 65% and an average return of 11.9%. (Explore Citigroup Technical Analysis on TipRanks)
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