In recent times, the stock market has been characterized by significant fluctuations, driven by various factors such as international tariff discussions, the rise of innovative companies like China’s DeepSeek, and the financial performance of major corporations. This volatility presents a challenge for investors seeking stable returns. As a result, the allure of dividend-paying stocks has once again captured attention. However, with the extensive range of dividend stocks available, investors may find it daunting to identify the most promising options.
To simplify this endeavor, tapping into the insights and recommendations of seasoned Wall Street analysts can be invaluable. By leveraging their expertise, investors can make informed decisions based on rigorous evaluations of a company’s financial health and future growth potential. Here, we spotlight three dividend stocks that have garnered attention from prominent analysts on platforms like TipRanks, known for ranking analysts according to their track records.
Starting with International Business Machines (IBM), the technology giant has demonstrated resilience, prompting renewed interest from investors. Recently, IBM reported fourth-quarter earnings that surpassed expectations, with its Software segment leading the charge, particularly through the demand for artificial intelligence (AI) technologies and its well-regarded Red Hat Linux operating system. The company has been proactive in returning capital to shareholders, allotting $1.5 billion in dividends during the final quarter alone, equating to a dividend yield of 2.6%.
This positive outlook led Evercore analyst Amit Daryanani to elevate IBM’s price target significantly from $240 to $275, reinforcing his buy rating. Daryanani highlighted encouraging growth trajectories within the Software sector, implying a balanced approach that offsets challenges faced in other segments like Consulting and Infrastructure. He anticipates a turnaround in the Consulting sector by 2025, hinging on increased IT expenditures and revenue conversion from substantial AI contracts.
Furthermore, Daryanani’s acknowledgment of IBM’s commitment to consistent dividend payments, while hinting at an emphasis on mergers and acquisitions over share repurchases, paints a picture of a company strategically positioning itself for future growth. With a success rate of 61% and an average return of 14%, Daryanani holds appreciable credibility among his peers.
Next, consider Verizon Communications (VZ), a leading player in the telecommunications industry. With a robust performance reported in the fourth quarter of 2024, Verizon celebrated its highest quarterly postpaid phone gross additions in five years. With a significant quarterly dividend of just over 67 cents per share, the stock boasts a compelling dividend yield of 6.8%, appealing to income-focused investors.
Analyst Ivan Feinseth from Tigress Financial reiterated a buy rating, projecting a price target of $55. His optimism is buoyed by a substantial uptick in mobile and broadband subscriber growth, an encouraging trend driven by enhanced 5G adoption and an increase in services revenue. Moreover, Verizon’s initiatives in AI-led innovations signal a forward-thinking approach that may set the stage for further growth.
Feinseth emphasized the company’s commitment to harnessing AI across its network and shared enthusiasm about its expansion into avant-garde technologies such as autonomous vehicle connectivity and smart city infrastructure. The analyst’s history of successful ratings, marked by a 62% hit rate and an average return of 15%, reinforces the case for considering Verizon within a diversified investment portfolio.
Lastly, EPR Properties (EPR), a real estate investment trust (REIT) renowned for its focus on experiential assets, rounds out our analysis. With a keen investment strategy concentrating on venues like theaters, amusement parks, and ski resorts, EPR offers an attractive dividend yield of 7.2%. Following a series of presentations on a nationwide non-deal roadshow, RBC Capital analyst Michael Carroll reasserted a buy rating on the stock, assigning a price target of $50.
Carroll’s bullish perspective stems from EPR’s solid tenant base and insights into consumer preferences leaning towards experiential spending, especially post-pandemic. He anticipates a rebound in box office revenues, projecting a significant increase in new film releases over the next couple of years, which bodes well for the REIT. With EPR’s dividends expected to grow between 3% and 5% annually, Carroll finds the stock’s current valuation—trading at approximately 9.0 times forward adjusted funds from operations—especially appealing.
Interestingly, despite ranking lower than some of his peers, Carroll’s successful rating history demonstrates a respectable 61% accuracy rate, yielding an average return of 7.5%.
While the stock market grapples with volatility, dividend-paying stocks serve as a beacon of stability for investors. IBM, Verizon, and EPR Properties exemplify how strategic positions and commitment to returning capital to shareholders can enhance investment appeal. By grounding decisions in the insights of seasoned analysts, investors can navigate the complexities of the market with greater confidence, securing a more consistent income stream amidst uncertain times.