For Stable Returns, Wall Street Analysts Recommend These Dividend Stocks

The stock market has experienced a surge in enthusiasm with the arrival of President Donald Trump, but questions linger regarding potential tax cuts and tariffs. Amid such uncertainties, dividend-paying stocks can provide a cushion for investors if market conditions turn volatile. These stocks, known for offering stable income, can be a reliable choice for those seeking consistent returns during uncertain economic times.

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Investors looking to add dividend stocks to their portfolios should focus on companies with solid cash flows and the ability to pay consistent dividends. Insights from top Wall Street analysts can help identify the most promising options. Below, we explore three dividend-paying stocks highlighted by top analysts, as tracked by TipRanks, a platform ranking analysts based on their performance.

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AT&T

AT&T (T), the well-known telecommunications giant, stands out as a strong dividend-paying stock. Recently, the company declared a quarterly dividend of $0.2775 per share, payable on February 3, offering investors a yield of nearly 5%.

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Argus Research analyst Joseph Bonner recently upgraded AT&T stock from "Hold" to "Buy" with a price target of $27. His positive outlook follows the company’s analyst day event, where it outlined its strategy and long-term financial goals. During the event, AT&T raised its adjusted earnings per share (EPS) forecast for 2024 and shared encouraging projections for shareholder returns, earnings growth, and cash flow.

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Bonner emphasized AT&T’s progress in overcoming past challenges tied to problematic acquisitions and its focus on the convergence of wireless and fiber internet services. He highlighted the company’s cost-saving initiatives, network modernization efforts, and potential for revenue acceleration as key drivers of future performance. Additionally, AT&T plans to capture growth opportunities from wireless and fiber convergence through strategic investments.

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While AT&T is not considering dividend increases or mergers and acquisitions in the near term, it remains committed to protecting its dividend payments. Notably, the company aims to return $40 billion to shareholders between 2025 and 2027, splitting this amount evenly between dividends and share buybacks.

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Bonner’s analysis is backed by a strong track record. Ranked No. 310 among over 9,300 analysts on TipRanks, his recommendations have been profitable 67% of the time, with an average return of 14.1%.

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Chord Energy

Chord Energy (CHRD), an independent oil and gas company operating in the Williston Basin, is another standout dividend stock. As part of its capital returns program, the company aims to return over 75% of its free cash flow to shareholders. Recently, Chord paid a base dividend of $1.25 per share and a variable dividend of $0.19 per share.

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Mizuho analyst William Janela, who ranks Chord Energy as a "Top Pick," reaffirmed his "Buy" rating on the stock with a price target of $178. He noted that Chord Energy’s preliminary guidance for the year provides greater visibility into its outlook compared to its peers. The company is expected to achieve improved capital efficiencies, supported by its successful integration of assets acquired from Enerplus.

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Janela highlighted Chord’s strong balance sheet, with a net debt-to-EBITDX ratio of approximately 0.2x, one of the lowest among exploration and production (E&P) peers. This positions the company well to weather volatile oil prices. Additionally, he observed that the stock trades at a discount relative to peers, despite its enhanced scale and high-quality inventory in the Bakken Basin following the Enerplus acquisition.

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For Q4 2024, Janela estimates free cash flow of $235 million, with approximately $176 million expected to be returned to shareholders through dividends and share buybacks. His strong performance as an analyst is reflected in his TipRanks ranking, where he is positioned at No. 656, with a 52% success rate and an average return of 19.2%.

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Diamondback Energy

Diamondback Energy (FANG), an independent oil and natural gas company operating in the Permian Basin, rounds out this list. For Q3 2024, the company paid a base dividend of $0.90 per share and is known for its strong cash return policy, with 50% of free cash flow allocated to shareholders.

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Mizuho analyst Nitin Kumar reaffirmed a "Buy" rating on Diamondback Energy with a price target of $207. Kumar highlighted the company’s solid execution and modest cost savings, which are evident in its maintained preliminary 2025 outlook following its acquisition of Endeavor Energy Resources in early 2024. The acquisition has bolstered the scale and quality of Diamondback’s asset base.

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Kumar expects Diamondback to report Q4 2024 EBITDA of $2.543 billion, free cash flow of $1.243 billion, and capital expenditure of $996 million, which aligns closely with Wall Street estimates. The analyst praised the company’s leadership in cash return payouts and its high base dividend yield, which reflects its strong cost control and efficient operations.

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Kumar’s analysis highlights Diamondback’s ability to generate shareholder value through its disciplined approach. Ranked No. 119 among over 9,300 analysts on TipRanks, Kumar has achieved a 67% success rate, delivering an average return of 14.1%.

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In uncertain times, dividend-paying stocks can provide investors with a stable source of income and protection against market volatility. Companies like AT&T, Chord Energy, and Diamondback Energy, backed by strong fundamentals and positive analyst ratings, offer compelling opportunities for those seeking consistent returns. As investors navigate an unpredictable market, these stocks stand out as reliable options for long-term growth and income.

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