These Dividend Stocks Are Bullish According to Wall Street Analysts

With the Federal Reserve embarking on a rate-cutting campaign, dividend stocks could soon step into the limelight. These investments often gain appeal in a low-interest-rate environment, as they provide steady income streams and potential capital appreciation.

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For investors seeking robust dividend-paying stocks, guidance from top analysts can offer valuable insights. Analysts consider factors such as a company's financial health, dividend history, and future prospects to identify attractive options.

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Here are three dividend-paying stocks currently spotlighted by Wall Street's top analysts, as ranked by TipRanks, a platform that evaluates analysts based on their performance.

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Exxon Mobil (XOM)

The first recommendation is Exxon Mobil, a leading oil and gas company. Exxon recently delivered strong third-quarter results, driven by a notable increase in production. The company achieved its highest liquids production in over four decades, averaging 3.2 million barrels per day. This performance underscores Exxon's operational strength and ability to capitalize on market opportunities.

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A recognized dividend aristocrat, Exxon returned $9.8 billion to shareholders in the third quarter alone. The company also raised its quarterly dividend by 4%, to 99 cents per share, marking its 42nd consecutive year of dividend increases. With a forward dividend yield of 3.3%, Exxon remains a favorite for income-focused investors.

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Evercore analyst Stephen Richardson reiterated a Buy rating on Exxon following its third-quarter earnings, setting a price target of $135. Richardson emphasized Exxon's commitment to long-term growth, highlighting its strategic investments in major projects and its recent acquisition of Pioneer Natural Resources.

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According to Richardson, these efforts have positioned Exxon on a stronger competitive footing, both relative to its peers and its own historical performance.

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Richardson also noted that Exxon's operational cash flow, excluding working capital changes, totaled $15.2 billion for the quarter—exceeding his expectations by $1.1 billion. Additionally, the company reduced its net debt by $1.1 billion during the period, supported by $2.3 billion in working capital inflows.

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Richardson ranks 924th among over 9,100 analysts tracked by TipRanks, with his recommendations delivering a 61% success rate and an average return of 9.6%.

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Coterra Energy (CTRA)

Next on the list is Coterra Energy, an exploration and production company with a strong presence in the Permian Basin, Marcellus Shale, and Anadarko Basin. In the third quarter, Coterra demonstrated its shareholder commitment by returning 96% of its free cash flow (FCF) through a quarterly dividend of 21 cents per share and share repurchases worth $111 million. Year-to-date, the company has returned 100% of its free cash flow to shareholders. Its forward dividend yield currently stands at 3%.

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Recently, Coterra announced two major acquisitions totaling $3.95 billion. These deals involve the purchase of assets from Franklin Mountain Energy and Avant Natural Resources, which are expected to enhance Coterra’s core area in the New Mexico section of the Permian Basin. These assets will also strengthen the company’s operational capabilities.

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Reacting to these developments, Mizuho analyst Nitin Kumar reaffirmed a Buy rating on Coterra and maintained a price target of $37, designating it as a "Top Pick." While Kumar acknowledged that the newly acquired assets are slightly less productive than Coterra's existing portfolio, their higher oil mix and lower costs make them valuable additions. Kumar remains optimistic about Coterra’s future, noting that its status as the lowest-cost natural gas producer allows it to generate substantial cash flow, even in challenging market conditions.

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Kumar ranks 187th among TipRanks analysts, with a 64% success rate and an average return of 14.3%.

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Walmart (WMT)

Finally, retail giant Walmart stands out as a reliable dividend payer. The company posted strong third-quarter results, supported by growth in its e-commerce business and improved performance in non-grocery categories. These results led Walmart to raise its full-year guidance, reflecting confidence in its growth trajectory.

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Walmart recently increased its annual dividend by about 9%, to 83 cents per share, marking the 51st consecutive year of dividend hikes. This consistency makes Walmart an attractive option for dividend investors.

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Jefferies analyst Corey Tarlowe boosted his price target on Walmart stock from $100 to $105 after the company’s third-quarter earnings, reaffirming a Buy rating. Tarlowe highlighted Walmart's impressive same-store sales growth, driven by higher transaction volumes and favorable trends in general merchandise. He also noted improvements in Walmart’s margins, attributing these gains to better inventory management, e-commerce profitability, and a favorable business mix.

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Additionally, Tarlowe pointed to strong general merchandise sales in the U.S., driven by an enhanced product assortment and market share gains across various income groups. He expressed confidence in Walmart’s ability to deliver value to customers while maintaining robust growth and expanding its market share.

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Tarlowe ranks 331st among TipRanks analysts, with a 67% success rate and an average return of 17.6%.

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Conclusion

Dividend-paying stocks like Exxon Mobil, Coterra Energy, and Walmart offer compelling opportunities for investors, particularly in the current economic environment. These companies combine reliable dividend payments with strong growth prospects, making them attractive options for those seeking income and long-term capital appreciation. Backed by positive analyst ratings, these stocks could shine as the Federal Reserve continues to lower interest rates, potentially fueling greater investor demand for high-quality dividend payers.

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