Top Wall Street Analysts' Dividend Stocks Recommendations for Higher Returns

Investors looking to build a robust portfolio can benefit from a combination of growth and dividend stocks, which can offer both capital appreciation and regular income. With the Federal Reserve's recent decision to reduce interest rates by 25 basis points, many investors are increasingly attracted to dividend-paying stocks, as they become more appealing in a low-interest-rate environment. To help guide investors, tracking the recommendations of top Wall Street analysts can uncover solid dividend stocks with strong fundamentals.

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Here are three dividend-paying stocks recommended by leading analysts, as tracked by TipRanks, a platform that ranks analysts based on their past performance.

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Walmart (WMT)

Starting with Walmart (WMT), the retail giant has a remarkable track record of raising its dividend for 51 consecutive years. In its latest earnings report, the company exceeded expectations for the third quarter and raised its full-year guidance. Walmart’s dividend yield stands at 0.9%, and analysts are optimistic about its future performance.

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Tigress Financial’s analyst Ivan Feinseth recently reiterated a buy rating on Walmart stock, raising his price target to $115 from $86. He emphasized Walmart’s ability to capture market share in both grocery and general merchandise sectors, particularly among affluent customers. Feinseth also highlighted Walmart’s efforts to leverage generative artificial intelligence (AI) and machine learning, which aim to enhance the shopping experience both online and in stores. For example, Walmart’s AI-powered shopping assistant, currently in its beta phase, is designed to help customers select products based on their specific needs.

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Additionally, Feinseth noted that Walmart is using technology and automation to streamline operations, improve efficiency, and reduce costs, which should lead to higher profitability. The company’s e-commerce growth, strong brand equity, increased Walmart+ memberships, and expanding advertising revenues further support his positive outlook. Feinseth sees continued upside potential for Walmart, especially with its ongoing dividend hikes and stock repurchase program.

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Feinseth ranks #190 out of over 9,200 analysts tracked by TipRanks, with a success rate of 62% and an average return of 14.4%.

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Gaming and Leisure Properties (GLPI)

Next, we look at Gaming and Leisure Properties (GLPI), a real estate investment trust (REIT) that leases properties to gaming operators under triple-net lease agreements. In this arrangement, tenants cover all costs related to the leased assets, such as maintenance and insurance, in addition to paying rent. GLPI recently declared a quarterly dividend of 76 cents per share, reflecting a 4.1% year-over-year increase, offering an attractive yield of 6.5%.

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RBC Capital analyst Brad Heffern recently included GLPI in the firm’s “Top 30 Global Ideas” list, maintaining a buy rating on the stock with a price target of $57. Heffern is optimistic about GLPI’s investment pipeline, which exceeds $2 billion, and expects it to drive future growth. He also highlighted that the capitalization rates for deals in the pipeline were negotiated in a higher interest rate environment, and should rates decline, GLPI could benefit from more favorable conditions in the gaming sector compared to other REITs.

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Furthermore, GLPI’s recent $110 million term loan agreement with the Ione Band of Miwok Indians to fund a new casino development in California marks the company’s entry into the tribal gaming space, which could open up additional acquisition opportunities. Heffern also noted GLPI’s solid balance sheet, the potential for an improved credit rating, and attractive valuations due to its high-quality cash flows.

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Heffern ranks #815 out of over 9,200 analysts tracked by TipRanks, with a success rate of 47% and an average return of 9.7%.

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Ares Management (ARES)

Finally, Ares Management (ARES), an alternative investment manager, offers diversified investment solutions across various asset classes, including real estate, private equity, credit, and infrastructure. Last month, Ares announced a quarterly dividend of 93 cents per share for its Class A common stock, payable on December 31, offering a dividend yield of 2.1%.

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RBC Capital’s Kenneth Lee recently raised his price target for Ares Management to $205 from $185 and maintained a buy rating on the stock. Lee considers Ares his “favorite name” in the U.S. asset management sector, particularly due to its leadership in the private credit space. He expects Ares to benefit from strong trends in private wealth management and global infrastructure investments. Lee also pointed to the potential for lower corporate taxes under the incoming administration as a tailwind for the company.

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Lee’s positive outlook on Ares is supported by the company’s asset-light business model, its impressive return-on-equity, and strong fundraising momentum. With favorable market conditions ahead, Lee remains bullish on Ares Management.

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Lee ranks #19 out of over 9,200 analysts tracked by TipRanks, with a success rate of 73% and an average return of 18.8%.

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Conclusion

These three dividend-paying stocks—Walmart, Gaming and Leisure Properties, and Ares Management—offer solid growth potential, attractive yields, and strong fundamentals.

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Walmart’s continued success in expanding its market share and leveraging technology positions it for further growth, while GLPI’s strategic investments and solid financial standing make it an appealing choice for income-focused investors. Ares Management, with its diversified asset base and dominance in private credit, stands out as a promising pick for those looking to benefit from future market trends.

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By following the guidance of top analysts and incorporating these stocks into a diversified portfolio, investors can optimize their chances of generating steady income and capital appreciation in a low-interest-rate environment.

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