While many growth stocks have rebounded in 2023, investors are still on the lookout for dividend stocks that can provide stable income and potential long-term capital appreciation. Here are five dividend stocks worth considering, according to top experts on TipRanks, a platform that ranks analysts based on their past performance.
IBM
Tech giant IBM recently reported mixed results for the second quarter. While revenue fell short of expectations, the company’s earnings surpassed estimates due to improved gross margin. IBM is focusing on growth areas like hybrid cloud computing and artificial intelligence. It generated free cash flow of over $3.4 billion and paid dividends worth $3 billion in the first six months of 2023. IBM expects to deliver free cash flow of $10.5 billion for the full year. Earlier this year, IBM increased its quarterly dividend by 0.6% to $1.66, marking the 28th consecutive year of dividend hikes. IBM’s dividend yield is about 4.6%. Following the results, Stifel analyst David Grossman increased his price target for IBM stock to $144 from $140 and reiterated a buy rating.
Chord Energy
Chord Energy is an oil and gas operator with assets in the Williston Basin. The company rewards shareholders through a quarterly base dividend, a variable dividend, and share buybacks. For the first quarter, Chord declared a total cash dividend of $3.22 per share, including a variable dividend of $1.97 per share. RBC Capital analyst Scott Hanold sees the possibility of the company exceeding its 75% minimum shareholder payout. Hanold expects Chord to declare a variable dividend of $0.15 per share for the second quarter, along with a base dividend of $1.25 per share and share buybacks in the range of $25 million to $30 million.
Energy Transfer LP
Energy Transfer is a publicly traded limited partnership that operates a vast pipeline network. On July 25, the company announced a quarterly cash distribution of $0.31 per common unit for the second quarter, marking a 0.8% increase compared to the first quarter of 2023. The company is targeting a 3% to 5% growth in its annual distribution. RBC Capital analyst Elvira Scotto expects the performance of midstream companies to be affected by lower commodity prices. Nonetheless, she reiterated a buy rating on Energy Transfer stock with a price target of $17.
EOG Resources
EOG Resources is a crude oil and natural gas exploration and production company. Last year, the company returned $5.1 billion through regular and special dividends, representing 67% of its free cash flow. For the first quarter of 2023, EOG declared a regular quarterly dividend of $0.825 per share. Mizuho analyst Nitin Kumar expects EOG to deliver free cash flow of $753 million in the second quarter, despite a 10% fall in aggregate pricing compared to the first quarter. Kumar reiterated a buy rating on EOG with a price target of $146.
Morgan Stanley
Morgan Stanley reported strong second-quarter results, with the strength in its wealth management division offsetting lower trading revenue. The bank recently announced a dividend hike to $0.85 per share and reauthorized a $20 billion share repurchase program. BMO Capital analyst James Fotheringham increased his forward estimates and raised his price target for Morgan Stanley stock.