Top Wall Street analysts are bullish on these three dividend-paying stocks

With the Federal Reserve expected to cut interest rates in September, dividend-paying stocks could be set to outperform.

This is because the dividend yields on these names will look more attractive compared to the yields offered by other income-generating assets, including bonds.

Given the vast universe of dividend-paying companies, it might be difficult for investors to pick the right stocks. Investors may want to consider top analyst recommendations while selecting attractive dividend stocks with strong financials.

Here are three dividend stocks highlighted by top Wall Street pros on TipRanks, a platform that ranks analysts based on their past performance.

EPR properties

This week’s first dividend act is EPR properties (EPR), a real estate investment trust. It is focused on experiential properties such as movie theaters, amusement parks, food and play centers and ski resorts. EPR offers a dividend yield of 7.3%.

RBC Capital analyst Michael Carroll recently upgraded his rating on EPR to buy from hold and raised his price target to $50 from $48. He believes the company has successfully weathered tough operating conditions, including the Covid-19 pandemic and actor/writer strikes.

Carroll believes EPR is in a better position to deliver favorable results as the aforementioned headwinds fade. “We expect cinema box office to reaccelerate in 2H24 and 2025, driving higher percentage rents and strengthening the tenant base,” the analyst said.

Commenting on concerns about EPR’s significant exposure to movie theaters, the analyst noted that management plans to reduce that exposure over time. He added that concerns about AMC, one of the company’s key tenants, appear to be easing to some extent, with AMC taking initiatives such as capital increases and debt refinancing.

Finally, Carroll pointed out that EPR’s high dividend yield is adequately protected by an adjusted funds payout ratio of nearly 70% from operations and a strong balance sheet with net debt of 5.2 times earnings before interest, taxes, depreciation and amortization rate.

Carroll is ranked #703 out of over 9,000 analysts tracked by TipRanks. Its ratings were profitable 63% of the time, delivering an average return of 7.7%. Check out EPR Property Structure on TipRanks.

Energy transfer

The next choice of dividends is Energy transfer (ET), a limited partnership. The midstream energy company delivered a quarterly cash distribution of 32 cents per unit on Aug. 19, reflecting a 3.2 percent year-over-year increase. Energy Transfer has a dividend yield of 8%.

Reacting to ET’s Q2 results, Stifel analyst Selman Akyol said the company reported better-than-expected EBITDA and cited several growth opportunities, mainly in the company’s Permian to Gulf Coast value chain.

Sentiment on natural gas is bullish as it is expected to supply a major portion of the energy needs of AI data centers. Akyol pointed out that ET management believes that the company’s strong footprint can provide the natural gas needed to provide continuous power to data centers.

Akyol pointed out that ET is also benefiting from increased demand from utilities, mainly in Texas and Florida. These two states offer ET attractive growth prospects given their potential data centers and solid population growth.

“Power Transfer is never short opportunities and while the rate of capital deployment may increase, we continue to favor its positioning,” Akyol said. He reaffirmed a buy rating on ET stock with a $19 price target.

Akyol is ranked #137 out of over 9,000 analysts tracked by TipRanks. Its evaluations were successful 71% of the time, delivering an average return of 10.3%. Check out Power Transfer Stock Charts on TipRanks.

Walmart

Big box retailer Walmart ( WMT ) recently impressed investors with its upbeat results for the second quarter of fiscal 2025. The company also raised its full-year outlook to reflect its strong performance in the first half of the year.

Walmart continues to reward shareholders with dividends and share buybacks. In the first half of fiscal 2025, the company paid more than $3 billion in dividends and repurchased $2.1 billion worth of stock. Earlier this year, Walmart raised its dividend 9% to 83 cents per share. This marked the 51st consecutive year of dividend increases for the company.

After the Q2 print, Baird analyst Peter Benedict reiterated a buy rating on Walmart and raised his price target to $82 from $70. He pointed out that the retailer has gained market share despite a turbulent macro environment due to its persistent focus on value and convenience.

The analyst said Walmart’s second-quarter results clearly reflected the effect of its transformation efforts, “with ~70% of growth comp. of US digitally driven and >50% of enterprise growth (earnings before interest and tax) from higher margin advertising. /income streams for members.”

Benedict also pointed to the 10 basis point sequential increase in Walmart’s 12-month return on investment to 15.1 percent. This improvement has been fueled by the company’s investments in areas such as automation and generative AI.

Benedict is ranked #35 out of over 9,000 analysts tracked by TipRanks. Its ratings were profitable 71% of the time, delivering an average return of 15.9%. See Walmart stock buybacks on TipRanks.