Investors faced a rocky start in September due to market volatility in the first week, but dividend-paying stocks can provide stability.

 

Long-term investors can look past short-term fluctuations and focus on stocks that offer both dividends and share price growth to enhance overall portfolio returns.

 

The insights from top Wall Street analysts can assist investors in identifying stocks with strong fundamentals and reliable dividend payments.

 

Here are three dividend stocks highlighted by Wall Street’s top experts on TipRanks, a platform that ranks analysts based on their historical performance.

 

First, we look at MPLX (MPLX), a midstream energy company. For Q2 2024, the company’s quarterly cash distribution was 85 cents per common unit (annual $3.40). MPLX offers an attractive yield close to 8%.

 

Recently, RBC Capital analyst Elvira Scotto reaffirmed a buy rating on MPLX stock with a price target of $47. She updated her model to reflect the company’s strong Q2 results, where adjusted earnings before interest, taxes, depreciation, and amortization surpassed the Street’s estimate by 3%.

 

Scotto raised her adjusted EBITDA estimates for 2024 and 2025 due to the strong performance in the Logistics & Storage segment and joint venture consolidations. She retained her distribution per unit estimate of $3.57 for 2024 and $3.84 for 2025.

 

Scotto continues to view MPLX as "one of the most appealing income plays among large-cap MLPs [master limited partnerships]", citing its strong yield and increasing free cash flow generation. She believes MPLX’s solid free cash flow will enable the company to grow its business and enhance shareholder returns via buybacks.

 

She also noted that MPLX is expanding its natural gas and natural gas liquids assets across its integrated network through organic projects, joint ventures, and bolt-on acquisitions.

 

Scotto ranks No. 18 among over 9,000 analysts tracked by TipRanks, with her ratings being profitable 69% of the time and delivering an average return of 20.8%.

 

Next, we focus on another dividend-paying energy stock, Chord Energy (CHRD). This independent oil and gas company operates in the Williston Basin. The company recently paid a base dividend of $1.25 per share of common stock and a variable dividend of $1.27 per share.

 

On Sept. 4, RBC Capital analyst Scott Hanold reaffirmed a buy rating on CHRD stock with a price target of $200. He increased his earnings per share and cash flow per share estimates for 2024 and 2025 by nearly 3% to account for slightly higher production and lower operating costs.

 

Hanold expects free cash flow of $1.2 billion in 2024 and $1.4 billion in 2025. He anticipates that FCF will rise in the latter half of 2024 due to the integration of Chord Energy and Enerplus assets, which the company acquired this year.

 

Commenting on the Enerplus integration, Hanold said, "We remain optimistic the company is well-positioned to not just meet but potentially exceed the synergy target as operations are fully integrated."

 

He also expects quarterly distributions of $4.50 to $5.00 per share in the latter half of 2024, with dividends accounting for about 60% of the distributions and buybacks making up 40%.

 

Hanold ranks No. 27 among over 9,000 analysts tracked by TipRanks, with his ratings being successful 63% of the time and delivering an average return of 25.4%.

 

This week’s third pick is fast-food giant McDonald’s (MCD). MCD stock offers a dividend yield of 2.3%. McDonald’s is a dividend aristocrat, having increased its dividends for 47 consecutive years.

 

On Sept. 3, Tigress Financial analyst Ivan Feinseth reaffirmed a buy rating on MCD stock and raised his price target to $360 from $355. Despite a challenging environment, Feinseth remains optimistic about McDonald's due to its ongoing technology initiatives, innovation, and value focus, which support its resilient business model and long-term growth potential.

 

Feinseth noted that the company is concentrating on enhancing its value offerings to regain its competitive edge. He highlighted several recent value deals introduced by McDonald’s, such as the $5 meal deal, which has improved its image as an affordable fast-food chain.

 

In addition, Feinseth pointed out McDonald’s competitive advantage, driven by its strong brand equity, loyalty program, and digital initiatives. The company boasts a loyalty membership base of 166 million members, with a target of 250 million active loyalty members by 2027.

 

The analyst also noted that McDonald’s is making capital investments of $2 billion to $2.5 billion annually to expand its store footprint and improve technology, including enhancing its ordering capabilities through automated voice artificial intelligence. Overall, Feinseth is confident in McDonald’s long-term growth potential and its ability to boost shareholder returns via dividends and share buybacks. He expects McDonald’s to announce a dividend hike in October, similar to the 10% increase announced last year.

 

Feinseth ranks No. 210 among over 9,000 analysts tracked by TipRanks. His ratings have been profitable 60% of the time, delivering an average return of 11.9%.