Top Wall Street analysts are bullish on these 3 dividend stocks for stable returns

CNBC

04-05-2025

Investors with concerns about the risks facing the economy may want to add some stable income to their portfolio in the form of dividend-paying stocks.
To this end, Wall Street experts' recommendations can help pick lucrative dividend stocks that have the ability to make consistent payments despite near-term pressures.
Here are three dividend-paying stocks, highlighted by Wall Street's top pros on TipRanks, a platform that ranks analysts based on their past performance.
This week's first dividend stock is telecom giant AT&T (T). The company recently reported first-quarter results, driven by strong postpaid phone and fiber net subscriber additions. The company retained its full-year guidance and stated that it plans to commence share buybacks in the second quarter, given that its net leverage target of net debt-to-adjusted earnings before interest, taxes, depreciation and amortization is in the 2.5-times range.
AT&T offers investors a quarterly dividend of $0.2775 per share. With an annualized dividend of $1.11 per share, AT&T stock offers a dividend yield of 4.0%.
In reaction to the company's Q1 print, RBC Capital analyst Jonathan Atkin raised his price target for AT&T stock to $30 from $28 and reiterated a buy rating. The analyst noted that the company exceeded estimates even after excluding $100 million of one-time EBITDA benefits.
Atkin added that AT&T's revenue surpassed expectations, thanks to the strength in both wireless and wireline businesses. Among other positives, the analyst noted that the company promptly addressed the slowdown seen in January and delivered robust postpaid phone net additions of 324,000, with gross additions growing 13% and helping to overcome higher churn.
"Management signaled confidence in its execution amidst a challenging environment by reiterating guidance and introducing a buyback program that commences in Q2," said Atkin.
Atkin ranks No. 85 among more than 9,400 analysts tracked by TipRanks. His ratings have been successful 69% of the time, delivering an average return of 11.3%. See AT&T Hedge Fund Trading Activity on TipRanks.
We move to Philip Morris International (PM), a consumer goods company that is focused on transitioning completely to smoke-free alternatives from cigarettes. The company reported solid results for the first quarter of 2025, driven by strong demand for its smoke-free products.
Philip Morris rewarded shareholders with a quarterly dividend of $1.35 per share. At an annualized dividend of $5.40 per share, PM stock offers a yield of nearly 3.2%.
Encouraged by the results, Stifel analyst Matthew Smith reaffirmed a buy rating on PM stock and increased the price target to $186 from $168, noting strong momentum across the board. The analyst said that three growth engines – smoke-free product mix, pricing and volume growth – boosted Philip Morris' Q1 performance and drove a 10% rise in organic revenue, 340 basis points of gross margin expansion and 200 basis points of increase in operating profit margin.
"Each of these engines support durable growth in 2025 and beyond as smoke-free continues to increase as a portion of PMI's portfolio, now over 40% of revenue and gross profit," said Smith.
The analyst expects 170 basis points of operating profit margin expansion in 2025, driven by smoke-free products, including Iqos and Zyn. In particular, Smith noted that Zyn's Q1 U.S. volumes benefited from robust demand and earlier-than-anticipated improvement in supply chain capacity. He now expects 824 million cans for 2025, reflecting a 42% growth. Also, Zyn's capacity is expected to reach 900 million cans this year, supporting potential upside to his estimates, especially in the second half of the year when inventories are expected to normalize.
Smith ranks No. 642 among more than 9,400 analysts tracked by TipRanks. His ratings have been successful 64% of the time, delivering an average return of 15%. See Philip Morris Ownership Structure on TipRanks.
This week's third dividend stock is Texas Instruments (TXN), a semiconductor company that designs and manufactures analog and embedded processing chips for several end markets. The company's first-quarter earnings and revenue easily surpassed Wall Street's estimates, reflecting strong demand for its analog chips despite the threat of tariffs. Also, TXN's guidance for the June quarter was better than the consensus estimate.
Meanwhile, Texas Instruments pays a quarterly dividend of $1.36 per share. At an annualized dividend of $5.44 per share, TXN stock's dividend yield stands at 3.3%.
Reacting to the strong Q1 results, Evercore analyst Mark Lipacis reiterated a buy rating on TXN stock with a price target of $248, saying, "We're buyers of TXN post a beat and raise 1Q25 print." He stated that TXN remains a top analog pick for Evercore.
Lipacis contended that while bears will argue that the upside to Texas Instruments' Q1 results and Q2 2025 outlook were due to tariff-driven order pull-ins, his analysis shows that the company's inventories have overcorrected in the supply chain. In fact, numerous checks by his firm indicate that many entities in the supply chain have now taken their inventories well below normal levels.
The analyst expects TXN to be early into the upward revision cycle, given that it was the first large-cap analog company to enter the inventory correction phase. He expects the company to deliver upside surprises through 2025 and into 2026. Additionally, he expects TXN stock to sustain a premium price-earnings multiple as it is exiting its capital expenditure cycle, which will drive its free cash flow per share higher from a trailing 12 months' trough of $1 to $10.30 by 2027.
Lipacis ranks No. 69 among more than 9,400 analysts tracked by TipRanks. His ratings have been profitable 58% of the time, delivering an average return of 20.4%. See Texas Instruments Technical Analysis on TipRanks.