The current economic landscape presents a blend of tension and opportunity. As trade negotiations falter and geopolitical tensions escalate, investors are rightfully concerned about market volatility. However, for those seeking stability amidst chaos, dividend stocks provide a potential refuge. By enamoredly following the insights from top analysts, investors can enhance their portfolios by identifying undervalued dividend-paying stocks. Here are three dividend-focused companies recommended by leading Wall Street experts, along with compelling reasons to consider them.
Verizon Communications: A Resilient Telecom Player
Verizon Communications (VZ) stands out as a crucial player in the telecom sector, with a recently announced dividend of $0.6775 per share that equates to a healthy yield of 6.3%. This robust payout reflects the company’s confidence in its operational strategies and long-term goals. Following an engaging dialogue with Verizon’s management, Citi analyst Michael Rollins expressed optimism about the company’s ability to strengthen its foothold in both broadband and converged services.
This determination is noteworthy as Verizon aims to boost the share of converged subscribers from a current 16% to 17% over the next three years. While competition in the wireless space remains fierce and unpredictable, Rollins highlights that Verizon’s focus on customer retention and lowering churn rates could play an essential role in its recovery. Recent promotional initiatives and an innovative upgrade program are designed to attract and sustain a loyal customer base. Although the anticipated loss of 75,000 postpaid phone customers in Q2 is concerning, there is a silver lining. Analysts expect the third quarter to emerge as a pivotal moment for Verizon, showcasing hints of recovery that, if realized, could significantly elevate stock value. With a price target of $48, Rollins believes Verizon’s financial prospects are not only promising but underappreciated.
Restaurant Brands International: A Fast-Food Giant on the Rise
Diving into the fast-food industry, Restaurant Brands International (QSR)—the parent company of Burger King and Tim Hortons—also deserves attention. Offering a quarterly dividend of 62 cents, Touted as a yield of around 3.7%, QSR’s dividends are underpinned by a solid long-term growth algorithm projected at 8% annual adjusted operating income growth between 2024 and 2028.
Despite facing a challenging sales landscape, driven by underwhelming growth forecasts of 5% and 6% in 2025 and 2026, analyst David Palmer from Evercore remains bullish. His analysis suggests the company’s effective cost management strategies could allow it to meet profitability targets without the expected jump in sales. Moreover, with QSR trading at a discount compared to peer giants like Yum Brands and McDonald’s, Palmer sees potential upside for the stock. Other catalysts, such as promising international same-store sales and the anticipated resale of the China business, could further elevate QSR’s earnings in the coming years. With an ambitious price target of $86, analysts firmly believe the stock is undervalued relative to its peers.
EOG Resources: An Energy Powerhouse
In a climate where energy demands fluctuate, EOG Resources (EOG) emerges as a notable player, especially with a recent announcement to acquire Encino Acquisition Partners for $5.6 billion. This strategic move not only enhances EOG’s oil reserves but also demonstrates its commitment to returning value to shareholders. EOG recently announced a 5% dividend increase to $1.02 per share, translating into a dividend yield of 3.1%.
The acquisition aligns with RBC Capital’s analyst Scott Hanold’s perspective, viewing Encino’s assets as a value-adding addition to EOG’s portfolio. With a price target set at $145, Hanold underscores the significant synergistic potential of this acquisition, which could boost EOG’s output significantly. The analyst also points out that EOG’s disciplined approach to managing debt, maintaining a strong leverage ratio, and prioritizing share buybacks highlights its commitment to robust shareholder returns. Furthermore, the expectation of scaling operations by 2026 is a bullish signal that should appeal to dividend-focused investors.
In a world marred by uncertainty, these three dividend stocks represent strategic opportunities that not only offer reliable income streams but are also backed by solid analyst support. While market conditions may fluctuate, investing in companies with strong fundamentals and solid growth strategies can create a more resilient portfolio.